Dive Brief:
- The Federal Energy Regulatory Commission on Friday approved a cost allocation framework for transmission projects sought by the Midcontinent Independent System Operator but built in the PJM Interconnection’s footprint.
- Under the approved framework, Exelon’s Commonwealth Edison is set to build one group of projects totaling about $904 million and Duke Ohio is slated to build $5.3 million in projects. FERC rejected calls for requiring the projects to undergo competitive solicitations.
- Two FERC commissioners said MISO’s proposal highlights the importance of interregional transmission. “In some cases, the most beneficial and cost-effective solutions for one region’s system needs may include transmission upgrades in another region’s footprint,” FERC commissioners Judy Chang and David Rosner said in a joint concurring statement. “The benefits that these facilities will deliver — which include improved reliability, reduced congestion costs, and more efficient resource integration — are inherently interregional in nature.”
Dive Insight:
MISO’s proposal and the related “cost recovery and funding” agreements grew out of the grid operator’s Tranche 2.1 plan that includes building a 765-kV backbone across its Midwest region. The plan was approved by MISO’s board in December 2024.
The plan required transmission in PJM’s footprint. The Electricity Transmission Competition Coalition and Industrial Energy Consumers of America argued that the PJM transmission should be subject to MISO’s competitive bidding requirements instead of the projects being directly assigned to ComEd and Duke.
FERC disagreed, saying that MISO lacks the authority to facilitate or require the development of transmission facilities in another region.
“We are not persuaded by Competition Coalition, IECA, and [WPPI Energy’s] arguments that, by not applying the Competitive Developer Selection Process to the [MISO Transmission Expansion Plan] PJM facilities, transparency is decreased, cost causation concerns are compounded, market solutions are undermined, and potential cost savings are lost,” FERC said.
Commissioners Chang and Rosner noted that grid operators’ rules may not reflect the growing need for interregional transmission.
“The steps MISO took to ensure these facilities can be constructed demonstrate the importance and value of interregional transmission projects even while the existing tariff’s legacy definitions for various types of transmission projects presented limitations on the opportunity to identify valuable interregional projects,” Chang and Rosner said.
Transmission planners should make interregional transmission a “more regular and intentional feature” of their work, according to the commissioners.
“Greater interregional connectivity will allow regions to share resources more efficiently, mitigate the impacts of extreme weather events, speed the connection of new demand and all types of new energy resources, and minimize collective infrastructure costs,” they said.
