Docket Nos. ER23-997-000, ER23-998-000, ER23-999-000
I concur with today’s orders as consistent with current Commission precedent. [1] As the orders explain, the MPFCA and FSAs at issue conform with MISO’s pro forma MPFCA and FSA and reflect the state of the law today.
I write separately to note two interrelated principles. First, generation developers in RTOs should pay the full “but for” costs of their interconnection, including network upgrades. Consumers (i.e., load) should not pay one nickel. They are not the ones seeking to profit from the interconnection. New generation in RTOs is supposed to be driven by the market, not by integrated resource planning, as in non-RTOs. This is the compelling principle underlying participant funding of interconnection in RTOs.[2]
Second, and equally important, when the developer pays the full “but for” costs of its interconnection, including the network upgrades, the transmission owner should not be able to profit on this investment, as the developer incurs a cost of capital, not the transmission owner. Allowing the transmission owner to profit on someone else’s capital investment (i.e., through a return on equity, or ROE) results in an unearned windfall. Plus, the transmission owner is free to seek cost recovery through applicable utility accounting rules for the operations and maintenance (O&M) costs it incurs associated with the upgrade.
In the pending American Wind Energy Association v. FERC remand proceeding, I look forward to the Commission addressing, among other things, the extent to which MISO’s interconnection-related pro forma agreements adhere to these principles.
For these reasons, I respectfully concur.
[1] See, e.g., Midcontinent Indep. Sys. Operator, Inc., 180 FERC ¶ 61,082 (2022); Midcontinent Indep. Sys. Operator, Inc., 180 FERC ¶ 61,081 (2022); Midcontinent Indep. Sys. Operator, Inc., 174 FERC ¶ 61,179 (2021).
[2] The same rationale applies to developers of merchant transmission lines who seek to interconnect. Midcontinent Indep. Sys. Operator, Inc., 181 FERC ¶ 61,218 (2022) (Christie, Comm’r, concurring at P 1), https://www.ferc.gov/news-events/news/commissioner-christies-concurrence-concerning-funding-interconnection-costs-rtos.