On July 5, 2018, the Midcontinent Independent System Operator, Inc. (“MISO”) proposed to restore provisions in its Open Access Transmission, Energy and Operating Reserve Markets Tariff (“Tariff”) to allow Transmission Owners the discretion to elect to provide initial funding for network upgrades. MISO filed its proposed Tariff changes after the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) vacated earlier FERC orders that required MISO interconnection customers’ consent before allowing Transmission Owner funding of interconnection-related network upgrades.
In a series of orders dating back to 2015, FERC concluded that providing MISO Transmission Owners with the ability to elect to fund network upgrades “may be unjust, unreasonable, unduly discriminatory or preferential because it . . . may result in discriminatory treatment by the Transmission Owner of different interconnection customers.” Ultimately, FERC ordered MISO to modify its pro forma Generator Interconnection Agreement to require generator consent of interconnection customers before the Transmission Owner funding option could be employed. Several MISO Transmission Owners appealed FERC’s decisions to the D.C. Circuit. On January 26, 2018, the D.C. Circuit vacated all of FERC’s previous orders. Specifically, the D.C. Circuit found that FERC “failed to justify its requirement to eliminate the Transmission Owners’ unilateral option to fund interconnection upgrades” in the Facilities Construction Agreement (“FCA”) and the Multi-Party Facilities Construction Agreement (“MPFCA”) (see February 7, 2018 edition of the WER).
In response to the D.C. Circuit’s opinion, MISO submitted the two instant filings to amend the language in its FCA and MPFCA to be consistent with the language that existed before FERC’s 2015 orders. MISO’s filings propose to remove language that eliminated the right of Transmission Owners to elect to self-fund interconnection upgrades. In addition, MISO urges FERC to act on its filing as soon as possible. MISO states that its “[q]ueue demand is extraordinarily high” and that “over $100 million in upgrades could be entered into just within the last six months of 2018.” MISO asserts that there would be considerable deleterious effects, should FERC not act on an expedited basis. Specifically, MISO argues that “[w]ith the unprecedented volume currently in the queue, MISO faces a real risk that numerous agreements will be entered into knowing that future amendments will be required, with resulting significant time and cost implications,” which could be prevented if FERC acted swiftly and accepted MISO’s filings.