R Street Institute Joint Regulatory Comments on The Midcontinent Independent System Operator’s Multi-Value Project framework

UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION

JOINT COMMENTS OF THE R STREET INSTITUTE AND THE NISKANEN CENTER

I. Introduction

The R Street Institute (RSI) and the Niskanen Center (Niskanen) join consumer groups in supporting independent, forward-looking transmission planning that “maximizes economic, reliability and resilience benefits less the investment cost.”^[1] The Midcontinent Independent System Operator’s (MISO’s) Multi-Value Project (MVP) framework exemplifies the kind of forward-looking, multi-benefit, regional planning process that we have long advocated.^[2] The complaint at hand presents itself as seeking correction to substantive errors made by MISO during stakeholder processes.^[3] Experts may reasonably differ over inputs or modeling choices, and indeed the intended purpose of an extensive stakeholder process is to foreground and assess such differences. The Complaint attempts to substitute its preferred positions for the outcomes of MISO’s transmission planning process as set out in its FERC-approved tariff and in MISO’s Business Practices Manual. That the complainants failed to secure agreement for their positions in the stakeholder process does not amount to a tariff violation. The Commission should deny the complaint.

While the complainants do not put forth a case for which the Commission can find a tariff violation, they nevertheless raise issues that should be explored by the Commission in other dockets, namely a reinvigorated Docket No. AD22-8-000, focused on economic discipline in transmission, and transmission regulation, competition, benefits methods, transparency, and independent expertise. Our point in providing these comments is procedural, not substantive: when reasonable experts disagree, the Commission should defer to the tariffed stakeholder process, reserving modeling refinements for prospective compliance dockets.

II. Interest and Perspectives of Joint Commenters

RSI’s mission is to promote free markets and limited, effective government through nonpartisan public policy research and outreach. We support consumer-focused, holistic, long-term transmission planning that maximizes net benefits as a way to bring about efficient wholesale electricity markets and to overcome inherent shortcomings of the economic regulation of state-granted monopolies.

Niskanen is a nonpartisan think tank and public policy organization dedicated to promoting robust markets and evidence-based policy. Our mission centers on advancing both an effective public sector and a competitive private sector to modernize the electric grid and expanding transmission infrastructure to meet the nation’s growing electricity needs.

III. The Benefit of Multi-Value Regional Transmission Planning Processes

Efficient and effective long-term planning of regional transmission requires robust and holistic benefit and cost measurements. Every significant rate-based transmission project should be assessed as a multi-value project, “otherwise, analyses will be biased, planning will be fragmented and transmission spending will be wasted.”^[4] In order to maximize net benefits for consumers, regional transmission planning must include “proactive and holistic benefits accounting that de-silos economic and reliability projects,” which is exactly what MISO’s MVP framework is intended to represent.^[5] The complaint at hand argues that MISO violated its tariff in creating and approving Tranche 2.1 by “develop[ing] and rel[ying] upon unreasonable benefit metrics.”^[6] While other parties are better placed to provide the Commission legal arguments as to what, as a threshold issue, Section 206 of the Federal Power Act requires in making such an assertion, the comments below provide the Commission a perspective on why the benefit metrics, in aggregate, are not unreasonable, particularly in light of the alternative evidence upon which the complaint depends. Furthermore, in advancing its erroneous assertion that the benefits metrics MISO used were “unreasonable,” the Complaint also seeks relief that places the Commission in a position to affirmatively approve future regionally-planned transmission projects.

As such, these comments explain why creating such a regime is misplaced and imprudent, whether determined in this docket or another. Nonetheless, transparency, accountability and affordability with respect to transmission are legitimate consumer concerns. However, as opposed to the one-off relief sought in the Complaint, the Commission should look to more holistic and engaged forums to explore these issues and find durable solutions based on the evidence and perspectives provided by the entire industry. In fact, the Commission has open dockets full of evidence in this regard that can help in addressing consumers’ concerns.^[7]

IV. History and Context

FERC has previously determined that given the likelihood of substantial future transmission investment, more efficient and cost-effective regional transmission planning, rather than utility-by-utility or state-by-state processes, is necessary.^[8] When done well, long-range transmission planning is beneficial to consumers. Essentially, proactive, economic transmission planning benefits consumers by avoiding more expensive alternative investments, which are either largely reactive investments or utility-driven and balkanized transmission, or by facilitating access to benefits, like lower cost generation, limited by current transmission constraints. The benefits of regional, prospective transmission planning and projects cannot be captured by utility or state-specific planning processes overseen exclusively by PUCs.

