On September 17, 2020, FERC addressed the American Wind Energy Association’s (“AWEA”) request for rehearing of a December 2019 order finding that Generator Interconnection Agreements (“GIAs”), Facilities Construction Agreements (“FCAs”) and Multi-Party Facilities Construction Agreements (“MPFCAs”) entered into between June 24, 2015 and August 31, 2018 (“the interim period”) should be revised to allow Midcontinent Independent System Operator, Inc. (“MISO”) transmission owners and affected system operators to unilaterally elect to provide the initial funding for interconnection-related network upgrades. FERC’s September 17 order modified the discussion in the December 2019 order but continued to reach the same result. The order also accepted MISO’s proposed tariff sheets allowing transmission owners and affected system operators to elect transmission owner initial funding for network upgrades for GIAs, FCAs, and MPFCAs that became effective during the interim period. Commissioner Richard Glick issued a dissenting opinion in which he concluded that FERC’s order failed to meaningfully address concerns of undue discrimination and ignored evidence that allowing transmission owners and affected system operators to retroactively elect to self-fund network upgrades would result in substantial harm to interconnection customers and could lead to project terminations.
FERC’s order is the latest in the proceedings on remand resulting from the United States District Court for the District of Columbia Circuit’s (“D.C. Circuit”) decision in Ameren Servs. Co. v. FERC, 880 F.3d 571 (D.C. Cir. 2018), which vacated and remanded several FERC orders that removed from MISO transmission owners the ability to unilaterally elect to fund the construction of network upgrades on their systems to accommodate new generator interconnections (see February 7, 2018 edition of the WER). In the proceedings that followed, FERC reversed its determination in the vacated orders, directed MISO to make changes to its pro forma GIA, FCA, and MPFCA to allow transmission owners and affected system operators the discretion to unilaterally elect to provide initial funding for network upgrades on a going-forward basis, and requested further briefing how to address GIAs, FCAs, and MPFCAs that were entered into during the interim period, i.e., those agreements entered into after FERC’s 2015 determination that MISO transmission owners should not be allowed to unilaterally elect to fund network upgrades, up until FERC reversed that determination in 2018. Subsequently, in its December 2019 order, FERC held that GIAs, FCAs, and MPFCAs entered into during the interim period should be revised to allow transmission owners and affected system operators to unilaterally elect to provide initial funding for network upgrades if they so choose. AWEA sought rehearing of the December 2019 order, arguing that FERC erred in applying transmission owner initial funding to agreements entered into during the interim period.
The September 17 order rejected AWEA’s arguments that amending the interim period agreements would result in undue discrimination because all interconnection customers from 2005 through the end of the interim period in 2018 are similarly situated with respect to transmission owner and affected system operator funding. In addition, while AWEA argued that amending the interim period agreements would result in a significant increase in costs for interconnection customers, FERC concluded that, on balance, the harm to interconnection customers did not outweigh the harm to transmission owners that would result from not having the right to elect to provide initial funding for network upgrades. Finally, FERC accepted MISO’s compliance filing that revised its pro forma GIA, FCA, and MPFCA to provide transmission owners and affected system operations the unilateral right to elect to provide initial funding for interconnection-related network upgrades, effective June 24, 2015. FERC noted that affected agreements are currently pending in various dockets, and that it would act on those agreements at a future date.
Commissioner Glick’s dissenting opinion explained that he would have granted rehearing and ordered briefing to further develop the record. Commissioner Glick argued that transmission owners had failed to provide evidence that they will experience actual harm if the FERC leaves the interim agreements in place, while interconnection customers demonstrated that they will experience substantial harm if the existing agreements are revised. He therefore argued that FERC’s order was arbitrary and capricious and not the product of reasoned decision making.
Troutman Pepper represented the utility petitioners in the case.
FERC’s September 17 order, including Commissioner Glick’s dissent, is available here.
