Supreme Court lets stand FERC ruling on tariff for renewable transmission lines

Source: Jeremy P. Jacobs, E&E reporter • Posted: Tuesday, February 25, 2014

The Supreme Court today declined to review the Federal Energy Regulatory Commission’s approval of a tariff system for the cost of new transmission lines for renewable sources in the Midwest.

The Midcontinent Independent System Operator, or MISO, in 2010 asked FERC to approve tariffs to upgrade and install transmission lines for connecting renewable energy sources called “multi value projects,” or MVPs, to the existing grid.

MISO was seeking to link wind farms in the Great Plains to the rest of its system, and it allocated the cost of the lines to all utilities drawing power from its system according to the amount of energy used. So, urban centers were charged more than rural areas.

Michigan and several utilities challenged that structure in court, arguing that the upgrade costs should be proportional to the benefits its consumers will receive.

The state claims that it gets the vast majority of its power from neighboring grid operators and that the new transmission lines won’t benefit the state, so it shouldn’t have to pay for the upgrades.

Michigan and utilities in Indiana, Illinois and Wisconsin asked the Supreme Court to take up the case.

“In its apparent zeal to promote renewable energy,” the Indiana-based Hoosier Energy Rural Electric Cooperative wrote in its petition, “FERC approved a novel ratemaking scheme that imposes billions of dollars in transmission project costs on customers in over a dozen states without regard to the actual costs caused or benefits received by those customers.”

The Chicago-based 7th U.S. Circuit Court of Appeals upheld FERC’s approval of the plan, ruling that the upgrades improve overall grid reliability and therefore benefit the entire system.

By declining to take up the case, the justices left that ruling in place.