On March 10, 2020, FERC accepted and suspended Midcontinent Independent System Operator, Inc.’s (“MISO”) proposal to allow for the selection of a storage facility as a transmission-only asset (“SATOA”) in the MISO Transmission Expansion Plan (“MTEP”). FERC found that MISO failed to demonstrate that the proposal was just and reasonable and not unduly discriminatory, and directed staff to convene a technical conference to explore issues including:

  1. Evaluation and selection criteria for a SATOA in the MTEP;
  2. Permitted market activities for SATOAs and potential wholesale market impacts;
  3. How MISO’s current formula rate structure accommodates cost recovery for SATOAs;
  4. A SATOA’s potential impact on MISO’s generator interconnection queue; and
  5. Operating guidelines that will apply to a SATOA.

FERC declined to grant MISO’s requested March 11, 2020 effective date, instead setting an August 11, 2020 effective date, subject to further order following the technical conference, which as of this writing has not yet been scheduled.

Under MISO’s proposal, storage facilities will be evaluated against traditional wires projects for selection as a SATOA in the MTEP. MISO explained that like traditional wires projects, SATOAs selected in the MTEP will be operated for transmission purposes only and under MISO’s functional control. In addition, SATOA owners (not MISO) will be responsible for maintaining the necessary state of charge to ensure the resource can serve the transmission function for which it was selected, and will be permitted to participate in MISO’s markets only to the extent necessary to receive energy from and inject energy into the transmission system. This means that SATOAs would be excluded from participating in the energy and operating reserves markets or the planning resource auction under MISO’s proposal. MISO also proposed to permit SATOAs to recover costs through transmission rates, and proposed that any revenues associated with a SATOA’s market activities be credited back to customers through transmission rates. MISO argued that its proposal follows the principles that FERC previously articulated in its 2008 Nevada Hydro order (see related filings discussed in September 24, 2018 edition of the WER and October 24, 2019 edition of the WER), 2010 Western Grid order (see February 5, 2010 edition of the WER), and 2017 Storage Policy Statement (see January 24, 2017 edition of the WER).

MISO’s proposal received support from MISO Transmission Owners, but faced protests from other stakeholders, who argued, among other issues, that the proposal would favor storage projects proposed by incumbent transmission owners over those proposed by independent developers; that the criteria for selecting a SATOA as a transmission solution is ambiguous, and that MISO failed to propose a clear test to determine whether a proposed SATOA is equivalent in terms of function and cost to a comparable wires project. Protestors also argued that MISO’s proposal failed to address wholesale market impacts, and failed to provide sufficient information on the operating guidelines that will apply to a SATOA. In accepting and suspending MISO’s proposal, FERC made no comment on the substance of the protestors’ arguments but explained that parties would have the opportunity to file additional written comments following the technical conference.

FERC’s Order is available here and associated Errata Notice correcting the list of intervening parties here.