FERC on Thursday authorized MISO’s settlement agreement with parties unhappy over their fees for using the regional transfer limit linking the RTO’s Midwest and South regions (ER21-530-001).

The RTO’s settlement with MidAmerican Energy, Alliant Energy and the Michigan Public Service Commission replaces the rate structure used to compensate SPP and six other parties for its members’ use of the sub-regional transfer limit beyond the 1,000-MW contract path linking MISO Midwest and MISO South. The new rate structure is effective February 2021.

MISO originally planned to extend the use of its current load ratio-based allocation among members until February 2022 while it developed a permanent rate structure. But Alliant Energy and MidAmerican Energy complained that market participants in an Iowa local resource zone bore a disproportionate one-third of rate schedule costs in 2020, leading FERC to order a hearing into the matter. (See FERC Orders Hearing on MISO Pact for Midwest-South Tx.)

MISO has proposed adopting a new, market-based allocation that assigns costs based on the congestion accrued when the transfer limit binds on its 2,500- or 3,000-MW limits, depending on flow direction. The RTO has said its current load-based method, which also employs a diminishing flow-based calculation, is too complex. (See MISO Proposes New Cost Allocation on Regional Tx Limit.)

While the load-based allocation will technically stay in place this year, MISO has pledged to retroactively use the new allocation to redistribute payments made between Feb. 1, 2021, and Jan. 31, 2022.

The commission said the settlement — which will likely involve MISO issuing refunds or supplemental bills with interest to members — is reasonable, fair and in the public interest.