UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION Midcontinent Independent ) Docket No. ER14-2860-000 System Operator, Inc. ) Docket No. ER14-2862-000 ) (not consolidated) MOTION FOR LEAVE TO ANSWER AND ANSWER TO CITATION OF SECOND SUPPLEMETNAL AUTHORITY OF THE MIDCONTINENT INDEPENDENT SYSTEM OPERATOR, INC. Pursuant to Rules 212 and 213 of the regulations of the Federal Energy Regulatory Commission ( FERC or Commission ), 18 C.F.R. 385.212 and 385.213 (2014), the Midcontinent Independent System Operator, Inc. ( MISO ) respectfully submits this Motion for Leave to Answer and Answer to respond to the Citation of Second Supplemental Authority filed by the City of Mackinac Island ( City ) on January 13, 2015 in the above-captioned dockets. By responding to the matters raised by the City, MISO s Answer will clarify the issues under consideration and will assist the Commission in its decision-making process. In the event that the Commission accepts the City s Citation of Second Supplemental Authority, MISO respectfully requests that the Commission accept MISO s Answer. 1 I. BACKGROUND On September 12, 2014, MISO submitted a System Support Resource ( SSR ) filing in Docket ER14-2860-000 containing an SSR Agreement between MISO and the Wisconsin Electric Power Company ( Wisconsin Electric ) covering Units 5-9 at the Presque Isle power 1 Capitalized terms not otherwise defined herein have the meanings ascribed thereto in MISO s Tariff.
plant ( PIPP ). Contemporaneously, MISO filed a Tariff Schedule 43G in Docket ER14-2862- 000 that specified the manner in which the costs associated with PIPP would be recovered. The PIPP SSR Agreement covers the period from October 15, 2014 through December 31, 2015. The City and other parties filed pleadings in these dockets, including requests for rehearing to the Commission s Order dated November 10, 2014. 2 The City filed its Request for Rehearing on December 10, 2014. In its Citation of Second Supplemental Authority, the City argues that MISO... failed to follow its [T]ariff 3 because Wisconsin Electric... has not made a definitive decision to retire the Presque Isle Power Plant ( PIPP ) and, therefore, is not entitled to an SSR Agreement. 4 The City misconstrues both the support submitted by MISO in the initial filing as well as the SSR provisions contained in MISO s Tariff. II. MOTION FOR LEAVE TO FILE ANSWER Under Rule 213(a)(3) of the Commission s Rules of Practice and Procedure, answers may be made to any pleading to the extent that the answer is not prohibited by Rule 213(a)(2). 5 Rule 213(a)(2) does not mention a citation of supplemental authority, which is the characterization provided by the City for the pleading it submitted on January 13, 2015. However, to the extent that the Commission determines that the City s pleading falls under Rule 213(a)(2), the Commission has waived this rule where an otherwise prohibited answer would clarify the issues under consideration, ensure completeness of the record, or assist the Commission in its decision-making. 6 MISO s Answer provides a concise response to the 2 3 4 5 6 Midcontinent Indep. Sys. Operator, Inc., 149 FERC 61,114 (November 10, 2014). City Citation of Second Supplemental Authority at 1 (January 13, 2015). Id. See 18 C.F.R. 385.213(a)(2) & ((3) (2014). See, e.g., Southwest Power Pool, Inc., 143 FERC 61,018, at P 15 (2013) (accepting answer that assisted in the decision-making process); NV Energy Operating Companies, 142 FERC 61,166, at P 38 (2013) (accepting answer that assisted in the decision-making process); Texas Eastern Transmission, LP, 122 FERC 61,205, at P 8 (2008) (accepting answer that (Continued ) 2
concerns raised by the City that will clarify the issues under consideration, correct certain material misstatements, and assist the Commission with its decision-making in the abovecaptioned dockets. Accordingly, Rule 213(a)(2) should be waived in the instant cases for good cause shown. III. ANSWER The City essentially makes two arguments in its supplemental filing to the effect that MISO failed to follow its Tariff when it made its filing in the instant dockets. Quoting MISO s Tariff regarding SSR Unit Notification Procedures, the City seeks to support its arguments that 1) Wisconsin Electric s decision to Retire PIPP was not definitive at the time of submittal of the Attachment Y Notice and that 2) such a decision must remain so. 7 The City s supplemental filing fails in both its arguments. MISO followed its Tariff. The City states that the direct testimony of Wisconsin Electric s Mary L. Wolter, submitted with MISO s initial filing clearly indicates that a definitive decision has not been made concerning retirement of the PIPP. 8 The City quotes only a small portion of page 10 in