MISO should eliminate the right of transmission owners to dictate how interconnection customers pay for network upgrades, the Federal Energy Regulatory Commission ruled last week.

The commission instituted a section 206 proceeding, saying MISO must either change its pro forma generator interconnection agreement (GIA) or explain why it shouldn’t (ER14-2464-002, et al.).

FERC said article 11.3 of MISO’s pro forma GIA appears unjust and unreasonable because it allows transmission owners to fund upgrades in a way that forces interconnection customers to pay them for costs other than the return of and on the capital costs.

The commission suggested MISO amend the GIA and related agreements to state that transmission owners may only choose to provide the initial funding for network upgrades if the interconnection customer agrees. Otherwise, the facilities would be solely funded by the customer.

If the customer agrees to the transmission owner providing the initial funding, FERC said, MISO’s rules must result in calculation of a revenue requirement that is just and reasonable, the commission said.

The ruling came in response to a request by Otter Tail Power that MISO be forced to extend the unilateral initial funding election in MISO’s pro forma GIA to its pro forma facilities construction agreement. Otter Tail sought the change regarding the 150-MW Border Winds wind farm in North Dakota.

MISO’s response is due in 60 days.

— Rich Heidorn Jr.