In December 2012, FERC issued an order approving the proposed MVP methodology as “an important step in facilitating investment in new transmission facilities to integrate large amounts of location-constrained resources, including renewable generation resources, to further support documented energy policy mandates or laws, reduce congestion and accommodate new or growing loads.”2 In upholding FERC’s approval of the MVP methodology, the court rejected arguments that FERC failed to identify objective benefits of the MVPs with sufficient specificity. The court noted the inherent difficulties in identifying benefits with precision, and did not require a specific quantification of those benefits before allocating the associated costs across the region.
MVPs are high-voltage projects that transmit energy over long distances. The court concluded that, unlike low-voltage lines that benefit only local areas, MVPs increase reliability for the entire regional grid, facilitate the flow of power to underserved areas and decrease reserve margin losses, thereby benefitting the entire region. The court also emphasized that MVPs would promote increased wind power, providing additional regional benefits in the form of increased energy independence and decreased carbon emissions.
Of particular importance, the court rejected an argument by the Michigan utilities and state commission that the MISO approach was at odds with the Michigan RPS, which credits only renewable energy that is generated in-state. The court held that “Michigan cannot, without violating the commerce clause of Article I of the Constitution, discriminate against out-of-state renewable energy.” The constitutionality of the Michigan RPS was not at issue in the appeal, and the court’s statement does not directly impact the validity of the Michigan RPS or any other state renewable mandate or target. However, given that almost every RPS in the country favors the in-state generation of renewable energy, the court’s statement will likely encourage legal challenges to the in-state requirements by the renewable industry.