MISO says it needs more time to finish meting out refunds to transmission customers nearly a dozen years after a complaint was first raised to lower its transmission owners’ base return on equity (EL14-12, et al.).
The RTO and TOs requested an extension until June 30, 2026, of the current Dec. 1 deadline to complete refunds under a FERC-ordered ROE in transmission rates.
In an October 2024 order, FERC set MISO’s base ROE at 9.98%, down from the previous 10.02%. That figure is the latest in a complicated carousel of ROE percentages the commission has set in the last decade.
MISO transmission customers first complained in late 2013 that the 12.38% ROE in use since 2002 was excessive. A second complaint challenging the ROE followed in 2015; that complaint was dismissed as FERC set and reset ROEs from 2016 onward (10.32% beginning in 2016, 9.88% in 2019 and 10.02% in 2020).
In the 2024 ROE order, FERC upheld an original 15-month refund period from Nov. 12, 2013, to Feb. 11, 2015, while prolonging a second refund period from Sept. 28, 2016, through Oct. 17, 2024. The TOs are challenging the eight-year refund period. (See MISO TOs Take ROE Battle to DC Circuit Court Again.)
MISO said more time is necessary to complete the complicated resettlements and accurately disperse refunds with interest for the eight-year period.
The grid operator said, “The number of affected transmission owners, the number of months involved and the number of affected schedules have all increased.” The affected TOs are up to 89, from 75, while the months needing resettlement are up to 181, from 110, it said.
“The tasks have been organized as efficiently as possible but involve ‘thousands of files and communications,’” the RTO told FERC, quoting an attached affidavit from its manager of transmission settlements, Erin Peddicord. “Coordination must take place between MISO and its many TOs, ‘with the exchange of hundreds of files between MISO and its transmission owners for every resettlement year [from] 2013 through Oct. 17, 2024.’”
Peddicord said that although the RTO has been making progress, the base ROE is “fundamental to MISO’s transmission billing.” She said FERC’s changes impacted several revenue schedules and tariff attachments, which are used in part to develop zonal transmission rates, MISO’s systemwide rates and compensation for the 2011 batch of Multi-Value Projects.
She added that transmission formula rates are not standardized in MISO, and TOs have different refund obligation dates, resulting in partial month settlements in some cases. She said the refunds are set to affect all TOs, whether they use historical, forward-looking or hybrid test years to calculate their annual transmission revenue requirements.
