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FERC Cuts Max Return for Transmission Owners in MISO Area

Oct. 5, 2016
FERC affirmed the initial decision issued by an administrative law judge in this matter last December.

The Federal Energy Regulatory Commission has cut the maximum returns that transmission owners in the region overseen by the Midcontinent Independent System Operator can earn. However, they did not cut them by as much as the transmission customers in the proceeding had asked for.

According to a report from American Public Power Association, FERC affirmed the initial decision issued by an administrative law judge in this matter last December, finding that the rate of return, which had been set at 12.38% for years, was unjust and unreasonable, and should be reduced to 10.32%.

The transmission customers that filed the complaint in the case had asked FERC to allow a base rate of return, or ROE, of no more than 9.15 percent.

FERC ordered MISO and transmission owners operating within MISO to provide refunds, with interest, for the 15-month refund period from Nov. 13, 2013 through Feb. 11, 2015. They must do so within 30 days of the order. Within 45 days of the order, they must file a refund report “detailing the principal amounts plus interest paid to each of their customers.”

The Sept. 28 order applies to all transmission owners in MISO, including public power utilities and rural electric cooperatives.

The transmission owners named in the proceeding are ALLETE, Ameren, Cleco Power, Duke Energy, Entergy, Indianapolis Power & Light, ITC Holdings, MidAmerican Energy, Montana-Dakota Utilities, Northern Indiana Public Service Co, Northern States Power, Otter Tail Power, and Southern Indiana Gas & Electric Co., along with their affiliated companies.

The Sept. 28 order from FERC also applies to American Transmission Co., which had been operating under a ROE of 12.2 percent.

The case stems from a complaint brought in November 2013 by a group of large industrial customers: the Association of Businesses Advocating Tariff Equity; Coalition of MISO Transmission Customers; Illinois Industrial Energy Consumers; Indiana Industrial Energy Consumers, Inc.; Minnesota Large Industrial Group; and Wisconsin Industrial Energy Group.

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