By Amanda Durish Cook

MISO plans to refile a revised version of a plan to speed up its current 500-day interconnection queue process after FERC rejected its first attempt.

The commission in March rebuffed MISO’s plan to impose more stringent site control requirements and increase the milestone payments for interconnection customers, saying the RTO didn’t adequately demonstrate the proposal was reasonable and not unduly discriminatory. (See FERC Rejects MISO Plan to Strengthen Queue Requirements.)

However, the commission noted it could be persuaded to accept the plan if MISO could better explain its “exclusive use” site control provision, defend its proposed higher milestone fees and justify the milestone portions that would be placed at risk of forfeiture.

MISO will address those issues according to FERC guidance and refile the proposal by July, Resource Interconnection Planning Manager Neil Shah told the Interconnection Process Working Group (IPWG) on Tuesday.

Shah said MISO also has the benefit of “six to eight months” of stakeholder discussion and multiple rounds of feedback on the proposal to guide adjustments.

The site control and milestone payment changes are set to take effect for projects entering the definitive planning phase (DPP) of the queue this year.

MISO will revert to its status quo process regarding the first milestone payment, which will remain $4,000/MW instead of becoming a variable cost representing 10% of the average network upgrade cost from the last three DPP cycles.

FERC had said MISO’s proposal 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.”

Shah said MISO still needs to work out how interconnection customers would demonstrate exclusive use of site control. Some stakeholders said they hope the revised proposal will reduce overlap on claimed sites for prospective projects.

FERC had said MISO’s proposed language that project owners demonstrate exclusive use 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. The commission also said MISO’s filing was “unclear” about how interconnection customers would be able to meet an exclusive-use standard.

Since then, FERC has given MISO permission to allow generating facilities using more than one fuel source — hybrid resources — to submit a single request to join the interconnection queue. (See “MISO to Process Hybrid Interconnections Under 1 Form,” MISO Planning Week Briefs: Feb. 12-13, 2019.) The Tariff previously prohibited customers from designating two fuel types on an interconnection request.

Shah also said MISO staff will create a “true-down” mechanism for its milestone payments, which FERC suggested in its rejection order.

“Because MISO’s milestone payments have become significantly larger than the initial payment, in any future filing, MISO should consider a true-down mechanism in order to bring milestone payments back in line with the initial intent behind MISO’s milestone payment structure — i.e., for those payments to provide approximately 20% of an interconnection customer’s network upgrade costs. Furthermore, this type of mechanism could serve to balance MISO’s proposal to make portions of the M2 and M3 milestone payments at-risk,” FERC said.

The RTO also faces more work to explain its “at-risk” policy on interconnection customers’ milestone fees. A percentage of milestone fees become at risk of forfeiture as customers decide to move to the next phase of the three-phase DPP. FERC said that because MISO recently removed the requirement for an affected-system analysis in the first phase of the DPP, 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 the amount of risk was not properly balanced by proposed improvements to the queue process.

Finally, MISO said it will now refund milestone fees after interconnection customers make their first payment under a generator interconnection agreement. The RTO had first proposed not to refund milestone payments until a project achieves commercial operation, but FERC said the milestone refund date should both prevent queue gaming and not tie up an interconnection customer’s capital for too long.

MISO currently issues milestone refunds 45 days after a GIA becomes effective, but it contends that deadline opens up the process to gaming because an interconnection customer could withdraw its project immediately after executing a GIA, “when its milestone payments have been transferred to the transmission owner but before the transmission owner has spent anything on construction costs, which would give the interconnection customer essentially a full refund of its milestone payments.”

Shah said RTO staff sought to arrive at a refund date that wasn’t too burdensome for interconnection customers while discouraging gaming and mitigating the impact of withdrawing projects on other projects.

Shah said he would return to the IPWG in July for stakeholder review of the modified proposal with a goal to refile within the same month.

Other Interconnection Filings

While FERC rejected the site control and milestone changes, on Wednesday it accepted a different MISO queue proposal to allow the transfer of interconnection rights for existing generators that have been retired, demolished or replaced with new generation (ER19-1065).

U.S. Rep. Kelly Armstrong (R-N.D.) and Sen. Tina Smith (D-Minn.) each wrote in support of the proposal, saying it would allow owners of aging generation to make cleaner upgrades without risking their interconnection rights. (See Senator Backs MISO Generator Replacement Proposal.)

MISO also filed a partial compliance with FERC Order 845 on May 10 to address a directive that RTOs establish an expedited queue process allowing interconnection customers to use or transfer surplus interconnection service at existing facilities (ER19-1823). MISO’s filing proposes to rename its existing net zero interconnection option to “surplus interconnection service” and include interconnection and steady state analyses, while removing an existing competitive solicitation process for surplus interconnection service and clarifying that the original interconnection customer or affiliates have priority rights to any surplus service. (See Little Work Needed to Comply with Order 845, MISO Says.) MISO said it will make another compliance filing for the remainder of Order 845 directives by May 22.

On a related note, MISO also plans to make a FERC filing in either June or July to create a shared-use agreement for projects sharing a single interconnection facility. MISO is requiring that any consent agreement include project configurations, facilities ownership terms and an explicit division of rights and responsibilities, including operation, maintenance and repairs.