Policy & Regulation

FERC accepts MISO’s generator interconnection reforms, rejects MW cap

FERC accepts MISO’s generator interconnection reforms, rejects MW cap
(FERC headquarters. Credit: Ryan McKnight / Flickr )

The Federal Energy Regulatory Commission (FERC) has accepted the latest interconnection reform package proposed by the Midcontinent Independent System Operator (MISO), which was proposed last November. As expected, FERC accepted most of the key elements of MISO’s reforms, such as increased milestone payments, automatic withdrawal penalty provisions, and expanded site control requirements. FERC also accepted MISO’s transition plan, which means these reforms can only be applied to interconnection requests starting with the Definitive Planning Phase -2023 cycle.

There is good news for renewable developers in this FERC decision. FERC rejected MISO’s proposed MW cap. MISO must open the 2023 queue window soon, because it did not accept any generator interconnection applications last September due to this reform package. FERC Commissioner Christie dissented on the MW cap part of the package because he believes MISO should impose a cap. It remains to be seen if MISO petitions FERC for a rehearing request on the matter, but in the meantime, MISO has no excuse to keep the 2023 queue window closed.

FERC not convinced MW cap was just and reasonable

MISO argued that a MW cap by region was essential to manage the size of the queue, but FERC was not convinced for three reasons. First, FERC was concerned about the four exemptions from the proposed cap. Commissioner Christie raised objections about the state commission exemption in his dissent. However, the majority of Commissioners agreed with the commenters that the exemptions undermined the reason for the cap. As I have previously mentioned, these exemptions don’t really amount to much for the developers, specifically the ERIS to NRIS conversion exemption.

FERC also rejected MISO’s MW cap because it is anti-competitive. FERC stated that the MW cap was not in line with the open access requirements of FERC Order 888. FERC even mentioned the recent surplus interconnection requirements Order 845 in citing a reason for rejecting MISO’s MW cap.

The third reason for FERC’s rejection was the replacement facility exemption, which was one of the four exemptions. FERC said MISO did not demonstrate that this replacement facility exemption was not unduly discriminatory. FERC lamented that MISO provided only a single statement in its support for this exemption. In providing a detailed explanation of why MISO’s proposal was rejected, FERC is signaling to MISO that a new and improved proposal for the MW cap may be approved in the future. FERC specifically pointed to dispatch assumptions in MISO’s studies that could be improved if MISO decides to pursue this MW cap further. For developers, this means there is no MW cap for now, but there is a strong possibility that MISO will take a second bite at the apple.

Focus shifts to when MISO opens 2023 cycle window

MISO asked for FERC’s decision by January 22, and FERC made its decision a few days early. Now, the focus is on MISO. It remains to be seen how soon MISO opens the queue window and whether it will open the 2024 window again in September or buy some time. There is also the issue of MISO’s compliance plan with FERC Order 2023 is looming in the background.

The bottom line of the proposed reform package is that developers must pay more to enter MISO’s queue in the future. FERC largely disagreed with generation developers on most aspects of MISO’s proposal, except for the MW cap discussed above. Renewable developers could try a rehearing request on the increased milestone payments, for instance, but it is unlikely that it will go anywhere since the majority of Commissioners were aligned on MISO’s reform package.