FERC has refused MISO’s proposed special pathway in its interconnection queue for generation projects labeled necessary by state regulators.  

The commission said MISO’s proposal lacked direction to advance resource adequacy, and the fast lane ran the risk of becoming inundated with an unlimited number of generating facilities (ER25-1674). FERC said it rejected the proposal without prejudice, leaving MISO free to file for another express lane design in its queue.  

MISO filed in mid-March for the temporary measure to usher generation projects crucial to an adequate supply through its interconnection queue faster. MISO’s intention for a 90-day processing for “shovel-ready” projects with a stamp of approval from state regulators would have been far removed from the upward of three years that most interconnection customers must wait in the regular queue. 

New capacity seeking expedited treatment would have had to come equipped with a permission slip from its relevant regulator; a $100,000, nonrefundable deposit; a refundable milestone payment of $24,000/MW; a designated commercial operation no more than three years from its interconnection request; and proof of land rights.  

Opponents of the plan said it effectively would have allowed vertically integrated utilities’ gas plants to cut the interconnection line while hindering independent power producers’ proposals. They also raised concerns over how the proposal would include Illinois and Michigan’s retail choice areas. (See MISO Fast Lane Proposal Disadvantages IPPs, Retail Choice States, Critics Tell FERC.) 

Eight former FERC commissioners even warned sitting commissioners via a joint letter that greenlighting the plan would threaten FERC’s open access transmission tenet and would have provided an opportunity for self-dealing among utilities to advance their affiliated generation. 

The commission in its May 16 order said MISO’s decision not to place any limit on the number of projects or specify a megawatt maximum could culminate in an oversaturated process with lengthy processing times, eventually resembling MISO’s existing, beleaguered queue. The commission said MISO would be hard-pressed to meet resource adequacy and reliability targets with a bogged-down fast track. 

FERC said MISO itself acknowledged the “shortcoming” of unlimited projects by stating it “could not guarantee the timeline … if multiple requests are submitted in the same quarter in the same area of the grid due to the serial nature” of the specialized studies. 

The commission said MISO’s plans to open up to 14 quarterly submission windows across the handful of years the fast lane would be in operation opened the door for a “volume” of interconnection requests “untethered to reliability or resource adequacy needs.” It said it questioned whether MISO’s proposal could get critical resources interconnected on an expedited schedule and whether the design was “narrowly tailored to fix the problem.”  

Beyond that, FERC said MISO didn’t establish how the process would assemble and study only key interconnection requests for projects that would aid reliability.  

FERC said similar proposals like PJM’s Reliability Resource Initiative and CAISO’s Interconnection Process Enhancements were more custom-built to address resource adequacy in their regions. PJM proposed to study no more than 50 projects on a one-time basis with stipulations on location and deliverability, the commission said, while CAISO laid out system needs criteria to determine which projects advance to study zones that are capped.  

FERC said MISO failed to strike a similar balance that would have projects that improve resource adequacy and reliability processed in a timely manner.  

“MISO has not demonstrated that the proposed tariff language is tailored to ensure that only those resources capable of addressing identified near-term resource adequacy or reliability needs are eligible for expedited study,” FERC said.  

The commission said while it’s appropriate for regulatory authorities to size up their resource adequacy needs and throw support behind certain projects, MISO must ensure that its fast track respects FERC’s “open access principles in an objective and transparent manner in order to meet the [Federal Power Act’s] requirements that rates be just and reasonable and not unduly discriminatory or preferential.”  

“MISO has not done so with this proposal,” FERC wrote.  

Christie Willing to Trade Vagueness for Desperately Needed Megawatts

However, FERC Chair Mark Christie said he was ready to give MISO the benefit of the doubt in exchange for an uptick in resource adequacy.  

Christie said though he “fully” understood other commissioners’ qualms with a lack of detail and personalization in MISO’s proposal, he was willing to “extend to both the states and MISO a trust that they would implement the … proposal in a manner that would promote the construction of badly needed generation capacity that serves resource adequacy and reliability.”  

“One thing we know with no need for further proof: This country, including MISO, is heading for a reliability crisis caused by early retirements of dispatchable resources coupled with the failure to construct sufficient equivalent capacity, all while demand rises at an unprecedented pace largely driven by data center growth,” Christie warned in a dissent.  

Throughout the order, FERC invoked NERC’s 2024 Long-Term Reliability Assessment, which shows MISO could confront a 4.7-GW capacity shortfall by 2028 if resource generations go off as planned.  

Christie furthermore said he didn’t think FERC should “block the states” from designating priority generation plans to ensure resource adequacy within their borders. He noted that states “are sovereign entities with the inherent police power under our constitutional structure to regulate the utilities in their state.”  

