FERC last week approved a settlement in a dispute between WPPI Energy and MISO over how to allocate voltage and local reliability (VLR) costs to pseudo-tied load (ER12-678-006).

The commission also granted WPPI rehearing in a related case, ordering MISO to pay refunds from September 2012 rather than July 2014 in a reallocation of costs for revenue sufficiency guarantees paid to resources providing VLR support (ER12-678-004, EL14-58-001).

In 2012, FERC approved MISO’s proposal to allocate VLR costs to all loads in a local balancing authority area (BAA), including pseudo-tied loads — load that is effectively transferred from a source local BAA, in which that load is physically located, to a different host (or “sink”) BAA. In a later order, the commission had reasoned that “the local BAA of the host load is responsible for voltage management in the pseudo-tied local BAA, and therefore MISO’s proposal comports with cost causation.”

FERC reversed course in June 2014, saying it had “erred” in approving MISO’s cost allocation and setting the issue for settlement discussions.

The commission said the settlement resolves the issue of “whether MISO should allocate VLR costs incurred in responding to a localized constraint to a market participant such as WPPI based on its load that is physically remote from the constraint, because that load has been pseudo-tied into the LBA area affected by the constraint.”

The settlement will revise MISO’s Tariff by adding a new term, “internal commercially pseudo-tied load,” and new language requiring submission of meter data by market participants that have such loads. MISO agreed to resettlements of WPPI’s VLR payments as soon as possible after the installation of necessary software changes and WPPI’s submission of required meter data.

In the related order, the commission agreed with WPPI that refunds from the reallocation should be effective as of Sept. 1, 2012, the date MISO’s original rate proposal went into effect, rather than July 9, 2014, the date FERC originally set.