FERC Order Strikes Down ITC Midwest’s 100% Network Upgrade Reimbursement

FERC recently struck down a MISO Tariff provision that reimbursed new generators 100 percent for interconnection-related network upgrades in ITC Midwest, LLC (ITCM) (Click here for a copy of the Order). Now generators in ITCM will only receive reimbursement for 10 percent of the costs of network upgrades rated at or above 345 kV, and no reimbursement for network upgrades rated less than 345 kV. The ITCM pricing zone has significant wind resources, and the 100 percent reimbursement policy was considered a boon to developers in that region. Under the policy, generators paid network upgrades upfront and then were reimbursed upon commercial operation, provided the generator committed to serving any MISO load. The ITCM reimbursement policy stems from Order No. 2003, but subsequent orders allowed independent transmission owners flexibility to depart from providing full reimbursement for interconnection-related network upgrades.