On June 11, 2019, FERC accepted Republic Transmission LLC’s (“Republic”) proposed transmission formula rate (“Formula Rate”) that will be incorporated into Midcontinent Independent Transmission System Operator, Inc.’s (“MISO”) tariff when Republic becomes a transmission owner in MISO. Additionally, FERC granted Republic’s request for authorization to allow future affiliates or subsidiaries of Republic that undertake transmission projects in the MISO region to apply the Formula Rate, as well as the transmission rate incentives previously granted to Republic (“Incentives”).
In January 2016, as a part of its Order No. 1000-compliant competitive transmission development process, MISO initiated a solicitation to alleviate congested flowgates on its system. MISO accepted Republic’s bid, which included rate commitments, such as rate base, return on equity (“ROE”), and capital structure caps. On October 6, 2017, FERC approved Republic’s request for certain transmission rate incentives, such as a regulatory asset for pre-commercial costs, abandoned plant recovery, a hypothetical capital structure, and a regional transmission operator participation ROE adder.
In its order, FERC accepted Republic’s proposed Formula Rate, finding that it was consistent with other FERC-approved formula rates and that it incorporates the rate commitments agreed to by Republic in the competitive solicitation process. FERC also granted Republic’s request to allow future affiliates of Republic to use Republic’s Formula Rate and Incentives. FERC found that granting the Incentives for future use by Republic’s affiliates would facilitate the formation of additional entities that could then participate as nonincumbent transmission developers, consistent with Order No. 1000’s goal of removing barriers to transmission development. FERC stated that if MISO awards a project to an affiliate of Republic, the affiliate will be expected to make a joint section 205 filing with MISO to incorporate its new formula rate into the MISO tariff.
A copy of the order is available here.