By Amanda Durish Cook
FERC last week affirmed that a small Michigan transmission project in MISO’s 2018 Transmission Expansion Plan (MTEP 18) is in fact a local distribution facility that should not be included in the annual portfolio.
The ruling leaves no doubt that Michigan Electric Transmission Co.’s (METC) $21 million, 138-kV Morenci line near the Michigan-Ohio border will be removed from MTEP 18 (EL19-59).
FERC in the same order also declined to launch an investigation into MISO’s Tariff to find out whether the RTO should take an active role in determining whether particular projects function more as transmission or distribution.
Consumers Energy in April 2019 filed a complaint against MISO and METC, claiming the Morenci project was “improperly” included in MTEP 18 because it failed FERC’s seven-factor transmission test. The utility asked FERC to forbid MISO from approving the construction of a distribution facility. (See Michigan Regulators Intercede in MTEP Complaint.)
The Morenci project was intended to address anticipated load growth; METC submitted an expedited project review request to MISO for the project in 2018.
The Michigan Public Service Commission in November determined the line had more in common with distribution than transmission, dropping it from MTEP eligibility. FERC waited until Michigan regulators had concluded their investigation before it ruled on the matter.
The federal commission dismissed METC’s argument that the line will be used to transport wholesale power, noting that although technically true, it wouldn’t be the primary purpose of the line.
“The Michigan commission found that although wholesale transactions occur over the Morenci project, that does not mean that its function is a transmission facility; rather, the function of the Morenci project is to deliver power leaving Michigan Electric’s looped transmission system to Midwest Energy’s distribution system for exclusive consumption by Midwest Energy’s retail end users,” FERC said.
Consumers also alleged that MISO should have performed a seven-factor test on the Morenci project before it included it in MTEP 18. The utility asked FERC to open an investigation into MISO’s Tariff and determine whether the RTO should develop additional procedures to test transmission projects before they’re included in an MTEP cycle.
The Michigan PSC also asked the commission to “determine if, and when, in the transmission/distribution classification process it would be appropriate for a utility or MISO to request a state commission determination of whether or not a project is transmission and, thus, eligible to be included in MTEP.”
MISO maintained that the process is already clear-cut, placing the classification responsibility on transmission owners who “have the best knowledge of their own systems and facilities.”
“It is MISO’s role to evaluate transmission projects developed through its planning and stakeholder processes; it is not MISO’s role to initiate hundreds of classification proceedings with state regulators or this commission,” the RTO wrote in December.
FERC agreed with MISO’s view and said the RTO made the right move when it largely kept itself out of the dispute and suggested the “parties request classification by an appropriate regulatory authority” once it saw the impasse.
The commission said it wouldn’t entertain Consumers’ request to investigate MISO’s Tariff and recommend the RTO adopt additional procedures to test projects.
“We agree with MISO that the classification of assets of a regulated entity is a regulatory function that should be performed by the commission and state commissions and that requiring MISO to perform a seven-factor test for projects proposed during the MTEP process would be overly burdensome without providing significant benefit,” FERC said.
“MISO only has authority to classify facilities for transmission owners that are not subject to regulation by a regulatory authority,” it reminded Consumers.
