MISO Proposes Short-Term Solution to Help Accelerate Generation Project Review Process | McCarter & English, LLP
Energy markets in the United States are experiencing rapid changes on both the demand and supply sides of the equation. While various drivers such as a resurgence in manufacturing, data center buildouts for cloud computing and artificial intelligence, and continued adoption of electric vehicles are lifting forecasts for electricity demand in the years to come, retirements of conventional coal power plants and transition towards intermittent wind and solar generation are introducing reliability concerns about that increased demand. Backlogs in permitting and interconnection queues are prolonging development timelines, creating resource adequacy risks. All of these factors are present in the Midcontinent Independent System Operator (MISO) region, which is projected to experience a 4.7 GW shortage by 2028 as a result of generator retirements, demand growth, and delayed development of new generation capacity.
MISO has been developing an interim measure to address the near-term resource adequacy and reliability needs of the region. MISO filed a proposal with the Federal Energy Regulatory Commission (FERC) on March 17, 2025, to establish the Expedited Resource Addition Study (ERAS) process to accelerate the study of generation projects. The filing, ER25-1674, includes the tariff authority and procedures to implement ERAS, including how to claim a new generator interconnection request meets an urgent resource adequacy or reliability need and how states or a Relevant Electric Retail Regulatory Authority (RERRA) can notify MISO of projects warranting ERAS review. MISO argues that the ERAS process responds to the authority of state regulators and their jurisdictional utilities to plan for resource adequacy needs, which is recognized by the Federal Power Act and FERC precedent. MISO requested that FERC approve the filing with an effective date of May 17, 2025, to enable MISO to implement the ERAS second quarter study process on June 2, 2025.
Other recent submittals by MISO to improve the Generation Interconnection Process included implementing a proposed cap in the queue, increased milestone payments, withdrawal penalty requirements, and Site Control rules. While these improvements are focused on long-term improvements in the queue, ERAS is focused on short-term improvements to address the current constraints in MISO’s queue and expedite development of urgently needed generation. ERAS will also provide flexibility so that retail choice jurisdictions in Illinois and Michigan can participate.
ERAS will be a separate process from the standard Generator Interconnection Queue, and will entail the study of projects each quarter, granting an Expedited Generation Interconnection Agreement within 90 days. Applications will require a $100,000 non-refundable deposit and $24,000/MW milestone payment, along with other stringent requirements. Eligible projects include those submitted by Load Serving Entities that need to be commercially operable within 3-6 years. Projects must demonstrate 100% Site Control for the generator and point of interconnection, meet capacity resource requirements, and have the appropriate RERRA verify that the project will meet a resource adequacy or reliability need. Existing projects in the queue will be eligible for transfer to ERAS with consideration given to both the project’s needs and the potential impact on the queue.
MISO states that its ERAS proposal incorporates feedback it received from various stakeholder meetings over the past several months. Additionally, MISO states that it has taken steps to mitigate the impact of these proposed changes on costs of other projects in its interconnection queue, and is striving to reduce the timeline of the queue to one year.
FERC has directed that any person desiring to intervene in this proceeding or to protest the filing must file by April 7, 2025.
* Ryan Madsen, a law clerk at McCarter & English not yet admitted to the bar, contributed to this alert.
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