Dive Brief:
- Federal officials have ordered a review of just who should pay to keep the lights running in Michigan's eastern Upper Peninsula's, but in the near-term ratepayers will avoid a hefty increase that had been set to take effect.
- FERC last week issued an order affirming that system support resource (SSR) costs must be allocated to the load-serving entities that require their operation for reliability purposes, and called for an assessment of who should pay to continue operating the Presque Isle facility.
Dive Insight:
Ratepayers on Michigan's Upper Peninsula will avoid an immediate rate increase, but the Milwaukee-Wisconsin Journal Sentinel points out that FERC has essentially restarted the process to determine who should pay to keep the Presque Isle coal power plant operating.
In an order last week, FERC determined that SSR costs must be allocated to the load-serving entities that require their operation, but the commission also found the Midcontinent ISO's current practice fails to allocate costs of the three SSR units located within the American Transmission Company LLC pricing zone directly to the entities that benefit from their operation.
FERC "directs MISO to file a new study method to identify the entities that benefit from the operation of those units and allocate costs directly to them," the commission explained in a statement. The decision does not direct any refunds at this time. Instead, FERC said it will address any refund requirements in a future order addressing MISO's new study methodology.
We Energies has reached a deal to sell the Presque Isle facility, and has asked Cliffs Natural Resources, a mine operator, to guarantee it will not take electric service elsewhere before the transaction is complete. To keep the lights on, the MISO required the company to keep generating power from the 431-MW facility, with almost $100 million in costs allocated to ratepayers.
