[00:00:01] Speaker 00:
Base number 20-1465 et al, LSP transmission holdings to LLC et al petitioners versus Federal Energy Regulatory Commission.

[00:00:11] Speaker 00:
Mr. Fallon for the petitioners, Ms.

[00:00:13] Speaker 00:
Chu for the respondents, Ms.

[00:00:14] Speaker 00:
Valley for the interveners.

[00:00:17] Speaker 02:
Council for petitioners, please proceed.

[00:00:19] Speaker 01:
Thank you, Your Honor.

[00:00:20] Speaker 01:
In the orders under review, the Federal Energy Regulatory Commission violated the bedrock rate-making principle of cost causation,

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By doing so, FERC foreclosed competition for certain regionally beneficial projects between 100 and 229 KV.

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Because if the commission would have applied this bedrock rate-making principle, cost causation, matching the benefits of the project to who's paying the cost, these projects could and likely would have been competed.

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Petitioners asked that the court remand the orders under review for FERC to determine

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whether the just a reasonable rate for a market efficiency project in MISO should be between 100 and 229 KV.

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Now, petitioners in this case had a very easy ask.

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We simply ask, please don't foreclose us from competing from certain projects, for competing for certain projects, 100 to 229 KV projects that were economic, that would have to be economic.

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We weren't asking.

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There was really no harm from our ask.

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We weren't asking that these projects automatically be market efficiency projects.

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Those projects would still have to meet the 1 to 25 benefit to cost ratio.

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Moreover, in order to be competed, those projects would still have to show that more than one zone in MISO benefited from the project, the zone where the project is physically located and one other zone.

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And, and I think this is important.

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This is a very important case.

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Very important fact.

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There are no rate feasibility.

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When we asked FERC and MISO to calculate the benefits, that wasn't some Herculean ass that the petitioners were asking.

[00:02:15] Speaker 01:
There are no rate feasibility concerns that have been raised in this case.

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Certainly FERC didn't say any.

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And the reason why they didn't

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is because they'll know the zones that benefit from the project by the analysis that they do to determine whether the project is economic.

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And I would direct the court's attention generally.

[00:02:40] Speaker 07:
Would you say no rate feasibility concerns?

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You mean there's no difficulty calculating for the benefits?

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That's what you mean by rate feasibility?

[00:02:48] Speaker 01:
Yes, Your Honor.

[00:02:48] Speaker 01:
Yes, Your Honor.

[00:02:49] Speaker 01:
Yes, thank you.

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And so I direct the court generally to JA 866 to 872, which has a very good discussion of the MISO planning process, specifically as it relates to congestion.

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And in 870, the MISO over five planning cycles identified 15 projects that were quote unquote economic.

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And now I would direct the court to JA309.

[00:03:20] Speaker 07:
And you mean by, sorry, I'm just, I'm having, there's a lot of words in these cases, by economic you mean?

[00:03:24] Speaker 01:
I mean that they need the one to 25 benefit to cost ratio.

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Okay.

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That they have showed that the benefits of the project are 25% greater than the cost.

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Okay.

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All right.

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That's good.

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And so if you look at JA309, the MISO has a project.

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They have a project

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They have benefit metrics.

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We've been talking about three of them in this case.

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They have benefit metrics.

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They apply the benefit metrics to the project.

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They look at the benefits by zone.

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They add up the benefits by zone.

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And if the benefits are more than one to 25,

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the benefits of the project are 25% greater than the cost, then the quote, the project is quote unquote economic.

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So in doing that analysis, they know the zones that benefit.

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And the reason why we're sitting here in front of you all today is because the FERC ignored that for purposes of cost allocation and ultimately for competing these projects.

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because FERC rejected our very simple ask.

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FERC said, we're not going to let you compete.

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We're not going to let you compete.

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You didn't show that 345 kV and the existing 345 kV and below kV threshold is unjust and unreasonable.

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We're not going to let you compete.

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So we're going to keep these projects in the other project bucket.

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We're going to keep them there.

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And because the projects are in the quote unquote other project bucket, the costs are automatically allocated to the zone where the project is physically located.

