By Amanda Durish Cook
FERC last week declined MISO’s request to reconsider a 2008 refund order stemming from transmission pricing complaints filed by the city of Holland, Mich., and DTE Energy Trading more than a decade ago (EL05-55-003, EL05-63-005).
Proceedings for the case go back to early 2005, when FERC found that MISO had violated its Tariff by charging the Holland Board of Public Works and DTE a higher hourly non-firm point-to-point transmission rate in instances when the utilities redirected the receipt point for their firm point-to-point service within the same transmission pricing zone — but on a non-firm basis. The commission ordered MISO to issue refunds with interest for the difference between the two hourly service rates. The RTO was also required to file accompanying refund reports for Holland, DTE and “other similarly situated customers,” effectively extending refund eligibility to other market participants incurring similar charges.
In May 2008, after conditionally accepting MISO’s 2005 and 2006 refund reports, FERC further ordered the grid operator to refund overcharges for ancillary services associated with customers’ redirect service.
In its rehearing request, MISO contested the ancillary services refund along with aspects of FERC’s earlier decisions. The RTO argued that FERC’s rulings had violated the Federal Power Act on two counts.
First, by directing MISO to refund the charges related to ancillary services, the commission had corrected its order outside the timeframe permitted under the FPA, namely before an appeal had been filed or in advance of the deadline for petitioning for judicial review. MISO also said FERC sought to exploit ambiguities in its refund order by rewriting the methodology associated with the refunds.
Second, FERC’s order directing MISO to issue refunds dating back to 2002 violated an FPA provision barring refunds for periods preceding a complaint filing, MISO said.
MISO further contended that any refunds should be limited to the original complainants, and that calculating and issuing refunds to all affected customers during the period in question will be “time-consuming and costly.” FERC has stipulated a refund period of February 2002 to January 2009.
In denying the rehearing, FERC reiterated that the commission has “authority to go back to the date that the violation first occurred” and its seven-year refund period was “consistent with the refunds previously provided and accepted in these proceedings.”
FERC also said that ancillary services are needed to maintain reliability for transmission service and should be priced accordingly.
“Because these ancillary services were necessary to accomplish transmission service, they are part of any transmission service, including redirect service, and should be priced consistent with the service being provided,” FERC said. “The commission’s general policy is to order refunds for overcharges and for violations of the filed rate.”
