ATC: Validating Xcel Energy’s complaint would result in some quid-pro-quo

If FERC allows Xcel Energy‘s (NYSE:XEL) interpretation of the Midwest ISO’s transmission owners agreement to stand, granting it 50% ownership of the Badger Coulee transmission project, then American Transmission Company is entitled to 50% ownership of all of Xcel Energy’s CapX2020 projects, ATC argued in a filing to FERC.

ATC in its March 5 response asked FERC to dismiss Xcel Energy’s Feb. 14 complaint (FERC Docket No. EL12-28) alleging equal ownership of the Badger Coulee, or La Crosse-Madison, project, on the grounds that the line would interconnect to a proposed Xcel Energy facility. The complaint relies on an erroneous and incomplete interpretation of MISO’s transmission owners agreement (TOA), ATC said. A full, complete reading of the TOA would require the dismissal of the complaint, ATC said.

“[T]he TO Agreement was never intended to provide a [transmission owner] with an ‘exclusive right’ to build and own one half of any project that interconnects with its system,” ATC argued. “Indeed, the logical extension of that right would be that no line could be owned by a single entity unless all other interconnected entities agreed.”

If Xcel Energy’s complaint is valid, then it stands to reason that ATC would be granted the same rights to the CapX2020 projects, which propose to interconnect to ATC’s facilities, ATC said.

In its complaint, Xcel Energy asked FERC to force ATC to negotiate over the proposed multi-value project (MVP), detailing its efforts dating back to 1999 in researching the need for the line.

But MISO’s TOA provides no authority for the proposition that participation in a transmission planning process translates into ownership rights, ATC argued. “[C]ollaborative planning in the manner that [FERC] intended via Order Nos. 2000, 890 and 1000 does not equate to ownership entitlement,” ATC said.

Xcel Energy’s and other incumbent transmission owners’ (TO) claims over ownership have arisen from the advent of cost allocation and are a smokescreen for their true motives, namely more investment for less ratepayer impact, ATC argued.

Northern Indiana Public Service Company filed a similar complaint against Pioneer Transmission, citing the same section of the TOA (Appendix B, section VI) as Xcel Energy.

“The underlying but unspoken motivation is clear: MVP projects, in particular, are desirable to transmission owners because they have the benefit of providing significant investment opportunity for the transmission owner’s shareholders while allocating the costs over the entire ratepaying MISO region, thus reducing the rate impact of that investment on the customers of the transmission owner claiming an interest in such project,” ATC said.

To allow Xcel Energy’s interpretation of the TOA would result in stifling new transmission development that companies like ATC would pursue, ATC argued. More importantly, it would “transform the regional transmission planning process into a potentially collusive and non-competitive exercise that would subvert the real purpose of regional planning: the development of transmission projects that enhance efficiency, reliability and fulfill public policy,” ATC said.

ATC argued further that not only would such an interpretation of the TOA be impractical, it would thwart FERC’s policies to encourage regional transmission planning and development, as embodied in Orders 2000, 890 and 1000.

Such an interpretation would also likely force transmission owners into joint ventures for all of their projects, ATC said, making financing more difficult and complicating the siting and rate filing processes.

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.