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And so these projects, they're not going to be competed even though they know the beneficiaries or can easily determine the beneficiaries.

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Again, your honor, there's no rate feasibility concern to the inability to calculate

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the benefits and were one point Mr found that when they were they to do that over this category of projects in general, they might discern some non pricing zone effects, but they're willing to say that in the aggregate on balance, not enough to impugn the category.

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And so they, they think that this is actually an appropriate treatment of the category of

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projects.

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Well, Your Honor, I think they, what we're saying is, is that they know the beneficiaries.

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They know the beneficiaries.

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What they do is they put it in the category and they never apply the beneficiaries.

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And Your Honor, if they did say that, well, there's just maybe a few or whatever, that's belied by the record in the case below concerning

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things like the Northern Indiana case and the like, and the fact that most congestion in the MISO is between 100 and 229 kV and the like.

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So if the FERC is saying that, that's sort of belied by the record.

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Is that responsive to your question, Your Honor?

[00:06:59] Speaker 03:
I'm not sure it is, but go ahead.

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So FERC also said,

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also said, look, even for the projects we're going to let you compete, the 230 and KV above, we're gonna let you compete on those projects.

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We're not gonna let you compete if there's a quote unquote immediate need.

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And if you look again at JA 870, in JA 870, there's been 15 of these projects, six of which were 230 KV and above.

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So there's been approximately one per cycle.

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The MISO said at JA 320 that approximately one project each cycle will be part of this exemption.

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And so even for the projects that they did allow us to compete on, the immediate need exception they granted would foreclose likely that project.

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We believe there's likely an 85% chance because most projects are needed within three years or less.

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an 85% chance that the project won't be competing.

[00:08:09] Speaker 07:
Even for the ones that- This is what's so, where is your evidence that within MISO that 85% of these immediate need, these projects which you could compete will be treated as immediate need?

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Because that seems to be pretty critical to your attack.

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It was in our brief, Your Honor, that we analyzed.

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I think we got those figures, Your Honor, from the MISO and their analysis.

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I mean, I think that's their figures and it's cited in our brief.

[00:08:53] Speaker 07:
Okay, so that 85% of all the projects, these market efficiency projects will be subject to the immediate need exception.

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85%, your honor, I think the figure is 85% of all projects.

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And that was one of their debates is that we had the wrong sort of, we were mixing apples and oranges.

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But I think our view is 85% of the time the project would be needed, quote unquote, needed within three years.

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And so if that project is bundled with a market efficiency project, then

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the project will more than likely.

[00:09:32] Speaker 07:
Sorry, when you say when you say what's needed, you're talking like a baseline reliability project that's going to be needed within three years.

[00:09:38] Speaker 07:
And so and then when they it ends up having the other criteria that qualify it as a market efficiency project.

[00:09:45] Speaker 01:
No, this would be generally a project.

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And I don't think we were talking here about baseline reliability projects.

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We were talking generally about projects that are solving a reliability violation.

[00:09:58] Speaker 07:
Well, that's what I'm trying to figure out is just, and so whether it's other projects category or baseline reliability, they're all, is your point that, or I guess, where is the evidence?

[00:10:09] Speaker 07:
It would make sense to me that reliability projects are something that we want to have addressed quickly.

[00:10:14] Speaker 07:
And so the extent market efficiency projects are covering those then, but I just, I don't know that information.

[00:10:24] Speaker 07:
And I was, you know, I can't,

[00:10:28] Speaker 07:
I have to give for some credit saying that you weren't quite, you weren't showing or you hadn't shown, and maybe you're telling me while I'm wrong about this, that 85% of reliability projects in MISO have to be, are supposed to be done within three years.

[00:10:47] Speaker 01:
Well, what they look at is a very conservative planning model that the project is quote unquote needed

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within three years, even though I think we've said that the project won't be built more than likely within three years.

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And so they'll use other techniques to the end service date for these projects would be more than three years.

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And so they're using a very conservative planning model.

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So it's not surprising that based on their very conservative planning model, 80 percent of the five percent of the projects are, quote unquote, needed within three years.

