Renewable Energy Development Reopens in Upper Midwest

On December 16, the Federal Energy Regulatory Commission (FERC) conditionally approved a proposal by the Midwest Independent Transmission System Operator (MISO) that significantly changes how large transmission upgrades are funded across the Midwest.

“MISO’s proposal, deemed by FERC to be effective July 16, 2010, creates a new category of transmission projects called Multi-Value Projects (MVPs) for upgrades that are determined to enable reliable and economic delivery of energy in support of public policy mandates, or laws that address transmission reliability and congestion across multiple transmission zones,” says Kevin D. Johnson, an energy attorney and office managing partner of Stoel Rives LLP's Minneapolis office. “Various regions have developed their own unique cost allocation approaches for transmission projects.  MISO’s decision to spread the costs of MVPs broadly shifts more power to the regional authority for planning and investment.”

To qualify for MVP treatment, a transmission project must either bring about an increase in reliability or economic efficiency, or aid in achieving mandated state or federal public policy goals. Projects qualifying for MVP status based on economic factors must demonstrate economic benefits in multiple zones.

 "While there are still a few more steps before new transmission lines to serve wind are actually built, this is critical step for deciding how they will be paid for,” adds Sarah Johnson Phillips, an associate in Stoel Rives’ Energy Development Practice Group. “Many wind projects in the MISO region have been delayed by transmission constraints, but the new MVP cost allocation mechanism could break the logjam and get these projects moving.”  Under MISO’s plan, wind developers will still be responsible for the costs of interconnection projects, which could still be a barrier for wind development in the region if enough MVPs are not identified and approved.

Mr. Johnson and Ms. Phillips are available to discuss the MISO’s plan and its impact on renewable energy projects in the Midwest. [12/23/2010]