Key Takeaways

  • The Federal Energy Regulatory Commission (FERC) on Fridayapproved a cost allocation frameworkfor transmission projects initiated by the Midcontinent Independent System Operator (MISO) but to be built within the PJM Interconnection footprint.
  • Under the approved framework, Exelon's Commonwealth Edison will build a group of projects totaling approximately $904 million, while Duke Ohio is designated to build projects valued at $5.3 million. FERC rejected calls for the projects to undergo competitive bidding processes.
  • Two FERC commissioners noted that MISO's proposal highlights the importance of interregional transmission. In a joint concurrence, Commissioners Judy Chang and David Rosner said: "In some cases, the most cost-effective and efficient solution to a regional system need may include transmission upgrades located in another region. The benefits these facilities will provide—including enhanced reliability, reduced congestion costs, and more efficient resource integration—are inherently interregional in nature."

Deep Dive

MISO's proposal and related "cost recovery and funding" agreement stem from the grid operator's Tranche 2.1 plan, which includes building a 765-kV transmission backbone in its U.S. Midwest service area. The plan was approved in December 2024 by theMISO Board of Directors。

The plan requires some transmission facilities to be built within PJM's footprint. The Electricity Transmission Competition Coalition and the Industrial Energy Consumers of America argued that transmission projects located in PJM should follow MISO's competitive bidding requirements rather than being directly assigned to ComEd and Duke Ohio.

FERC disagreed, stating that MISO lacks the authority to drive or require transmission development in other regions. FERC said in its ruling: "We are not persuaded by the arguments of the Coalition, IECA, and [WPPI Energy] that not applying the 'competitive developer selection process' to PJM facilities in the [MISO Transmission Expansion Plan] would result in reduced transparency, exacerbate cost causation issues, undermine market solutions, and lose potential cost savings."

Commissioners Chang and Rosner noted that current grid operator rules may not fully reflect the growing need for interregional transmission. The two said in their opinion: "The steps MISO has taken to ensure these facilities can be built demonstrate the value and importance of interregional transmission projects, even though traditional definitions of transmission project types in existing tariff agreements have limitations in identifying valuable interregional projects."

The two commissioners believe transmission planners should make interregional transmission a "more routine and intentional" part of their work. They said: "Greater interregional interconnection would allow regions to share resources more efficiently, mitigate the impacts of extreme weather events, accelerate the interconnection of new load and various new energy resources, and minimize collective infrastructure costs."