By Amanda Durish Cook

FERC on Tuesday rejected MISO’s proposal to impose more stringent site control requirements and increase the milestone payments for interconnection customers, while saying it could also be persuaded to accept the plan with certain revisions.

The commission found MISO didn’t adequately demonstrate its proposals were reasonable and not unduly discriminatory, even though it agreed more stringent site control requirements and higher milestones could help reduce speculative and duplicative projects. Still, the commissioners did offer guidance on how a reworked proposal might gain approval (ER19-637).

“We recognize that the filing represents a significant undertaking by MISO and its stakeholders to accomplish the important objective of preventing a large volume of speculative, non-ready projects from entering [phase one of the definitive planning phase] and subsequently withdrawing from the queue, creating adverse effects for other interconnection customers,” the commission said.

MISO had proposed interconnection customers follow one of two courses. They could either demonstrate 100% site control 90 days prior to the start of entering the definitive planning phase (DPP) of the interconnection queue or provide supporting documents and a $10,000/MW cash deposit (capped between $500,000 and $2 million) only if “regulatory limitations prohibit the procurement of site control.” (See MISO to File Queue Changes Before Year-end.) The DPP is the last three-part stage of studies, cost impacts and assessments that generation projects must scale before being granted interconnection.

MISO currently requires interconnection customers to either demonstrate 75% site control or provide a $100,000 cash deposit in lieu of demonstrating site control at the time of queue application. RTO staff have long characterized the requirements as too lax to deter non-ready projects, instead using the early DPP to “test multiple interconnection project concepts.”

MISO also proposed to change the first milestone payment from a $4,000/MW fee to 10% of the average network upgrade cost from the last three DPP cycles. MISO said the averages would be footprint-wide.

The RTO has said the proposal would speed up the queue by encouraging stalled projects to withdraw earlier in the process. The queue currently takes a little more than 500 days to complete, which MISO says is due to a “marked increase in the number and volume of interconnection requests … over the past two years.”

The Shortcomings

FERC said MISO’s proposed language that project owners demonstrate “exclusive use” site control conflicts with a Tariff section that allows interconnection customers to submit “multiple interconnection requests for a single site” and a policy that requires customers to submit separate requests for generating units that use multiple fuel sources. FERC pointed out the two-application policy applies to co-located generating facilities paired with a storage device.

“We find it unclear from MISO’s filing how interconnection customers would be able to meet MISO’s ‘exclusive use’ standard for such a generating facility. … It appears that these provisions are in conflict,” FERC said, suggesting MISO clear up how it interprets exclusive use site control for facilities that operate with multiple primary fuel sources.

FERC also said MISO didn’t describe what it expects from third-party analysis provided by an interconnection customer that wants to secure less land than MISO requires. The RTO’s acres-per-megawatt requirement differs based on fuel type, and it proposed that deviations from the land limits would have to be supported with a third-party analysis.

The commission also said MISO did not justify “the variable nature and calculation” of its proposed milestone payment on several fronts. It said the inconsistent payment average diminishes accounting certainty for interconnection customers, unfairly burdens projects in sub-regions where network upgrade costs are traditionally lower, ignores the fact that upgrade costs can vary widely across each study cycle and unfairly relies on using the costs of only preliminary network upgrades “that may not actually be built.”

Finally, the commission said MISO’s plan to shorten the window for withdrawing projects to get full refunds on the two subsequent milestone payments wasn’t appropriate when considering its proposed increase to the first milestone payment. FERC also said MISO didn’t consider that its recent removal of the first affected system analysis in the first phase of the DPP keeps interconnection customers in the dark a little longer on network upgrade costs. (See MISO Plan to Reduce Queue Studies Gets FERC Nod.)

“MISO’s proposal would require interconnection customers to post at-risk milestone payments without knowledge of potential affected system impacts that may alter their network upgrade cost estimates,” FERC said.

FERC added it might find a shortened refund window reasonable “under the appropriate circumstances.”

MISO’s queue proposal is linked with another, newer proposal to further accelerate the DPP by cutting the respective number of days throughout the three phases. (See “Measures to Accelerate Existing DPP” in MISO Details Fast-track Queue Options.) MISO staff this month had said they were relying on the increasing site control deposits and milestone fees to make for less complicated DPP modeling due to fewer late project dropouts, thus cutting the number of days other projects spend in the queue.