[00:11:26] Speaker 03:
Can I just back up and ask you about standing and whether you've identified any project under the MISO tariff that you would compete for if the KV threshold were lower but are barred from because MISO stopped at 230 KV rather than going to the 100 KV that you prefer?

[00:11:46] Speaker 01:
Well, Your Honor, there have been from the 2018 market transmission efficiency plan, the MISO plan, there were two projects.

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that could have been competed, but they weren't because of the 100 to 229 KV threshold.

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And where did you identify that those were projects that your clients would bid on?

[00:12:12] Speaker 01:
Your Honor, my client would bid on a project if it has the opportunity.

[00:12:17] Speaker 03:
Where in the record does your client say we would bid on this project or all projects like it?

[00:12:26] Speaker 03:
No declaration?

[00:12:28] Speaker 01:
No, Your Honor, there wasn't a declaration.

[00:12:31] Speaker 03:
I cut you off.

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You started to say my client would bid on all.

[00:12:35] Speaker 01:
My client would bid on, my client would, given the opportunity to compete, my client would bid on projects, would bid on projects with the opportunity to compete.

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And that's why I think our, but you're right, Your Honor, there was no declaration, but our client has won one of these competitive solicitations

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before has competed and won therefore for those things.

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We would more than likely compete on these projects in the future.

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We don't have the right.

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They immediately have stopped us from competing for these projects.

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And that's why we go back and look at the Shirley case, which is what was cited by the FERC, or I'm sorry, the MISO in their brief.

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And the court said there,

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We see no reason anyone competing for a government benefit should not be able to assert competitor standing when the government takes a step that benefits his rival and therefore injures him economically.

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That's exactly what happened in this case, Your Honor.

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They took projects between 100 and 229 KV and they're handing those projects to our competitors, or the incumbent transmission owners to build these projects.

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And so they're doing that

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They're going to do that.

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They're handing our competitors and frustrating our ability to keep these projects.

[00:13:59] Speaker 07:
Would you have been able to identify a specific project within 60 days of when the commission issued its decision?

[00:14:08] Speaker 01:
I'm sorry, you're right.

[00:14:08] Speaker 07:
I didn't hear that question.

[00:14:10] Speaker 07:
So you had to file within 60 days of the commission's decision, right?

[00:14:14] Speaker 01:
Yes.

[00:14:14] Speaker 07:
And would that have been enough time to identify specific projects as to which you would be harmed by the rule?

[00:14:22] Speaker 07:
Well, certainly the there's a categorical rule that that's your argument.

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It's like we're categorically walled off here.

[00:14:29] Speaker 07:
But would it would you even have been able to identify something that quickly or is it the nature of categorical rules you can?

[00:14:36] Speaker 01:
Well, I think.

[00:14:39] Speaker 01:
I mean, obviously, the MISO is going through its planning process now, the projects that have already happened.

[00:14:46] Speaker 01:
It's really too late in that process.

[00:14:48] Speaker 01:
I mean, I think the idea that

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You know, we would wait and somehow file a complaint if we have benefits and this kind of discussion.

[00:14:59] Speaker 01:
I don't think that works because in the meantime, while the FIR process, the appellate process is going on, the projects are moving forward.

[00:15:09] Speaker 01:
I don't really know, Your Honor, within that 60-day window if we could have identified a couple of projects in the, or a project in the most recent transmission planning

[00:15:21] Speaker 01:
program that was going through.

[00:15:22] Speaker 01:
I really don't know if that was the case.

[00:15:25] Speaker 07:
I'm just trying to figure out how this even works.

[00:15:30] Speaker 07:
So someone submits a project to MISO.

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We want to build this.

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We think it's immediate need.

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Or we think it qualifies as market efficiency projects.

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And we want to build a project either that's going to be under 230 volts or it's an immediate need one.

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And you want to compete.

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What time window do you have to say, and then FERC at some point must say,

[00:16:05] Speaker 07:
you can treat it that way.

[00:16:06] Speaker 07:
It qualifies for that treatment.

