FERC last week approved GridLiance High Plains’ sale of controversial Missouri transmission assets to the nonprofit Missouri Joint Municipal Electric Utility Commission (MJMEUC) (EC22-24).
The commission ruled Thursday that GridLiance’s deal for a 4-mile, 161-kV line, four small 69-kV lines and terminal equipment is in the public interest. The transaction marks MJMEUC’s first foray into transmission ownership; it already owns generation in MISO and SPP.
GridLiance purchased the transmission facilities from the city of Nixa, Mo., in 2018 and placed them under SPP’s control. The transmission-only utility has been involved in an unresolved dispute with the RTO and some of its members over the facilities’ inclusion into one of SPP’s transmission pricing zones. GridLiance’s annual transmission revenue requirement for the facilities has raised costs for the zone’s other transmission customers. (See FERC Remands GridLiance ATRR Settlement.)
FERC considered ongoing disagreement as out of scope, sticking to narrow, predefined criteria to approve the sale. It said the sale will not adversely affect transmission rates, though MJMEUC said it will recover the assets’ net book value through its ATRR. The commission noted that ownership is changing hands from a for-profit business to a not-for-profit utility, which comes with a different capital structure, tax obligation and return on equity.
GridLiance estimated that MJMEUC’s ATRR is about 32% lower than its own because of the latter’s nonprofit status. The TO said the commission has lower administrative expenses and does not pay property or income taxes, thus enjoying a lower cost of debt.
FERC said the transaction won’t disturb competition, state or federal regulation, or wholesale power rates because the sale does not involve the transfer of generation facilities.
Nearby city utilities in Missouri and Arkansas involved in the SPP transmission pricing dispute — Paragould Light Water & Cable, Paragould Light Commission, Poplar Bluff Municipal Utilities, Kennett Board of Public Works, City of Piggott Municipal Light Water and Sewer, and the City of Malden — asked FERC not to presuppose that the transmission facilities will continue to be included in the zonal cost allocation.
The commission declined to address the request, explaining its order focused on the transaction and not the facilities’ rate treatment.
