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ARTICLE · 27 JUNE 2016

FERC Issues Show Cause Order To MISO Over Reactive Power Compensation

Going forward, FERC directed MISO to maintain a chart on its website listing all resource owners receiving compensation for Reactive Service.

United StatesEnergy and Natural Resources

On June 16, 2016, FERC directed the Midcontinent Independent System Operator, Inc. ("MISO") to either: (1) revise its Tariff to ensure that a generation or non-generation resource owner will no longer receive compensation for Reactive Supply and Voltage Control Service ("Reactive Service") after it has deactivated or transferred its unit(s), and to clarify the treatment of Reactive Service revenue requirements for such unit(s); or (2) show cause why it should not be required to do so. FERC also directed MISO to post and maintain a chart listing all resource owners receiving compensation for Reactive Service, along with their current Reactive Service revenue requirements.

In MISO, compensation for Reactive Service is governed by Schedule 2 of the MISO Tariff. In accordance with that schedule, on March 2, 2016, Consumers Energy Company ("Consumer Energy") filed with FERC revisions to its reactive power revenue requirement to reflect the updated status of

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