By Chris O’Malley

The Federal Energy Regulatory Commission denied MISO’s request for a rehearing of the commission’s July order that said the RTO could no longer allocate broadly within the American Transmission Co. pricing zone the costs of keeping open three power plants in Michigan’s Upper Peninsula.

MISO must now file a new study method to identify entities that benefit directly from the three plants operating under system support resource agreements (SSRs) and allocate costs of the agreements directly to them, the commission ordered on Feb. 19 (EL14-34-001).

The SSR plants at issue are Presque Isle, White Pine and Escanaba.

A few days before FERC’s order, however, Presque Isle owner We Energies asked MISO to seek the termination of SSR payments. We Energies acted after iron ore mining company Cliffs Natural Resources committed to remaining a customer of the aging 400-MW coal-fired plant near Marquette.

Wisconsin PSC Complaint

FERC’s order is a win for the Wisconsin Public Service Commission, which filed a complaint last year alleging that MISO improperly allocated SSR costs on a pro rata basis to all load-serving entities in the ATC footprint.

The PSC argued that 92% of the projected $52.2 million in annual fixed costs under the original Presque Isle SSR agreement would be allocated to load-serving entities in Wisconsin even though they would receive only 42% of the benefits from the plant’s continued operation.

FERC’s Feb. 19 order also rejected MISO’s request to revise cost allocation of the three SSR plants to reflect new, local balancing authorities established recently in the ATC pricing zone.

Michigan Complaints Moot

In a related order, FERC also dismissed as moot complaints that objected to the LBA and its cost allocation implications for the three SSR plants (ER14-103).

The Michigan Public Service Commission had alleged that Wisconsin Electric manipulated SSR cost allocation by splitting its LBA in half, with one portion encompassing Michigan’s Upper Peninsula, to increase Michigan’s allocation of SSR costs tenfold.

Michigan residential and commercial electric customers, along with numerous government agencies, flooded FERC with complaints about the effects the SSR allocation would have in the Upper Peninsula.

But FERC said the Michigan complaint was moot, as “we direct MISO to devise a new approach that will identify benefitting LSEs without relying on LBA boundaries.”

FERC said it would address refund requirements in a future order involving MISO’s new study methodology.