With respect to the MISO projects which are the subject of the Complaint, in December 2024, MISO’s Board of Directors approved a $22 billion portfolio of 24 high-voltage transmission projects across the Midwest, designated as Long-Range Transmission Planning (LRTP) Tranche 2.1 and classified as MVPs under Attachment FF of MISO’s tariff.^[9] This approval was the product of MISO’s tariffed transmission expansion planning process (MTEP), which requires long-term modeling, scenario analysis, and extensive stakeholder engagement.^[10] 

To develop Tranche 2.1, MISO primarily used “Future 2A,” a long-term planning scenario reflecting load growth, retirements of existing generation, and assumed additions of generation resources, with the majority of assumed additions resulting from state and utility plans.^[11] MISO evaluated the proposed projects against tariff-defined benefit categories, including mitigation of reliability issues, avoided capacity costs, and decarbonization to conclude a benefit-to-cost ratio between 1.8 and 3.5 over a twenty-year horizon.^[12] Stakeholders, including state commissions and the MISO Independent Market Monitor (IMM), participated in the planning process and raised questions about certain modeling assumptions.^[13] After considering the record of the stakeholder process, the MISO Board approved Tranche 2.1 on December 12, 2024.^[14]

MISO’s transmission planning procedures are governed by a comprehensive regulatory framework established under the Commission’s oversight pursuant to the Federal Power Act and implementing regulations.^[15] The MVP process is specifically codified in MISO Business Practices Manual BPM-020, with detailed cost allocation procedures established in MISO Tariff Attachment FF.^[16] These procedures implement FERC’s transmission planning requirements under Order Nos. 890 and 1000, and largely comply with the recently enacted Order No. 1920, all of which mandate coordinated, transparent, and stakeholder-inclusive transmission planning processes.^[17]

The MVP planning process itself operates within MISO’s broader LRTP framework, which is designed to develop regional transmission solutions that enhance grid reliability and efficiency while positioning the system to meet future resource developments over a 20-year planning horizon.^[18] The planning framework explicitly incorporates utility and state goals and policies, projected conditions, and industry trends, ensuring that regional planning reflects diverse stakeholder input and policy objectives across MISO’s footprint.^[19] The LRTP process is structured in sequential “tranches” to manage the scale and complexity of regional needs, with each tranche building upon prior phases while addressing evolving system requirements.^[20]

With Tranche 2.1, MISO implemented its FERC-approved transmission planning procedures as codified in BPM-020, Section 7.5 and Tariff Attachment FF.^[21] The Tranche 2.1 process was conducted within MISO’s established LRTP framework, which had previously received the Commission’s approval and had been successfully implemented in Tranche 1.^[22] 

Consistent with FERC’s Order No. 890 requirements for coordination, openness, transparency, information exchange, comparability, and dispute resolution, MISO’s procedures mandate extensive stakeholder engagement throughout the transmission planning process.^[23] MISO’s MTEP process requires that projects be “vetted through an 18-month process with more than 75 stakeholder meetings, including a series of public Subregional Planning Meetings (SPM) for each MISO subregion and additional Technical Task Force (TSTF) meetings.”^[24] For MVPs, this engagement requirement is enhanced given their regional scope, multi-billion dollar cost implications, and cross-jurisdictional impact.^[25]

The procedural requirements include mandatory participation in substantive stakeholder forums such as subregional planning meetings, technical study task forces, technical study review groups, and equivalent stakeholder forums during the MTEP planning process pursuant to the Commission’s Order 890 requirements detailed in Attachment FF of the MISO tariff.^[26] These meetings allow for stakeholder input on project alternatives, cost-benefit analysis, and collaborative development of regional solutions.^[27] The Commission has consistently emphasized that stakeholder participation must be meaningful and allow for genuine influence on planning outcomes.^[28]

Here, MISO “followed an extensive stakeholder process, facilitating more than 300 meetings and capturing feedback to arrive at a robust Tranche 2.1 portfolio.”^[29] This represents a 400% excess over the standard minimum requirement of 75 meetings, demonstrating MISO’s commitment to stakeholder engagement.^[30] The stakeholder process commenced about two years before final board approval, with MISO dedicating substantial organizational resources, including “more than 40,000 hours of labor from MISO staff, more than 300 meetings, and numerous discussions with stakeholders.”^[31] 

