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MISO’s Multi-Value Projects (MVP) Cost Allocation Enables Reliable and Economic Delivery of Energy

As the Federal Energy Regulatory Commission (FERC) has long recognized, cost allocation for new transmission facilities is one of the most vexing issues in the development and modernization of the nation’s electric transmission grid. As environmental mandates and market forces compel greater integration of renewable energy resources and retirement of aging fossil fuel-fired generation facilities, transmission providers and regional transmission organizations have struggled with methods to develop and pay for modern transmission systems. These systems need to be sufficiently robust to ensure reliability and alleviate congestion while interconnecting new location-constrained, intermittent renewable resources and delivering power to remote load centers. Challenges have been particularly acute in the Midcontinent Independent System Operator, Inc. (MISO) region, given its location in the central portion of the United States spanning from Canada to the Gulf of Mexico, in the heart of a region that has been dubbed “the Saudi Arabia of Wind.”

Advising the MISO Transmission Owners and successfully prosecuting before FERC, the U.S. Court of Appeals for the Seventh Circuit, and the U.S. Supreme Court, we successfully established a new transmission cost allocation category for Multi-Value Projects (MVPs) in MISO that enable the reliable and economic delivery of energy in support of documented energy policy mandates. The MVP decision affirms MISO’s FERC-approved cost allocation for $5 billion in projects in 2011, which allowed construction to proceed without uncertainty as to who will pay the costs, resolving one of the most difficult issues facing MISO as the regional transmission organization. Also, after successfully obtaining a remand from the Seventh Circuit regarding the issue of cost allocation to adjoining regions, we won the remanded cost allocation issue at FERC.