By Amanda Durish Cook

Pioneer Transmission can recover about $10 million in precommercial operation costs used to develop a high-voltage transmission line in Indiana, FERC decided last week.

The joint venture of Duke Energy and American Electric Power incurred the costs March 2009 through Dec. 31, 2019, while planning and constructing the $347 million, 765-kV Greentown-to-Reynolds transmission line between Kokomo and Reynolds, Ind. FERC approved Pioneer’s October filing to include the asset in its formula rate on Dec. 31 (ER20-159).

However, the commission also told the transmission company it must update its capital structure from the hypothetical 50% debt and 50% equity to the 2018 year-end actual of approximately 51.1% debt and 48.9% equity.

The 70-mile Greentown-to-Reynolds project is the first segment of the $1 billion, 290-mile Greentown-to-Rockport line that has been in the works for more than a decade. The completed line is expected to traverse MISO into PJM. Pioneer began construction on the segment in 2013 and finished work in June 2018; the segment is one of the 17 multi-value projects MISO approved in 2011.

In a related order issued the same day, FERC also denied Pioneer’s request to rehear its first request to amortize and recover the precommercial operation costs of the Greentown-to-Reynolds line (ER18-2119).

Pioneer first filed to recover precommercial operation costs in July 2018, but the commission rejected the filing without prejudice a year later, finding that the company included a 150-basis-point return on equity adder for new transmission in its carrying charges. FERC had previously said in 2009 that Pioneer could not receive the adder unless the project was approved by both MISO and PJM. Pioneer has not yet obtained PJM approval for the project. (See FERC Lowers ROE for Segmented Pioneer Tx Project.)

Pioneer said FERC should revisit the decision because the commission did not act within the 60-day period prescribed by the Federal Power Act, thus making the filing legal on Sept. 30, 2018.

But FERC said Pioneer’s regulatory asset filing was not properly filed electronically and therefore was not subject to a statutory action date.

“If we were to vacate the commission’s rejection of Pioneer’s filing in this docket as Pioneer requests, it would be permitted to accrue an unauthorized 150-basis-point ROE adder to its regulatory asset carrying charge and thus profit through its own failure to comply with the commission’s filing regulations,” FERC explained, pointing out that Pioneer was able to submit its October filing correctly.