MISO provided specific, structured opportunities for stakeholder feedback on portfolio alternatives and project configurations, including the March 15, 2024 Long Range Transmission Planning Workshop, where “MISO shared the Tranche 2 anticipated portfolio” and requested feedback with a formal comment deadline of April 5, 2024.^[32] Multiple rounds of such feedback opportunities were provided throughout the process, allowing stakeholders to influence project development at key decision points and ensuring meaningful participation.^[33]

V. OMS Process

Most important for regional cost allocation decisions, the Organization of MISO States (OMS) possesses veto authority over regionally cost-allocated transmission projects if conditions are not met.^[34] Under MISO’s Transmission Planning business practice manual, OMS could ask MISO to reconsider the MVP Tranche 2.1.^[35] This veto authority is a substantial procedural safeguard designed to protect state interests in regional cost allocation decisions and ensure that regionally cost-allocated projects have broad state support.

The OMS veto process requires that the organization “actively participated in the planning process for the MTEP cycle or portfolio planning cycle in question” and that specific procedural conditions are satisfied before veto authority may be exercised.^[36] These conditions include requirements that projects were properly vetted within appropriate planning stakeholder groups and that proper notice and engagement procedures were followed.^[37] The availability of this veto mechanism provides states with direct recourse when they believe transmission projects do not meet cost-effectiveness criteria or proper procedural requirements.

Here, the complainants provide no arguments or evidence that MISO failed to give the OMS a full opportunity to exercise its veto authority, which OMS chose not to utilize. The complainants seemingly actively participated in OMS deliberations and could have sought to block the projects through this established mechanism designed to protect state interests in regional cost allocation decisions. Their decision not to pursue this available procedural avenue, followed by a post-approval Complaint challenging the same substantive issues they could have raised through the veto process, demonstrates that the procedural safeguards functioned as designed but were simply not utilized.

VI. Additional Comments on the Complaint

Reasonable Minds May Differ, But Disagreement over Details Does Not Equate to a Tariff Violation

As explained below, nothing in the Complaint or its supporting evidence indicates MISO violated its tariff or that its process was not done well. Instead, in seeking to upend the MISO process and related Tranche 2.1 projects, the complainants put forth evidence from their preferred experts — Dr. Hogan and the MISO IMM — that they argue should be substituted for the work of MISO’s staff experts, which the MISO Board judged and largely used in approving the projects. Long-range transmission benefit calculations are not easy. As Dr. Hogan’s testimony notes, “Forward-looking evaluation of electricity system investments faces substantial uncertainty about the long-term future.”^[38] As such, reasonable disagreement over benefit categories and calculations should be expected. The purpose of enabling an extensive stakeholder process is to foreground and assess such differences.

The MISO IMM and Dr. Hogan raise some substantive points worthy of consideration in the planning process, but the effects of their points are overstated. For instance, both the MISO IMM and Dr. Hogan assert there are zero or de minimis Mitigation of Reliability Issues and Avoided Capacity Costs gross benefits that would likely result from Tranche 2.1. These assertions are incorrect and inconsistent with experiences elsewhere. For instance, PJM states have raised significant concerns with the billions-of-dollars of cost and lack of transparency of near-term regionally planned transmission projects in that region to address reliability issues.^[39] At a minimum, transmission planned through the Tranche 2.1 process avoids these expensive and controversial near-term planned transmission projects (which are not planned based using net benefit calculations), while also avoiding the cost and contention of getting transmission online earlier to mitigate reliability concerns.^[40] Some action, whether it is real-time operational changes, reliability-must-run contracts, load shedding, or transmission upgrades, is taken to avoid reliability concerns that impact the broader grid and retail consumers. Assuming the future mitigation actions are near-term regional transmission, Dr Hogan’s own testimony is instructive on this point, as he noted “all investments that are not sunk are avoidable and should be included in the forward-looking evaluation of costs and benefits of building and operating the system.”^[41] The cost of those future actions is difficult to calculate, reasonably requiring a proxy to determine the value of avoiding them in the years to come. While “more appropriate” ways to determine the value of avoiding these actions or otherwise mitigating reliability concerns are reasonably debatable, it is unreasonable to assert the benefit is “essentially zero.”^[42] 

