By Tom Kleckner
FERC last week denied a rehearing request but clarified an underlying order addressing MISO’s multi-value transmission projects (MVPs) (ER10-1791).
PJM, American Municipal Power and PJM transmission owners appealed the 2016 ruling, which came in response to the 7th U.S. Circuit Court of Appeals’ 2013 remand of a previous FERC order. The commission’s ensuing order determined that a limitation on MISO’s export pricing to PJM for MVPs was no longer justified, clearing the way for MISO to recover costs for those projects benefiting PJM customers by charging a fee on exports to PJM. (See MISO to Begin Charging Tx Fees on PJM Exports.)
In the order on remand, FERC said that given the growth of wind energy, as well as the need for PJM entities to access the resources and for MISO to deliver those resources to PJM, it was “appropriate to allow MISO to assess the MVP usage charge for transmission service used to export to PJM.”
MISO created the MVP category in 2010 for projects that address more than one reliability or economic need across multiple transmission zones. It originally intended to allocate project costs to all of its load and exports, but FERC excluded the export charge because of concerns over rate pancaking.
The commission rejected claims that it used the same evidence to justify the MVP charges’ application in the order on remand as it did to previously reject them. FERC said it reconsidered its previous determinations on this issue, including, but not limited to, findings made in previous decisions on the rate pancaking issue.
The commission said it centered its original decision on FERC Order 2000’s factors for determining appropriate RTO configuration, but it did not consider how the market-to-market (M2M) process affects those issues. In the order on remand, FERC found that the M2M process allows the RTOs to more efficiently address the inefficiencies and other issues arising along their seam, and noted that the grid operators added many “general improvements to coordination” between them since 2016.
FERC rejected PJM’s request to clarify that MISO must use the RTOs’ joint operating agreement process to review any MVP whose costs would be assessed on exports to PJM through the MVP usage rate, saying it was “based on a false premise.” The MVP usage rate is assessed only to customers voluntarily taking transmission service under the MISO Tariff and does not allocate the cost of every MVP to PJM.
The commission granted PJM’s clarification request regarding potential double recovery of the cost of certain MVPs, saying that when an MVP is selected in both RTOs’ regional transmission plans as an interregional transmission project, only the portion of an MVP’s cost allocated to MISO may be recovered in the MISO MVP usage rate.
