FERC on Thursday approved unexecuted facilities service agreements (FSAs) for three NextEra Energy wind projects that refused to complete the FSAs in protest of a 2018 order reinstating MISO transmission owners’ rights to self-fund network upgrades.
The decision marks a setback for NextEra’s Heartland Divide II in Iowa (ER21-720), Walleye Wind in Minnesota (ER21-721) and Emmons-Logan Wind in North Dakota (ER21-722). All three proceedings involved transmission owner ITC Midwest.
In each case, the wind subsidiaries refused to execute FSAs and requested that MISO file an unexecuted document because they say FERC could reverse its policy regarding TOs’ right to provide initial funding for the network upgrade that would accommodate the projects.
FSAs detail repayment of the cost of network upgrades and are signed by interconnection customers, MISO and the TOs that construct the system interconnections.
Heartland said it “expressly reserves the right to file with the commission to terminate the FSA if the commission reverts to its initial findings” so it can be made “financially whole.” It also said interconnection customers should be able to “retroactively annul and reverse” FSAs and TO initial funding decisions should FERC overturn its decision.
The company asked FERC to direct MISO to amend the FSA by including a provision for the possible reversal of TOs’ self-funding option.
Walleye Wind took the same approach two weeks ago with TO Northern States Power. (See MISO TOs’ Self-funding Option Tested Again).
As in the Walleye case, FERC refused to amend the FSA to include termination provisions should FERC reverse its position in the matter.
Chairman Richard Glick and Commissioner Allison Clements again questioned whether MISO’s current self-funding arrangement is fair.
“I continue to believe MISO’s interconnection rules may well merit additional scrutiny in the near future,” Clements wrote in all three orders. She repeated concerns that FERC’s ruling ignores that transmission owners can also be generation owners.
Glick said he agreed with the three orders because they “reflect the state of the law today,” but noted that giving transmission owners priority on financing and construction might be unjust and unreasonable.
“The commission failed to meaningfully wrestle with these concerns in its orders allowing transmission owners the unilateral right to choose up-front funding,” he said.
MISO in 2018 acted on FERC’s direction and reinstated TOs’ right to self-fund network upgrades necessary for new generation. The commission in 2015 barred TOs from electing to provide initial funding for network upgrades but walked back that position after the decision was remanded by the D.C. Circuit Court of Appeals. (See MISO Gauging Aftershocks of TO Self-fund Order.) The move was unpopular with some MISO generation developers, who said it could allow TOs to discriminate against some interconnection customers and increase the cost of new generation.