Ms. Wolter s testimony, and thereby reverses the meaning of that testimony. The entirety of the question and answer in Ms. Wolter s testimony states as follows (City s excerpt emphasized): 9 Q. Does this include all inventories on-site at PIPP? A. Yes, it does. In the initial suspension SSR Agreement we excluded approximately 90% of M&S inventory specific to PIPP that could not readily be used at other Wisconsin Electric generating units. It was believed that in the event of a suspension those M&S inventories would remain on site because they might be difficult or more costly to reacquire if/when the units are brought back (Continued ) 7 8 9 completed the record); California Independent System Operator Corp., 105 FERC 61,284, at P 10 (2003) (accepting answer that clarified the issues). City Citation of Second Supplemental Authority at 2, quote by the City from the MISO Tariff (City s emphasis removed). Id. MISO Transmittal Letter, Exhibit G (Testimony of Mary L. Wolter) at 10 (September 12, 2014) (City s excerpt from its Citation of Second Supplemental Authority, at 2, emphasized). 3
into service. In this retirement SSR Agreement, however, we assume that those inventories could be eliminated and the associated working capital requirements reduced if Wisconsin Electric were permitted to retire the units. Because MISO will not authorize retirement of the units, Wisconsin Electric must be compensated for having to continue to carry these inventory balances. The portion of the response quoted by the City (underlined in the quote above) refers to the initial SSR Agreement between MISO and Wisconsin Electric that responded to Wisconsin Electric s notification to MISO that it would suspend operations at PIPP. The entirety of Ms. Wolter s answer to the questions shows that she was contrasting that situation with the retirement decision that is the subject of the instant case. In stark contrast to the City s argument, Ms. Wolter s testimony supports Wisconsin Electric s position (stated in its notification to MISO) that it intended to retire the PIPP. The City s argument does not support a finding that MISO violated its Tariff. The City also considers only a portion of the Tariff language that it quotes regarding SSR Notification Procedures. The City attaches to its pleading a news item that carries a statement that an agreement in principle has been reached that includes, as a component, the continued operation of PIPP for a period without the need for a SSR Agreement. MISO s Tariff states that a decision to Retire or Suspend must be definitive at the time of submittal of the Attachment Y Notice, and remain so,... except as otherwise provided herein. 10 The City fails to recognize that the MISO Tariff provides for modification of an Attachment Y Notice after commencing a SSR Agreement. An owner or operator of an SSR Unit may rescind its decision to Suspend or to Retire in writing by notifying the Transmission Provider of the intention to do so.... 11 This Commission-approved Tariff provision contemplates a situation whereby an earlier decision to Retire a generating unit is later reversed during the course of a SSR 10 11 Tariff Section 38.2.7 ( SSR Unit Notification Procedures) (emphasis added). This portion of the Tariff is quoted by the City. City Citation of Second Supplemental Authority at 2. Tariff Section 38.2.7 ( Modification of an Attachment Y Notice ). A rescission can carry refund consequences. 4
Agreement. This is the situation that is apparently contemplated in the announcement carried in the new item that the City attached to its pleading. Again, the City s argument does not support a finding that MISO violated its Tariff. IV. CONCLUSION In the event that the Commission accepts the City s Citation of Second Supplemental Authority, MISO respectfully requests that the Commission accept this Answer because it responds to issues raised by the City by providing additional information that will assist the Commission in its decision making process. Respectfully submitted, /s/ Jeffrey L. Small Jeffrey L. Small Matthew R. Dorsett Midcontinent Independent System Operator, Inc. P.O. Box 4202 Carmel, Indiana 46082-4202 Telephone: (317) 249-5400 Facsimile: (317) 249-5912 jsmall@misoenergy.org mdorsett@misoenergy.org Counsel for Midcontinent Independent System Operator, Inc. Dated: January 23, 2015 5
CERTIFICATE OF SERVICE I hereby certify that I have this day e-served a copy of this document upon all parties listed on the official service list compiled by the Secretary in the above-captioned proceeding, in accordance with the requirements of Rule 2010 of the Commission s Rules of Practice and Procedure (18 C.F.R. 385.2012). Dated this 23rd day of January 2015 in Carmel, Indiana. /s/ Amy Jones Amy Jones