By Rory D. Sweeney

FERC last week conditionally approved revisions to the MISO-PJM Joint Operating Agreement on cost allocation for cross-seam transmission projects, while denying rehearing requests from PJM and the RTOs’ transmission owners (ER13-1944, et al.).

In rejecting the rehearing requests, the commission said the grid operators and TOs chose the avoided-cost-only method for allocating the costs of such projects, so any issues that method creates should be addressed within the operators’ stakeholder processes.

In a previous filing, PJM and MISO settled on a cost-allocation method that is based on how much the cross-border project saves each grid operator on regional projects it supplants. The commission, however, said the method didn’t consider regional projects that have already been selected, nor did it explain how it would measure if an interregional project is more efficient or cost effective than a regional one.

MISO’s TOs asked for the rehearing because they were concerned that displacing projects that had already been selected wouldn’t allow them to recover millions of dollars in development costs incurred on those projects prior to them being abandoned. MISO’s Tariff, they noted, does not explicitly provide for such recovery.

“To the extent that MISO transmission owners are requesting that the commission mandate full cost recovery for transmission projects selected in a regional transmission plan but displaced by an interregional transmission project, we reject their request as outside the scope of the Order No. 1000 compliance proceedings,” the commission said.

“If MISO transmission owners continue to believe that these costs are not treated appropriately under MISO’s Tariff, they may pursue changes through the MISO stakeholder process and make a filing to amend the MISO Tariff or else file a complaint with the commission pursuant to [Federal Power Act] Section 206.”

FERC approved portions of the grid operators’ compliance filings, including how projects can be categorized, but it ordered additional changes to eliminate some inconsistencies. (See “MISO Order 1000 Compliance,” MISO Planning Advisory Committees Briefs.)

MISO and PJM have 30 days to make additional filings to fully comply with the order.