[00:16:08] Speaker 07:
When is the time window when you could come in and say, hang on, hang on, we should be able to compete for that project?

[00:16:15] Speaker 01:
I just don't know how the process works.

[00:16:17] Speaker 01:
I think, Your Honor, this is all a MISO-driven process.

[00:16:24] Speaker 01:
Once FERC sets the rules, I don't think FERC is getting involved.

[00:16:29] Speaker 01:
Maybe Ms.

[00:16:29] Speaker 01:
Valley can comment on that.

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But I don't think FERC is getting involved in the individual projects that are approved as part of the plan.

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And so what is and so what would happen in this situation is the MISO board approves a transmission expansion plan.

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We say, hey, there's more than one zone that benefit this project ought to be competed.

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We would then go have a, we would then have to go to FERC and file a complaint and file a complaint.

[00:17:00] Speaker 01:
And then FERC would have to act on that complaint.

[00:17:03] Speaker 01:
You can probably count on it.

[00:17:05] Speaker 07:
Once you do that, once you do that, does that stop?

[00:17:08] Speaker 01:
No.

[00:17:08] Speaker 07:
That's why I'm trying to figure out how the time works.

[00:17:11] Speaker 01:
Absolutely not, Your Honor.

[00:17:12] Speaker 01:
The projects continue to roll on, if you would, and

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the projects continue to roll on.

[00:17:20] Speaker 01:
There's no stay.

[00:17:21] Speaker 01:
There's no.

[00:17:22] Speaker 07:
Right.

[00:17:22] Speaker 07:
So how long does it take for since they're not competition.

[00:17:29] Speaker 07:
So, you know, the local utility is going to be the one that is going to build this.

[00:17:36] Speaker 07:
And so how long does it take between when they submit their sort of public notice, MISO submits this thing, this plan.

[00:17:43] Speaker 07:
Here's our plan for 2022 to FERC.

[00:17:47] Speaker 07:
before the local construction folks that are your competitors, the local developers start sort of shovels in the ground?

[00:18:01] Speaker 07:
Do you have their time for a FERC challenge and going to court?

[00:18:05] Speaker 01:
I really don't know, Your Honor.

[00:18:08] Speaker 01:
I would think that these projects, to the extent they're built, would happen within

[00:18:17] Speaker 01:
a year, but I really don't know, Your Honor.

[00:18:20] Speaker 01:
I really don't know that.

[00:18:23] Speaker 01:
I would think they would happen within a year, maybe a year and a half after the approval.

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Obviously, you may have to get some local permits.

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You may have to, you know, go see this environmental agency and the like.

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But I do think, Your Honor, I do think the situation here that is possibly being discussed is similar to what the court has dealt with in the pipeline cases.

[00:18:45] Speaker 01:
in the natural gas pipeline cases, where the commission was giving people certificates, they were out building, and then people were working their way through the FERC and appellate process.

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And then by the time the court acted and said, hey, there's a problem here, the project was already in the ground.

[00:19:06] Speaker 01:
And the court just dealt with that issue in the Environmental Defense Fund case.

[00:19:11] Speaker 02:
And so we've had other cases where the project has stopped, have you on behalf of your clients file the motion to stay in a particular project.

[00:19:21] Speaker 01:
Know your arm, but we don't believe that for which we don't believe that for would grant the stay.

[00:19:27] Speaker 01:
Maybe they might, maybe they might.

[00:19:30] Speaker 01:
Who knows?

[00:19:31] Speaker 02:
There may be public opposition, there may be opposition enough that FERC says we need to.

[00:19:36] Speaker 02:
So that's all speculation.

[00:19:37] Speaker 02:
It's really hard to show likelihood of success.

[00:19:41] Speaker 02:
These projects, which are not tiny and well known,

[00:19:48] Speaker 02:
And your client can identify, and you say FERC knows all this, but you're supposed to let the court know it's your burden to show you have standing.

[00:20:00] Speaker 02:
And we need to know.

[00:20:01] Speaker 02:
Whatever FERC knows is interesting, but it's your burden.

[00:20:06] Speaker 02:
And FERC doesn't have to help you meet your burden in that regard.