Two commissioners, however, wrote separately to say that MISO’s omissions were too glaring to ignore.  

Commissioner David Rosner said while rejection wasn’t an “easy decision,” MISO’s expedited lane as described “risks replicating the same backlogs and delays plaguing MISO’s existing generation interconnection queue, which are what put MISO in its current situation in the first place.” He also said that MISO’s insufficient limits on study requests risked a court finding that the fast lane is unjust and discriminatory and striking it down, “leaving MISO worse off than taking no action.” 

“While MISO clearly intends to design a process that considers only ‘tens’ of interconnection requests per year, there is no guarantee that interest” will be limited, Rosner said.  

Rosner said he believed FERC’s order of rejection provided MISO enough direction to draft a second attempt.  

Commissioner Lindsay See likewise encouraged MISO to bring FERC a more workshopped proposal.  

See said she couldn’t overlook that MISO’s plan left out retail choice states Illinois and Michigan and would bestow undue preference on resources connecting in vertically integrated states.  

“Because the commission should remain evenhanded when it comes to our state partners, a proposal that discriminates among the states themselves gives me serious pause,” See said.  

See also said MISO should require the states to explain how they decided certain projects are essential for reliability or resource adequacy. See said although MISO promised its fast lane would be “‘open, competitive [and] technology/fuel agnostic and … not involve MISO favoring or selecting certain projects over others,’ nothing in the tariff explains how it will live up to those goals.”  

“Simply put, the commission cannot evaluate criteria that do not yet exist, that will vary state-by-state when they do and that MISO does not plan to police,” she wrote.  

MISO Prepped for Positive Outcome

Meanwhile, MISO had begun preparations to start project acceptance.  

MISO posted an informational guide on the fast track in anticipation of a favorable FERC order. Through an email to stakeholders, MISO said if the proposal was not accepted by the commission, it would remove the guide from its website.  

MISO planned to open an application window for the first quarterly fast-track study treatment through May 22. It planned to accept submissions for the first expedited cycle through an email dedicated to interconnection issues, and launch a submission portal this summer for upcoming cycles.  

MISO planned to process quarterly study classes until the end of 2028. The next application deadline would have come due in mid-August.  

During an Organization of MISO States’ Resource Adequacy Summit May 13, MISO CEO John Bear said the RTO didn’t yet have projects lined up for the fast lane and said he couldn’t offer an overview of the resource mix that would have become the first entrants in the express lane.  

“Fixing the queue is not a challenge. Clearing the queue is a challenge. You’ve got a 130-GW system with 350 GW in the queue. … You can’t even model that,” Bear said of the regular queue lineup. He predicted it would take MISO about three years to get a handle on its stockpile of proposals.  

In response to an audience question on whether some of the queue volume would drop off naturally, Bear said he didn’t want to guess how many generation projects might not be realized. He said developers have put a lot of money and planning behind their projects, and MISO’s newly higher fees, stricter land use requirements and stepped-up withdrawal penalties mean projects have been subjected to more scrutiny than in the past.  

Win for Clean Energy Groups

Clean energy organizations are likely to rejoice at the ruling.  

In a statement, Earthjustice said the proposal would “sideline generation projects that have been waiting years to connect and send everyday consumers the bill for fast-tracking projects hand-picked by special interests.” The group said the expedited process would discriminate illegally against competitive clean generation developers. It also said MISO risked backsliding into “inefficient, serial interconnection studies.” 

“FERC rightly rejected the proposal from MISO to fast-track connection of utility-owned methane gas projects over the queue of clean energy projects that have been waiting years to connect to the grid. FERC’s role as an independent agency is to protect consumers and ensure reliable affordable energy. The best way to do that is [to] let clean energy compete fairly and openly,” Earthjustice attorney Christine Powell said in a statement following the decision.  

Clean Grid Alliance similarly criticized the proposal in a blog post prior to FERC’s ruling: “The trouble with [the Expedited Resource Addition Study (ERAS)] is, in short, ERAS as currently proposed doesn’t play by the rules. At least not the rules everyone else must play by. There doesn’t seem to be any other reason to allow this process than to create a pathway for adding new natural gas and enable ‘queue jumping,’ which allows certain projects to bypass the current interconnection queue process and skip ahead of projects that have been waiting in the queue for years.”  

States outside of Michigan and Illinois, however, had urged FERC to approve the expedited queue lane. 

In similar, recent letters to FERC, Mississippi Gov. Tate Reeves (R) and Arkansas Gov. Sarah Huckabee Sanders (R) called the proposal “essential” and cited the risks posed by rising load.