Manufacturers File FERC Complaint Against MISO To Remedy Unjust And Unreasonable Electric Transmission Cost Allocation Related To Billions In Transmission Spend

WASHINGTON, Jan. 23, 2020 /PRNewswire/ -- The Industrial Energy Consumers of America, the Coalition of MISO Transmission Customers, and LS Power Midcontinent, LLC jointly filed a Complaint at the Federal Energy Regulatory Commission (the Commission) against the Midcontinent Independent System Operator, Inc. concerning their cost allocation methodology in the MISO Open Access Transmission, Energy and Operating Reserve Markets Tariff for Baseline Reliability Projects. Between 2013 and 2019, MISO has approved a total of roughly $5 billion in Baseline Reliability Projects in its annual MISO Transmission Expansion Plans.

In filing the Complaint, Paul N. Cicio, President of the Industrial Energy Consumers of America made the following comments.

"In recent years, the transmission portion of our electric bills have been the single highest increased cost as compared to ALL other energy sources, directly impacting manufacturing competitiveness. The existing MISO cost allocation methodology fails the Commission's obligation to ensure just and reasonable rates. Action is needed by the Commission to provide for an expedited remedy. The vast majority of IECA member companies are energy-intensive trade-exposed (EITE), which means that relatively small increases in the price of electricity can have relatively high negative impacts to their global competitiveness directly impacting jobs and investment."

"The use of cost-causation principles is the foundation of just and reasonable rates for electric transmission allocation methodology. By charging 100% of the costs of every Baseline Reliability Project only to ratepayers in the zone in which the Project is physically located, MISO is violating these basic principles and is charging some ratepayers an amount that exceeds the benefit actually received from the project while undercharging others. In addition, ratemaking policy that maximizes competition in building electric transmission will result in lower overall ratepayer costs, without jeopardizing electric reliability. MISO's existing methodology denies IECA member companies the benefits of competition for the development and ownership of all Baseline Reliability Projects."

"MISO's previously approved and utilized line outage distribution factor (LODF) methodology is just and reasonable and should be utilized to allocate costs for Baseline Reliability Projects until and unless an alternative cost allocation methodology is approved by the Commission. The new methodology should apply, regardless of cost or voltage, effective the date of this complaint."

The Industrial Energy Consumers of America is a nonpartisan association of leading manufacturing companies with $1.0 trillion in annual sales, over 3,700 facilities nationwide, and with more than 1.7 million employees worldwide. It is an organization created to promote the interests of manufacturing companies through advocacy and collaboration for which the availability, use and cost of energy, power or feedstock play a significant role in their ability to compete in domestic and world markets. IECA membership represents a diverse set of industries including: chemicals, plastics, steel, iron ore, aluminum, paper, food processing, fertilizer, insulation, glass, industrial gases, pharmaceutical, building products, automotive, brewing, independent oil refining, and cement.

SOURCE Industrial Energy Consumers of America (IECA)