[00:20:11] Speaker 02:
Secondly, I'm just not clear why

[00:20:17] Speaker 02:
where your clients have all this information.

[00:20:22] Speaker 02:
You can't, and if you don't have the information, ask FERC to provide it.

[00:20:28] Speaker 02:
Why these cases can't be teed up with more specificity?

[00:20:33] Speaker 02:
I understand it's timely, it's costly,

[00:20:37] Speaker 02:
But there's a lot at stake and reliability is something that the agency has decided is paramount in the projects that it has identified.

[00:20:46] Speaker 02:
Now it may be wrong, but it seems to me in order to get to that, there's a hurdle that article three sets for the court.

[00:20:58] Speaker 02:
And I'm just not understanding why experienced counsel, at least when they come to this circuit,

[00:21:06] Speaker 02:
know that standing is a heavy threshold demonstration.

[00:21:14] Speaker 02:
And simply a good legal argument at that point is not enough.

[00:21:21] Speaker 01:
Your Honor, I think there are two separate issues here.

[00:21:26] Speaker 01:
We'll talk about the standing.

[00:21:27] Speaker 01:
But there were two separate issues.

[00:21:29] Speaker 01:
There was the immediate need, and then there was the 100 to 229 KV.

[00:21:36] Speaker 02:
With all due respect, FERC statement at least explains its explanation of why everything is an operational within three years.

[00:21:50] Speaker 02:
And you haven't attacked that as a practical matter.

[00:21:55] Speaker 02:
Secondly, being barred from a category, but don't you have some obligation to assure the court

[00:22:07] Speaker 02:
that either because your clients are big or because of where they're located, this is precisely the project on which they would want to build or compete.

[00:22:24] Speaker 02:
I don't understand why your clients can't provide this information.

[00:22:27] Speaker 02:
That's all I'm getting at.

[00:22:28] Speaker 02:
No one's argued it's impossible to provide it.

[00:22:32] Speaker 02:
You say FERC has it, we'll ask them to give you that information.

[00:22:36] Speaker 02:
And if they turn you down, then you're in a different situation.

[00:22:40] Speaker 01:
Rihanna, I think FERC has, what we've said in terms of competitor standing is we compete all over the country.

[00:22:51] Speaker 01:
for projects.

[00:22:53] Speaker 02:
Right.

[00:22:53] Speaker 02:
And we don't really have to concern ourselves with what you do all over the country.

[00:22:58] Speaker 02:
Well, that's right, Your Honor.

[00:22:59] Speaker 02:
All right.

[00:23:00] Speaker 02:
So you know that, counsel.

[00:23:02] Speaker 02:
So you're coming to the DC Circuit, and you know that no matter what panel you're before, you're going to get questions on standing specificity, eminence.

[00:23:14] Speaker 02:
And I don't understand why everybody's not prepared on this.

[00:23:20] Speaker 02:
I mean, we don't have any authority to overrule the Supreme Court.

[00:23:25] Speaker 01:
Your Honor, I think in the earlier discussion I did listen in on, in our case, though, what we're saying is what FERC did is it provided a benefit to our competitors, and we are harmed economically.

[00:23:42] Speaker 01:
We did compete on one project.

[00:23:44] Speaker 01:
These projects are ongoing.

[00:23:46] Speaker 01:
They're ongoing projects.

[00:23:48] Speaker 01:
They're going to continue to identify economic projects between 100 and 229 KV.

[00:23:55] Speaker 01:
They're going to continue to foreclose us from bidding on those projects if we were so inclined to bid on those projects.

[00:24:04] Speaker 01:
And I can't consider it.

[00:24:05] Speaker 02:
If I don't understand why we can't get some declarations in here where people say, look, we've been before.

[00:24:13] Speaker 02:
This is profitable for us.

[00:24:14] Speaker 02:
We want to do it again.

[00:24:15] Speaker 02:
Now there's a project that FERC has in the pipeline or that one of our competitors has in the pipeline.

[00:24:23] Speaker 02:
And that's precisely why we want to.

