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Commissioner Cheryl A. LaFleur Statement
March 4, 2016
Docket No.
ER16-471-000 PDF
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Merricourt Decision

“Today’s order accepts a notice of termination filed by the Midcontinent Independent System Operator, Inc. (MISO) for the generator interconnection agreement (GIA) entered into by enXco Development Corporation (subsequently assigned to Merricourt Power Partners, LLC (Merricourt)), Montana-Dakota Utilities Company (Montana-Dakota) and MISO (Merricourt GIA). I dissent because I believe today’s order increases uncertainty regarding the Commission’s standard for reviewing notices of termination and incorrectly denies Merricourt an extension of its Commercial Operation Date (COD).

“In prior cases addressing notices of termination of individual GIAs, the Commission has stated:

    Commission precedent supports acceptance of a notice of termination if the applicant demonstrates that the proposed termination is not unjust, unreasonable, unduly discriminatory, or preferential, or if it is consistent with the public interest. When considering whether to extend milestones or to grant or extend a suspension, the Commission takes into account many factors, including whether the extension would harm generators lower in the interconnection queue and any uncertainty that speculative projects may present to other projects in the queue.1

“Therefore, in evaluating these requests, the Commission considers both the justness and reasonableness of the requested termination, and equitable factors. In so doing, the Commission has considered a broad range of factors, including whether other customers in the queue would be harmed by an extension, whether the interconnection customer’s failure to meet particular deadlines or payment obligations was within its control, whether an extension was expressly authorized or prohibited by the MISO generator interconnection procedures (GIP) or the interconnection customer’s GIA, and the progress made by an interconnection customer towards commercial operation.2

“Today’s order, however, fails even to acknowledge this established standard or Commission precedent considering equitable factors that might warrant granting an extension. Instead, the order simply concludes that a COD extension beyond three years is expressly precluded by Section 4.4.4 of MISO’s GIP, which was approved by the Commission in 2012, and ends its inquiry there. I disagree with this approach for reviewing extension requests. In numerous orders addressing notices of termination filed after the approval of Section 4.4.4, the Commission has specifically considered whether equitable factors would warrant an extension.3 If the Commission intends to change its policy and no longer consider equitable factors, it fails to explain the basis for that choice; if it intends to preserve its equitable authority, it fails to evaluate the facts of this case. In either event, today’s order unnecessarily muddles Commission precedent addressing notices of termination, thereby providing less clarity going forward.

“In my view, our precedent provides the Commission with clear authority to determine whether a COD extension is appropriate in a given case.4 Here, I believe that Merricourt has both demonstrated meaningful progress towards reaching commercial operation in a reasonable timeframe (i.e., by its requested extension date of September 30, 2017), and effectively rebutted concerns expressed by MISO that the Merricourt project is speculative and potentially harmful to other customers in the queue.

“MISO does not identify particular customers that might be harmed by allowing Merricourt to remain in the queue and extend its COD. Instead, MISO asserts that any extension of Merricourt’s COD would harm lower-queued customers or create uncertainty because a speculative project would remain in the queue, creating the potential for “cascading” restudies if the project fails to reach commercial operation. MISO’s argument, however, begs the question of whether the Merricourt project should be considered speculative. Based on the evidence in the record, I believe that Merricourt has shown substantial progress towards achieving commercial operation, which mitigates the potential harm to other customers in the queue.

“First, Merricourt has fully paid for the construction of approximately $17.8 million in network upgrades required for its interconnection, and upon which the studies for lower-queued customers might rely. Second, Merricourt provides evidence that it has secured a letter of intent for a PPA, as well as agreements for the main power transformer and turbines necessary to construct its project. In addition, Merricourt has secured an extension of its site permit from the North Dakota Public Service Commission and states that it has the funds available and ready to be deployed to construct the project.5 I also note that Montana-Dakota, the Transmission Owner to which the project would interconnect, does not object to a COD extension. Given the record, I would therefore reject MISO’s notice of termination and grant Merricourt’s request to extend its COD.

“I note that this is the latest in a series of dissents in which I have expressed concern about the Commission’s refusal to exercise its discretion in individual cases addressing infrastructure development.6 Building generation resources and transmission lines is a difficult, complex enterprise, and the Commission should be careful not to erect unnecessary barriers to their development in individual cases where there is no credible showing of harm to other parties. Unfortunately, today’s order may have the effect of doing just that, as it will likely result in the cancellation of a project in an advanced – though admittedly delayed – state of development, while bringing little, if any, benefit to the MISO queue process or to the clarity of the Commission’s precedent. I do not believe that this outcome is just and reasonable based on the record presented.

“Accordingly, I respectfully dissent.”






                                               

    1 E.g., Midwest Indep. Transmission Sys. Operator, Inc., 143 FERC ¶ 61,114, at P 23 (2013) (citations omitted) (Ellerth Wind); see also Midwest Indep. Transmission Sys. Operator, Inc., 137 FERC ¶ 61,008, at P 25 (2011) (Lakeswind I).
    2 See, e.g., Lakeswind I, 137 FERC ¶ 61,008 at PP 26-29; Midcontinent Indep. Sys. Operator, Inc., 147 FERC ¶ 61,198, at PP 29-32 (2014) (New Era); Ellerth Wind, 143 FERC ¶ 61,114 at PP 26-27.
    3 E.g., Midcontinent Indep. Sys. Operator, Inc., 149 FERC ¶ 61,053, at PP 29-31 (2014); New Era, 147 FERC ¶ 61,198 at PP 29-32; Ellerth Wind, 143 FERC ¶ 61,114 at PP 26-27.
    4 I also note that MISO acknowledges that the Commission has such authority. MISO Answer to Merricourt Complaint, Docket No. EL15-90-000, at 10 (Sep. 1, 2015).
    5 Merricourt states that it has already taken possession of 10 percent of the wind turbines for the project.
    6 Nevada Power Co., 153 FERC ¶ 61,227 (2015) (LaFleur, Comm’r, dissenting); Kenai Hydro, LLC, 151 FERC ¶ 61,243 (2015) (LaFleur, Comm’r, dissenting).