Duke-ATC, LS Power, others file into Xcel Energy, Pioneer complaints

The complaints Pioneer Transmission and Xcel Energy (NYSE:XEL) respectively filed over the rights to invest in and construct two transmission lines have attracted the attention of the transmission industry.

LS Power, Duke-American Transmission Company (DATC) and the Midwest ISO (MISO) on Feb. 28 filed as interveners in the complaint Pioneer brought against Northern Indiana Public Service Company, a subsidiary of NiSource (NYSE:NI) (FERC docket EL12-24).

Wisconsin Electric Power, a subsidiary of Wisconsin Energy Corp. (NYSE:WEC), and NextEra Energy Resources (NYSE:NEE) on Feb. 27 filed as interveners in the complaint Xcel Energy brought against American Transmission Company (ATC) (FERC docket EL12-28). 

DATC and LS Power supported Pioneer’s argument on the grounds that MISO’s transmission owners agreement (TOA) erects a barrier to entry for non-incumbent transmission companies.

“[A]t every turn there seems to be a rule or policy that serves as an anticompetitive road block to prevent entities like Pioneer and DATC from entering the transmission business,” DATC said in its filing. “The Commission should not condone the use of the TO Agreement or the MISO’s tariff rules as barriers to new transmission development, especially when that was not the commission’s intent when the tariff rules and TO Agreement were approved.”

Pioneer is a joint venture formed by Duke Energy (NYSE:DUK) and American Electric Power (NYSE:AEP).

DATC said allowing NIPSCO’s interpretation of the TOA to stand will have a negative effect on transmission development in the Midwest, and specifically on DATC’s own proposed portfolio of projects, amounting to $4.2bn of investment.

“If NIPSCO’s interpretation prevails, then DATC will have to convey billions of dollars of its proposed new transmission facilities to others,” DATC said.

LS Power, in support of Pioneer, invoked Xcel Energy’s Feb. 14 complaint against ATC. In its complaint, Xcel Energy claimed rights to the Madison-La Crosse line, which ATC has dubbed the Badger Coulee project, approved in MISO’s transmission expansion plan, approved in December 2011 (MTEP11) and noted ATC has unilaterally pursued the line without Xcel Energy’s participation.

In the course of its argument, Xcel Energy said the MISO tariff circumscribes non-TOs’ development activities, not the TOA. 

“[A] non-TO is not bound by the TOA, and the share equally provisions would therefore not apply to such non-TO third party,” Xcel Energy said in its complaint. The company was referring to Appendix B, Section VI of the TOA, which states that the responsibility to construct facilities that connect two or more TOs’ facilities belong equally to each other.

“[I]t is the Tariff, not the TOA, which provides MISO the discretion to designate a non-TO third party to finance, own and construct a transmission facility within MISO in furtherance of the Commission’s policy goals,” Xcel Energy said in its complaint. “Therefore, [Xcel Energy Services’] interpretation of the share equally provisions does not impede non-TO third parties from owning transmission facilities.”

LS Power adopted this argument in support of non-TOs: “[LS Power] urges the commission to grant Pioneer the relief requested and explicitly state in its order that a right of first refusal does not exist in MISO to prevent designation of a non-incumbent transmission developer to construct and own a project that it sponsors. 

Xcel Energy also filed as an intervener in Pioneer’s complaint against NIPSCO, disagreeing with Pioneer’s request that FERC find the share equally provisions in MISO’s TOA unjust and unreasonable, and with Pioneer’s argument that a finding otherwise would constitute a right of first refusal (ROFR), subverting FERC’s elimination of ROFRs in Order 1000.

Wisconsin Electric Power and NextEra Energy each requested intervener rights in Xcel Energy’s complaint against ATC, Wisconsin Electric Power on the basis that it has a direct and unique interest in the proceeding, and NextEra on the basis that it will be directly affected by the proceeding’s outcome.

About Rosy Lum 525 Articles
Rosy Lum, Analyst for TransmissionHub, has been covering the U.S. energy industry since 2007. She began her career in energy journalism at SNL Financial, for which she established a New York news desk. She covered topics ranging from energy finance and renewable policies and incentives, to master limited partnerships and ETFs. Thereafter, she honed her energy and utility focus at the Financial Times' dealReporter, where she covered and broke oil and gas and utility mergers and acquisitions.