[00:24:29] Speaker 02:
fit on it and FERC is saying no and you're saying well by putting all these into the immediate need category that's a complete miscategorization because these projects are not operational within three years.

[00:24:44] Speaker 01:
Your honor I think we're I think we're saying two things on that the immediate need exception was a separate issue that we briefed but our

[00:24:54] Speaker 01:
The other issue is, is that the projects between 100, that they did let us compete on, the immediate need for the 230 kV above, and for the projects 100 to 229 kV above, they foreclosed us from participating in these projects.

[00:25:11] Speaker 01:
Your honor, and I'm not arguing with your honor, please.

[00:25:14] Speaker 02:
Well, all you said here today is your clients might someday

[00:25:21] Speaker 02:
want to bid on these projects.

[00:25:25] Speaker 02:
You haven't said, and it seems to me your clients have the information.

[00:25:29] Speaker 02:
Or if they don't, they ask FERC for it.

[00:25:32] Speaker 02:
I mean, the court is not trying to arbitrarily reject petitions on standing grounds.

[00:25:41] Speaker 02:
But we're simply looking for the hard information.

[00:25:45] Speaker 02:
And these projects are years in the development.

[00:25:50] Speaker 02:
Most of the lawyers who come before us are representing, quote, large actors.

[00:25:56] Speaker 02:
They know what's going on.

[00:25:58] Speaker 02:
This is not some stranger to the industry, much less stranger to the region.

[00:26:03] Speaker 02:
And I don't understand why, given you're as familiar with the Supreme Court decisions on standing as we, and presumably

[00:26:15] Speaker 02:
how tough it is in this circuit as compared to some other circuits to show Article III standing.

[00:26:24] Speaker 02:
So why not come prepared with affidavits, declarations, et cetera?

[00:26:29] Speaker 02:
In other cases, once the Supreme Court started to ratchet up the standing requirements, industry has come in with very specific information.

[00:26:44] Speaker 02:
that they didn't used to.

[00:26:47] Speaker 02:
And it's unclear to me why, and it's also unclear to me why, and I know it may just be money.

[00:26:57] Speaker 02:
They don't wanna spend the money to ask for it to stay.

[00:27:01] Speaker 02:
There may be some competitive disadvantage on other projects, and so they don't want, but these are choices they make.

[00:27:11] Speaker 02:
And when the court has this heavy burden,

[00:27:15] Speaker 02:
We need help.

[00:27:18] Speaker 01:
Your honor, it sounds like your honor is our view was this was a category exclusion, the 100 to 229 KV.

[00:27:30] Speaker 02:
I know.

[00:27:31] Speaker 02:
And all we know is the lawyer has told us that the people he represents or the entities he represents may one day

[00:27:45] Speaker 02:
want to bid.

[00:27:48] Speaker 02:
You're not making any commitment.

[00:27:50] Speaker 02:
You're not having any declaration.

[00:27:54] Speaker 02:
And goodness knows the Supreme Court has talked about these someday intentions are not enough.

[00:28:02] Speaker 02:
That's all I'm getting at.

[00:28:04] Speaker 02:
This is not this court coming up with some arbitrary rules.

[00:28:07] Speaker 02:
And it's not the Supreme Court.

[00:28:09] Speaker 02:
It's the Supreme Court interpreting this Constitution.

[00:28:13] Speaker 08:
I understand, Your Honor.

[00:28:14] Speaker 08:
I understand.

[00:28:18] Speaker 02:
Anything further?

[00:28:22] Speaker 02:
Shall we hear from the agency and then from the intervenors and then give you some time on rebuttal?

[00:28:28] Speaker 01:
Yes.

[00:28:28] Speaker 01:
Yes, Your Honor.

[00:28:29] Speaker 08:
I have three minutes on rebuttal.

[00:28:34] Speaker 02:
Council for respondent.

[00:28:38] Speaker 06:
May it please the court, Susanna Chu for the commission.

[00:28:43] Speaker 06:
Thank you for hearing these cases today.

[00:28:44] Speaker 06:
I'd like to start with the timing and specificity questions that your honors have raised.

