Michigan regulators will assess a 2019 MISO transmission project to determine whether it is transmission or distribution in nature and if it should remain in the grid operator’s 2019 Transmission Expansion Plan (MTEP-19).

The Michigan Public Service Commission said last week it will apply a seven-factor test to determine whether the $8.6 million, 120-kV interconnection project in eastern Michigan is a transmission project and should maintain its MTEP 19 eligibility (EL21-41).

DTE Energy representatives in late 2019 objected to the project’s inclusion in MTEP 19, saying the line was radial in nature and resembled a distribution, not transmission, project. DTE asked for a hold on the project’s approval until regulators could evaluate it. (See “Disagreement on Michigan Interconnection Project,” MISO Board OKs $4 Billion MTEP 19.)

The city of Croswell wants to use the line to relocate its load from DTE’s 41.6-kV distribution system to International Transmission Co.’s (ITC) system.

MISO has said that if regulators classify the line as distribution, it will remove it from the MTEP 19 lineup. The RTO’s previous analysis classifies the project as a transmission line.

DTE must file a petition with the PSC to initiate the decision making.

DTE argued that the line is unlikely to become networked in the future. The utility said it was approached by Croswell in 2017 about improving its system reliability. DTE proposed to build a dedicated 41.6-kV distribution line and bill the city. According to DTE, Croswell rejected the proposal and pursued the interconnection project, which would shift costs to DTE customers.

ITC responded that its transmission pricing zone contains other projects similar to the Croswell interconnection, pointing to a pair of radially fed 120/13.2-kV substations approved in MTEP 17 and MTEP 19. It said because similar facilities have been categorized as transmission projects, the Croswell interconnection should get comparable treatment.

DTE Energy’s territory is located within the ITC pricing zone.

FERC said it has deferred to the Michigan PSC’s expertise in the past when “Michigan utilities have requested commission approval of facility classifications for the purpose of determining eligibility for cost recovery in transmission rates in joint pricing zones.”

The situation is reminiscent of MTEP 18’s Morenci project, which Consumers Energy disputed. The PSC reviewed the $21-million, 138-kV line near the Michigan-Ohio border and classified it as a distribution project, making it ineligible for the MTEP. (See Michigan Regulators Intercede in MTEP Complaint.)