A group of renewable energy developers lodged a complaint at FERC last week over MISO’s pursuit of a smaller system impact threshold on interconnecting generation, which will induce more network upgrades.
The group of eight developers, including National Grid Renewables, Invenergy and NextEra Energy, said MISO’s new rule — which halves some interconnecting generation’s allotted distribution factor (DFAX) to 10% — means the RTO is making “sweeping” cost allocation decisions while circumventing FERC approval (EL23-85). The grid operator did not run the change past FERC, entering the stricter cutoff into a Business Practices Manual (BPM) rather than its tariff. (See MISO, Stakeholders Debate Lower Congestion Limit.)
The new rule applies to MISO’s basic and unguaranteed level of interconnection service, called energy resource interconnection service (ERIS). The DFAX, which represents how much a generator impacts transmission congestion, is used to assign the costs of transmission upgrades to ERIS customers. The RTO is applying the more stringent DFAX threshold to customers within certain subregions and at certain transmission voltage levels.
The developers argued that MISO’s tariff is unjust and unreasonable because it is silent on cost allocation criteria for interconnection customers. They asked FERC to order MISO to revise its tariff to incorporate the previous 20% DFAX standard and only allow a smaller threshold if the RTO makes a formal proposal before the commission with evidence that the change is reasonable and necessary.
The developers argued that the Federal Power Act and FERC policy require that MISO keep its cost allocation criteria for interconnection customers on file with the commission.
“Should a public utility be permitted to change the cost allocation criteria that it uses to assign interconnection customers hundreds of millions of dollars in costs each year without commission oversight and without complying with the filing requirements of the FPA?” the developers asked rhetorically in their July 25 complaint. “MISO’s use of a BPM to make drastic changes to its cost allocation criteria reflects a fatal defect in MISO’s tariff: The tariff does not include the cost allocation criteria applied by MISO to determine the rates that a customer must pay to obtain interconnection service.”
MISO has said the lower tolerance on congestion contributions will allow upgrade costs to be shared among more interconnection customers and result in fewer unaddressed reliability issues passed on to later queue cycles or turning up in the RTO’s annual transmission expansion plans.
But the developers contended MISO has flouted statutory requirements by dodging the filing process on a proposal that will “materially affect the costs that customers are required to pay to obtain interconnection service and access the wholesale markets.” They said it didn’t respond to stakeholders’ requests that it justify its proposal.
“Although MISO may believe that a selectively applied 10% standard represents an improvement over prior practice, the only standard that has been shown to be within the range of reasonableness is the longstanding 20% standard. MISO has not provided any empirical data that shows the 20% DFAX standard is unjust, unreasonable or unduly discriminatory,” the developers said.
They also charged that MISO’s goal is reducing congestion for the sake of economics, not supporting reliability. The RTO should also employ a DFAX threshold uniformly, the developers argued.