[00:28:54] Speaker 06:
There is nothing that prevented LS Power from submitting an affidavit about any project that was selected in the transmission planning processes of

[00:29:07] Speaker 06:
2018, 2019, or any of these recent years, showing that they had the ability to bid on a specific project, but were precluded from doing so because of the way that Mid-Continent categorizes its projects.

[00:29:26] Speaker 02:
Well, I think the argument is, look, these are big operators that bid before.

[00:29:31] Speaker 02:
They have the ability to bid.

[00:29:36] Speaker 02:
All right, I don't think that's the question, is it?

[00:29:41] Speaker 02:
Well, I think it's part of the question, Your Honor.

[00:29:44] Speaker 02:
I think the question is whether they could have and would have been.

[00:29:47] Speaker 02:
For small operators, at least that's the representation that counsel's making on their behalf.

[00:29:55] Speaker 02:
So I don't know that's ability, because that's not where the Supreme Court has focused.

[00:30:00] Speaker 02:
I mean, that's where we talk about ready, willing, and able.

[00:30:06] Speaker 02:
But that's not the issue at this stage.

[00:30:11] Speaker 02:
It's an imminence issue as I see it.

[00:30:14] Speaker 06:
Yes, I think that's right, Your Honor.

[00:30:16] Speaker 06:
It's an imminence issue under Clapper, under New York Regional Interconnect, and all the other precedents.

[00:30:23] Speaker 06:
This case is very similar to the unpublished decision involving Ellis Power from 2017.

[00:30:28] Speaker 06:
As Your Honor is pointing out,

[00:30:33] Speaker 06:
LS Power may one day want to bid on a particular project in the mid-continent region, but they haven't pointed out any specific project.

[00:30:42] Speaker 07:
Sorry, can I ask something?

[00:30:43] Speaker 07:
So imagine I own, it's a women's owned construction business situated within MISO, or I have at least a branch within MISO.

[00:30:56] Speaker 07:
I have in the past bid on projects in MISO or wanted to bid.

[00:31:01] Speaker 07:
I have expressed my interest

[00:31:03] Speaker 07:
in continuing to bid.

[00:31:04] Speaker 07:
And FERC, I'm not saying they would, this is just a hypothetical.

[00:31:07] Speaker 07:
FERC adopts a rule that says, categorically, no women-owned construction companies can compete for X category of contracts.

[00:31:18] Speaker 07:
FERC adopts that rule.

[00:31:19] Speaker 07:
This is not your FERC, this is bad FERC, FERC X somewhere.

[00:31:23] Speaker 05:
That's just- Understood your honor.

[00:31:26] Speaker 07:
Women-owned companies cannot compete for X category of contracts within my scope.

[00:31:34] Speaker 07:
Categorically.

[00:31:38] Speaker 07:
And your position is that to establish standing, I have to wait for a specific project to come along, which will be more than 60 days after that order has issued from FERC.

[00:31:51] Speaker 07:
And I then have to bid for this thing that I'm categorically forbidden to bid for.

[00:31:57] Speaker 07:
To have standing?

[00:32:00] Speaker 07:
What case can you tell me when there was a categorical bar

[00:32:04] Speaker 07:
to someone participating because of their identity.

[00:32:07] Speaker 07:
They still had to nonetheless, and there's no question they're qualified, they have the ability, like Judge Rogers says, that they have the interests, that they're active in the area.

[00:32:20] Speaker 07:
None of those are questioned.

[00:32:22] Speaker 07:
That they nonetheless have to say, oh, there's one.

[00:32:27] Speaker 07:
that I want in that situation.

[00:32:29] Speaker 07:
It's their business to bid.

[00:32:30] Speaker 07:
It's their business model to bid.

[00:32:32] Speaker 07:
They're active in this area, and they still have to wait for a project.

[00:32:35] Speaker 07:
They can't challenge the rule itself.

[00:32:38] Speaker 07:
And then what, challenge that project?

[00:32:40] Speaker 07:
What's your best case for that on a categorical bar like this?

