By Amanda Durish Cook
MISO must charge equal fees to all generators entering its interconnection queue regardless of whether they are internal, external, new or existing resources, FERC ruled last week (EL15-99).
The commission also directed MISO to revise its Tariff to spell out procedures related to external resources entering the queue, a process currently described only in the RTO’s Business Practice Manuals. FERC agreed with a group of MISO generators who contended that the absence of an explicit Tariff provision created a lack of transparency around the nature of RTO service agreements with external resources.
“The commission requires that matters that significantly affect rates and services, are readily susceptible of specification and are not so generally understood be in the Tariff rather than Business Practice Manuals,” the order stated.
FERC considered the issue significant enough to open a separate Section 206 proceeding (EL16-12) to review MISO’s Tariff and require revisions outlining specific procedures and milestone payments for all interconnection customers.
The ruling stems from a complaint by a group of internal MISO generators who contested the RTO’s practice of exempting external generating resources from paying a significant fee levied on any new internal resources seeking to enter the final stage of the interconnection process.
At the outset of the definitive planning phase (DPP), any new MISO interconnection customers within the footprint must make an M2 milestone payment to fund system impact and interconnection facilities studies, as well as a later network upgrade facilities study, before preparing a construction schedule and cost analysis. Existing internal generators are exempted from the payments. MISO also waives the fee for both new and existing generators outside its footprint under the assumption that those resources have already established interconnection agreements within their own balancing areas.
The complainants contended that the differing payment requirements represent a competitive disadvantage for them because external generators face a “significantly lower entry fee than generation internal to MISO.” The generators further argued that the lack of monetary collateral tied to the DPP phase could lead external resources to submit speculative project requests or nonchalantly withdraw projects, forcing MISO to revise its study assumptions and thereby delay other projects in the queue. They asked FERC to consider two options: Either force MISO to require all new interconnection customers to pay the milestone payments or eliminate the payments altogether in the interest of fairness.
In its answer to the complaint, MISO said the request to treat existing external generation identically to new internal generation was unjust and unreasonable. The RTO pointed to the milestone payment exemption for existing generation, also noting that the payments are refundable upon finalizing a generator interconnection agreement. The RTO said it would resolve the payment dispute by charging “some form” of initial payment to external customers wanting to enter the queue.
In its ruling, FERC went a step beyond the complainants’ original request by requiring all interconnection customers — including existing internal generators — to post milestone payments.
“All interconnection customers, whether they are new or existing, or internal or external, are seeking interconnection service and will be entering the DPP,” the commission said. “The Tariff provisions should ensure that all interconnection customers, internal and external, and new and existing, are treated comparably.”
FERC gave MISO 60 days to update its Tariff with the changes related to the interconnection process. The changes must include a pro forma service agreement and initial payment details for external resources. A final order on the matter is expected by Nov. 30.
