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FERC Approves MISO Transmission Owners' Proposal to Eliminate Reactive Power Compensation for All Generators in MISO

Wright & Talisman represented the MISO Transmission Owners in their successful effort to eliminate capability-based compensation for reactive service in the Midcontinent Independent System Operator, Inc. (MISO) region. This means there is no longer a separate charge to Transmission Customers to compensate generation resources for reactive service provided within the standard power factor range (known as the “deadband”) or within the range specified in generators’ interconnection agreements, if different.

The Federal Energy Regulatory Commission (FERC) approved these revisions as just and reasonable, and not unduly discriminatory or preferential. FERC relied on the comparability standard, reasoning that if a transmission provider does not separately compensate its own or affiliated generators for reactive power service within the required standard power factor range, it is not obligated to compensate non-affiliated generators for reactive power service within that same range.

The resulting elimination of capability-based compensation frees not only MISO Transmission Owners, but also FERC’s staff and MISO’s staff, from the administrative burdens imposed by increasingly frequent and contentious settlement proceedings concerning reactive power filings. Eliminating capability-based compensation also provides relief to transmission customers in MISO and their rate payers, as they are no longer required to pay for reactive power compensation within the deadband.