North Dakota regulators join complaint against grid operator for 'egregious' transmission planning

BISMARCK — The North Dakota Public Service Commission has joined a handful of states in filing a complaint to the Federal Energy Regulatory Commission against the Midcontinent Independent System Operator — a regional grid operator known as MISO that serves much of the Midwest.

The complaint, filed July 30, claims projects under MISO’s $22 billion transmission plan called “Tranche 2.1” were planned using skewed metrics that would cause state residents to “unjustly” pay higher energy costs at the benefit of other states, namely their renewable energy goals — objectives North Dakota does not share.

“Our legislature has made it clear that we do not share those same goals, and so our rate payers here should not be subsidizing those costs,” said Commissioner Jill Kringstad in a Thursday, Aug. 7, Public Service Commission meeting. “I’m not saying that these projects shouldn’t be built, but just that the states and utilities that need them should be paying for them.”

Peyton Haug / Forum News Service

According to the commission, electricity rates under the financing of Tranche 2.1 would increase for North Dakotans by approximately $5 per 1,000 kilowatt hours every month, an adjustment that would span decades. One-thousand kilowatt hours is the average monthly consumption for a North Dakota customer.

The purpose of Tranche 2.1 is to strengthen electric grid reliability by updating and increasing MISO’s transmission infrastructure across the midwestern United States. A major component of the build-out is a more than 3,600-mile transmission line aimed for completion within the next decade.

Much of the commission’s 213-page complaint challenges the grid operator’s methodology of selecting many of the 24 long-range transmission projects, alleging it “substantially overstated” the benefits of the plan, ignored input from the states and neglected to consider impending policy changes on the federal level — like the elimination of the clean electricity production tax credit.

Tranche 2.1 builds on Tranche 1, a more than $10 billion project underway to address similar infrastructure shortfalls. However, in planning Tranche 1, MISO used different measurements in determining the project’s overall value, according to the complaint.

MISO concluded the market benefits of Tranche 2.1 would yield, at a minimum, $38.3 billion over 20 years, but an independent consultant for the utility regulators found that figure to be $4.3 billion, around 10% of MISO’s estimate.

The complaint states MISO used arbitrary variables and inconsistently applied various states’ energy policy in coming up with the dollar amount associated with the plan’s overall benefits.

The grid operator’s value makes the Tranche 2.1 projects eligible for cost-sharing programs between states, but the number found by the independent analysis does not meet the threshold.

Other states joining the complaint are Arkansas, Louisiana, Mississippi and Montana. They are asking the Federal Energy Regulatory Commission to reconsider its approval of projects outlined in Tranche 2.1 and to find MISO is in violation of the federal rules that allowed the plan to move forward.

“MISO has really pulled an egregious maneuver here, and is exaggerating things way beyond reasonableness and if it’s (Trance 2.1) allowed to proceed, it’s going to cost North Dakota consumers a whole lot of money,” said Commission Chair Randy Christmann in the Thursday meeting. “It is so egregious that I’m pretty confident we will prevail.”

Peyton Haug / Forum News Service

A MISO spokesperson told Forum News Service on Thursday the organization is in the process of reviewing the complaint.

“The LRTP (Long Range Transmission Planning) Tranche 2.1 portfolio was developed through a collaborative process that included substantial stakeholder engagement, including more than 300 meetings and feedback on the solutions and benefits. The portfolio supports reliability and the future needs of the system,” said Strategic Communications Advisor Brandon Morris in an emailed statement.

The official complaint document can be viewed on the Federal Energy Regulatory Commission library website.