Further, the Complaint (and Dr. Hogan and the MISO IMM) overlook areas of undercounted benefits. In particular, the Complaint discounts the impact increased load growth will have on benefit calculations. Late last year MISO noted it is updating its load-forecast methodology, and that the RTO is now expecting peak demand growth to double on a compound annual growth rate basis as compared to the methodology and forecast used in previous transmission planning futures scenarios.^[43] Given the backbone nature of Tranche 2.1’s projects, this transmission will be even more valuable if load growth exceeds the amount assumed in the planning phase. Furthermore, the Complaint glosses over the fact that the value used in determining the benefit of Mitigation of Reliability Issues is significantly less than the MISO IMM’s own calculations of value derived from the region’s customers from avoiding load shedding that the transmission is intended to mitigate.^[44] 

Additionally, the positions advocated in the Complaint and in Dr Hogan’s testimony have been raised by other stakeholders including MISO’s IMM throughout the development process.^[45] Far from being ignored, MISO’s Board was well-aware of the IMM’s thoughts, concerns and recommendations on Tranche 2.1, as well as MISO staff’s responses to his positions.^[46] 

The benefit categories MISO considered and applied in its benefit-cost calculations largely mirror those required by the Commission itself for long-term transmission planning in Order 1920, with the exception of decarbonization. As a number of states in MISO that will pay a significant amount of Tranche 2.1 costs value avoiding carbon emissions, these projects certainly provide them benefits in that regard.^[47] However, the benefit metric is unnecessarily controversial in this context because MISO stakeholders do not have a universal position on its value, nor is it central to just and reasonable rates under the Federal Power Act. As such, we suggest MISO continue evaluating it for at least informational purposes. The core benefits under the Federal Power Act and every retail jurisdiction in MISO are those affecting costs and reliability. To the extent some consider decarbonization a benefit for reducing generation costs under a carbon-constrained public policy scenario, it is best considered as a type of economic benefit (e.g., environmental policy compliance) to avoid confusion with a social cost measure. Finally, ignoring the decarbonization value entirely would still result in Tranche 2.1 showing substantially positive benefits net of cost.

Taking the Complaint’s Concerns at Face Value Does Not Support the Relief Requested. Instead, The Concerns Underscore the Importance of Transparency and Independence in Transmission Planning

Assuming arguendo, the Complaint and its evidence raise substantive questions with MISO Staff’s methodology, benefits metrics or calculations, that are worthy for consideration in transmission planning, it does so without acknowledging that every planning exercise involves trade-offs between perfection and pragmatism. Indeed, in lieu of explaining why MISO’s methodology may be objectively wrong, Dr. Hogan’s testimony focuses on his preferred processes, explaining what his “preferred approach” would include, and detailing what he believes a “more appropriate cost-benefit calculation” to MISO’s would include.^[48] Given the degree to which the issues included in the Complaint were considered in the stakeholder process and choices were made by the MISO Board on how to address these issues, absent clear tariff violations, those decisions should prevail. Insofar as the complainants believe benefit calculation approaches advanced by Dr. Hogan’s testimony should be used by MISO, they should advocate their use on a prospective basis for future long-term planning processes.

While experts have a wide range of views on proper transmission planning, those expert disagreements are inevitable in this field, such that if the Commission granted the requested relief it would invite constant complaints to adjudicate regional transmission planning. This would result in additional administrative costs and delay transmission expansion by at least two years. Transmission development already takes over 10 years on average, which is poorly suited to an era of resurgent load growth.^[49] Thus, the substantial costs of additional processes would need to carry considerable benefits to improve outcomes, and that would require the Commission to be equipped to do robust reviews.

The relief in the Complaint would set precedent for the Commission to review regional transmission plans and determine their prudence. This requires highly specialized expertise in transmission planning parameters and benefits methodologies. The Commission currently does not possess sufficient expertise to review a single RTO transmission plan, much less deal with a new precedent of regularly reviewing regional transmission plans nationwide. Doing so would require at least a new division of highly specialized personnel. Additionally, any incremental friction in regional transmission planning necessarily incentivizes alternative transmission-owner initiated transmission development, which largely occurs outside of processes dictated by economic testing, decreasing the efficiency of transmission investments and driving down the net benefits of the resulting infrastructure.  

