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FERC rejects complaint about MISO transmission planning that allocates all costs of “Baseline Reliability Projects” (BRPs) to the local IOU and therefore does not subject such projects to competitive development. https://elibrary.ferc.gov/idmws/file_list.asp?accession_num=20200728-3052
Background: FERC Order No. 1000 requires that transmission projects whose costs are allocated among the region’s IOUs be developed through a competitive process. Projects whose costs are paid entirely by a single IOU are developed by that IOU.
When MISO and the MISO IOUs complied with Order No. 1000, they removed BRPs from the regional cost allocation process and assigned all costs to a single IOU. This change ensured that BRPs would be developed without competition.
BRP projects ballooned. From 2010-2013 (before the change), MISO IOUs developed $340 million of BRPs per year. From 2014 to 2019, they built $777M per year. More transmission is good, right?
Well, regional projects went down from $6 billion (total, 2010-13) to just $300 million (2014-2019). Other categories of uncompetitive projects increased from $775M/yr to $1.9B/yr.
This pattern of transmission development – shifting $$$ from regional to uncompetitive local projects – is also in PJM. There, IOUs tripled spending on uncompetitive local projects, while total spending on regional projects has fallen by 1/3. https://www.pjm.com/-/media/committees-groups/committees/teac/2020/20200512/20200512-item-10-2019-project-statistics.ashx
Back to yesterday’s order, FERC concluded that the complainants did not meet their burden to show that the current cost allocation method does not result in an allocation of costs that is at least roughly commensurate with the distribution of benefits.
Put differently, the Complainants failed to show that BRPs produce “significant” regional transmission benefits that would necessitate regional cost allocation pursuant to the cost causation/beneficiary pays principle.
