Opinion ID: 187241
Heading Depth: 2
Heading Rank: 1

Heading: Misplaced Reliance on the RECB Task Force

Text: The petitioners contend that FERC erred in [g]iving [w]eight to the [n]on-[c]onsensus `[s]takeholder [p]rocess,' relying on the recommendation of the RECB Task Force, which entity consist[ed] predominately of vertically integrated utilities located outside of Wisconsin. [10] PSCW Br. 20. They claim that vertically integrated utilities could and did, to their economic benefit and without regard to benefits and cost causation, engage in an economic cram down of costs on Wisconsin, a small minority. Id. at 9. We find this argument unpersuasive. First, the Commission often gives weight to a proposal [that] may not `represent complete stakeholder consensus' but is `the position of the majority of the transmission owning members of [the RTO].' Am. Elec. Power Serv. Corp. v. Midwest Indep. Transmission Sys. Operator, Inc., 122 F.E.R.C. ¶ 61,083, ¶ 172 (2008) (quoting PJM Interconnection, L.L.C., Opinion No. 494, 119 F.E.R.C. ¶ 61,063, ¶ 56 (2007)) (alteration by court). Further, the petitioners do not offer any evidence of majority overreaching or assert the process was not `open' or did not `allow[] for extensive participation.' PSCW Br. 21. Instead, they challenge the fairness of the cost-allocation policy the majority approved at the conclusion of the lengthy deliberative process, which, as we have noted, FERC reasonably determined to be just and reasonable. FERC Tariff Ord. at 61,351. That the allocation starting date the majority chose may have affected Wisconsin projects disproportionately in the short term [11] because of the large number of projects ATC had planned before that datedoes not make the policy unduly discriminatory. As FERC explained on rehearing, ATC will benefit from the cost sharing proposal in the future, noting that four projects by ATC, amounting to over $350 million, should qualify for regional and/or sub-regional cost sharing under the Midwest ISO cost allocation policy. FERC Reh'g Ord. ¶ 98. The petitioners challenge in particular FERC's finding that the exclusion list `is a reasonable compromise position' as not based upon any MISO contention in the October 7 filing, which nowhere characterized the exclusion list as a `compromise.'  PSCW Br. 22; see FERC Tariff Ord. at 61,363; FERC Reh'g Ord. ¶ 94. The petitioners further contend that the proposal was in fact not a compromise midpoint between positions. PSCW Br. 23; accord ATC Reply Br. 8-9. In any event, PSCW contends, FERC had a[] [Federal Power Act] duty to independently determine whether the proposal before it is just and reasonable. PSCW Br. 26 (footnotes omitted); cf. Tejas Power Corp. v. FERC, 908 F.2d 998, 1003 (D.C.Cir. 1990) (although court has consistently required the Commission to give weight to the contracts and settlements of the parties before it, the Commission may approve the settlement and certificate the proposed service only if, in its independent judgment, the new service `is or will be required by the present or future public convenience and necessity' (quoting 15 U.S.C. § 717f(e)) (internal citation omitted)). We reject this argument as well. First, in its October 7, 2005 filing, MISO did characterize its cost allocation proposal, of which the Excluded Projects List is a part, as a compromise, that is, a midpoint between generators being directly assigned all costs as in other RTOs/ISOs and the tariffs applicable to non-independent transmission providers that required the refunding of all costs. Cost Allocation Policy Letter 14. MISO explained that the proposal was a tenuous balance that was voted on by task force members as a package, and to change individual elements would result in a proposal for which support for the proposal as a whole would be highly uncertain. Id. 14-15; see also Mot. to Intervene and Supporting Comments of the Midwest ISO Transmission Owners 3-4 (Oct. 28, 2005) (describing negotiating positions and compromises). With regard to the Excluded Project List in particular, MISO recounted that stakeholders had been concerned about the wide variability in [then] current investment projections, in addition to the fact that some Midwest ISO member systems [we]re currently in a building crest, while others [we]re not and, when discussions did not yield a method that stakeholders could agree on or uniformly support, the RECB Task Force adopted the going forward approach, which was an equitable way to resolve this critical `starting-point' issue. Cost Allocation Policy Letter 13. In any event, the Commission noted on rehearing that, notwithstanding some parties disagree[d] with the use of the phrase `compromise position,' [their] request for rehearing d[id] not change [FERC's] findings in the February 3 Order with regard to the appropriateness of the RECB Task Force process. FERC Reh'g Ord. ¶ 95. Finally, as explained above, FERC did make its own, independent assessment that the policy was just and reasonable, FERC Tariff Ord. at 61,351, and that assessment is neither arbitrary nor capricious.