Furthermore, the relief sought may set national precedent contrary to states’ interests. Currently, the Commission delegates the implementation of ex ante transmission planning to state and regional stakeholders. The relief sought would validate a stronger role for federal authority in ex ante transmission planning, which could diminish the authority of state and regional stakeholders in making both transmission and generation decisions—a result contrary even to the argument of the complainants. The precedent set by this raises large unintended federalist concerns. Since most affected states are not parties on this record, the Complaint is the wrong vehicle to consider a major expansion of federal authority.

Furthermore, post hoc complaints of this nature set a terrible precedent for bad actors in the space, particularly ones negatively affected by the consumer benefits of transmission planning. Inviting after-the-fact litigation of every planning decision diminishes the incentives for parties to be involved in a robust, up-front process, and undermines Commission rules requiring those robust processes. Additionally, encouraging these types of cases further incentives RTOs to implement superficial stakeholder involved processes altogether. If after-the-fact litigation of every decision is expected, it would be no surprise if RTOs like MISO skip the lumbering, multi-year processes like those that led to Tranche 2.1 and move directly to the regulatory hearings.  

Nevertheless, the Complaint underscores a valid concern: there is a lack of independent expertise contributing to the development and review of regional transmission expansion planning. Consumer groups, including in reports and convenings hosted by the R Street Institute, have routinely raised these governance-related concerns.^[50] This is a concern in RTO footprints, but a far greater concern outside of RTOs. This is why consumer groups have pushed for the creation of an independent transmission monitor outside of RTOs, while seeking options to enhance the role of independent transmission expertise inside RTOs.^[51] 

VII. Independence in Transmission Planning

As the Commission is well-aware and as discussed above, Potomac Economics, MISO’s IMM, raised substantive concerns about MISO’s modeling assumptions and cost-benefit analyses during the Tranche 2.1 planning process—concerns that initially were ignored by MISO.^[52] Following a number of exchanges, including a proceeding before the Commission, FERC provided clarification of the IMM’s role in transmission planning oversight, stating that MISO is obligated to consider and respond to the IMM’s oversight consistent with its tariff and governance framework.^[53] Meanwhile, MISO has addressed the IMM’s comments and concerns publicly and before the MISO Board.^[54] 

However, the Complaint at hand demonstrates that the IMM, as currently staffed and with its current scope of work, is not well placed to provide the information and analysis consumers demand in terms of transmission transparency. The IMM does not have transmission planning expertise, and admittedly only looks at how transmission planning affects organized markets, not the full net benefits of transmission expansion. This is unsurprising, as the role of the IMM per Order No. 719 is to monitor and mitigate market power in energy, ancillary service, and capacity markets.^[55] This is distinct from the role consumers and other parties have advanced for an independent transmission monitor (ITM).^[56] The role of the IMM with respect to transmission planning remains unclear. Stakeholders remain divided on the scope or application of an ITM, including whether an ITM in RTOs should be the IMM, or a separate entity.

Mechanisms to improve the role of independent expertise in transmission planning warrants serious attention from the Commission, but granting the relief sought in this Complaint is not the correct answer. Instead, the Commission should prioritize this issue through other means, including open Commission dockets, such as the one focused on transmission cost containment.^[57] If consumer concerns with transmission planning inputs and transparency, never mind costs, are important to the Commission, one idea is to consider hosting a technical conference on the institutional design of regional transmission planning, or prompt an inquiry on updating Order No. 719 to modernize the role of IMMs. These considerations may dovetail well with Order No. 1920 compliance plans.

VIII. Conclusion

The Commission should summarily deny this Complaint. The complainants do not provide sufficient evidence or arguments that MISO violated its tariff. However, legitimate consumer concerns regarding transmission planning and cost containment should be addressed holistically in other dockets.

Respectfully submitted,

/s/ Kent A Chandler

Kent A. Chandler
Resident Senior Fellow, Energy and Environmental Policy
R Street Institute
1411 K Street N.W., Suite 900
Washington, D.C. 20005
(202) 525-5717
kchandler@rstreet.org

/s/ Liza Reed

Liza Reed
Director, Climate and Energy Policy
Niskanen Center
1201 New York Ave NW, Suite 200B
Washington, DC 20005
(202) 221-8978
lreed@niskanencenter.org

September 9, 2025

See the original comments below: