By Amanda Durish Cook
In two orders issued late last week affecting MISO’s generator interconnection queue, FERC rejected a maintenance fee for interconnection customers while also approving a new process for interconnecting external merchant HVDC transmission.
The commission on Oct. 12 rejected without prejudice MISO’s plan to create a new mechanism to allow transmission owners to calculate and recoup expenses related to the operation and maintenance of transmission owner interconnection facilities (TOIFs) (ER18-1731-001). TOIFs are “sole use” facilities that includes all infrastructure owned by the TO from the point of the change of ownership (on the system) to the point where an interconnection facility connects to the transmission system.
MISO proposed the “Annual O&M and Overheads Charge” because, while its current generator interconnection agreement makes interconnection customers responsible for all TOIF expenses, the RTO’s Tariff currently provides no method for TOs to recover those costs. The proposed charge would have been calculated by TOs and invoiced annually to interconnection customers, treating revenues from the charge as a revenue credit and subtracting it from a TO’s net revenue requirement.
MISO and the TOs contended their proposal was consistent with FERC’s cost-causation principles because the recovery mechanism ensured interconnection customers would pay their proportional share of maintenance expenses for interconnection facilities, eliminating the possibility that other customers would subsidize the facilities.
But the commission took issue with MISO allowing TOs to calculate the charge using estimated construction costs of the interconnection facilities from the GIA when they cannot determine the facilities’ actual costs. FERC said it wasn’t just or reasonable to allow use of estimates without requiring TOs to support their figures with a Section 205 filing. FERC also said MISO and the TOs did not provide evidence that the estimates would be a “reasonable proxy” for actual construction costs.
The commission additionally pointed out that MISO doesn’t file GIAs — which include the cost estimates — when they conform to its pro forma GIA template. It also pointed out the TOs don’t typically file detailed cost support for their GIA estimates of interconnection facilities. Consequently, MISO and the TOs essentially asked FERC to “accept the use of estimated values for the purpose of deriving a charge for operation, maintenance and repair of the facilities during their service lives without an opportunity to review the reasonableness of such estimates as a proxy for actual … costs,” the commission said.
FERC added that any future proposal should contemplate a partial-year charge for GIAs that expire midyear.
Merchant HVDC Tx Queue Process Approval
But FERC did accept MISO’s proposal to allow external merchant HVDC transmission projects to connect to its grid, effective July 18 (ER18-1410). The interconnection process is largely based on MISO’s existing queue rules but includes a separate pro forma “MHVDC” connection request form, a pro forma transmission connection agreement and a process for obtaining injection rights, which the project owner converts into external network resource interconnection service (E-NRIS) for its upstream generating facilities. In response to an initial deficiency letter from FERC, MISO explained that it relied on interconnection rules previously approved by FERC and an exhaustive stakeholder process to settle on the new process. (See FERC: MISO Merchant HVDC Procedures Incomplete.)
FERC said MISO’s plan was reasonable: “Because the MHVDC connection customer will go through MISO’s full interconnection process alongside internal generation customers, no issues of undue discrimination or preferential treatment arise between the external generators that may use the E-NRIS converted from injection rights and internal or other external generators that obtain NRIS or E-NRIS, respectively, through MISO’s [generator interconnection process].”