[00:32:45] Speaker 06:
Well, Your Honor, I'm not aware of a case

[00:32:49] Speaker 06:
No, and the prior LSK case was not that.

[00:32:52] Speaker 06:
No, no, this is absolutely different.

[00:32:55] Speaker 06:
This is very different.

[00:32:56] Speaker 06:
Right, but I would expect that your position of understanding I would have to do that.

[00:33:02] Speaker 07:
I wouldn't.

[00:33:02] Speaker 07:
I couldn't challenge the rule upfront unless there happened to be a project that was barred within 60 days of that order issuing.

[00:33:08] Speaker 07:
I couldn't challenge the order.

[00:33:10] Speaker 07:
I would have to wait for a project to come down the line two or three years later.

[00:33:14] Speaker 07:
And I would have to submit a completely pointless application and spend all the thousands or millions of dollars it takes to put that submission together to apply for something that FERC has said, as a matter of law, I'm not eligible to compete for.

[00:33:27] Speaker 07:
And then that's FERC's position.

[00:33:30] Speaker 07:
That's what it takes for me to have standing.

[00:33:33] Speaker 06:
Well, I think, Your Honor, that at a minimum, a declaration would have to be submitted.

[00:33:37] Speaker 07:
Well, I would have to submit a declaration that says, what would that declaration say?

[00:33:41] Speaker 07:
It would say stuff that FERC doesn't dispute right now that I'm a business.

[00:33:46] Speaker 07:
If this is what I do, this is what we do for a living.

[00:33:50] Speaker 07:
I'm in the area.

[00:33:51] Speaker 07:
I've competed for things in the past in the area.

[00:33:54] Speaker 07:
Right.

[00:33:55] Speaker 07:
This is what I do.

[00:33:57] Speaker 07:
And

[00:33:58] Speaker 07:
It's nothing infeasible or unreasonable to think that I'm going to keep on doing.

[00:34:04] Speaker 07:
In fact, I'm telling you, that's why I'm bringing this lawsuit.

[00:34:06] Speaker 07:
I'm going to keep challenging this.

[00:34:07] Speaker 07:
But you have said, I'm going to do an affidavit that says, FERC has said I'm categorically walled off.

[00:34:13] Speaker 07:
And if I weren't categorically walled off, I'd want to keep doing what I had been doing all the years before and that I do everywhere else in the country.

[00:34:20] Speaker 07:
That's what the affidavit needs to say.

[00:34:24] Speaker 06:
I think the hypothetical you're posing, Your Honor, would be a facial challenge to, of course... They have a facial challenge to your rule here.

[00:34:33] Speaker 07:
They have a facial challenge to your rule here.

[00:34:37] Speaker 06:
Right, and the difference being that as in the LS power case, these projects have been ongoing.

[00:34:43] Speaker 06:
The exclusion from bidding for projects in the 100 to 230 kilovolt range predated this case.

[00:34:54] Speaker 06:
And let's not forget that in the orders on review, the commission actually lowered the voltage threshold.

[00:34:59] Speaker 06:
So the commission actually expanded the number of projects that are open to competition.

[00:35:03] Speaker 03:
But not as much as Mr. Fallon wants.

[00:35:06] Speaker 06:
Right, right.

[00:35:07] Speaker 03:
So that's the harm he's depending on.

[00:35:09] Speaker 03:
That's the harm he's depending on.

[00:35:10] Speaker 03:
He said he asked for going down to 1,000.

[00:35:12] Speaker 03:
That's our position of what's required.

[00:35:16] Speaker 07:
Did you have projects in the 100 to 229 range that were not baseline by liability projects and were not other projects and so were open to competition in the relative period since this order issued?

[00:35:31] Speaker 06:
I am not aware of any of that work.

[00:35:33] Speaker 07:
Okay, then I'm not sure you had anything that they could have submitted paper to compete on.

[00:35:36] Speaker 07:
That seems to me sort of, it seems to me, if you're going to say they haven't shown standing, they didn't show us which project they want, you have to show, don't we have to have some plausible basis for concluding that there was something they could have submitted papers for?

[00:35:51] Speaker 07:
that they weren't categorically pulled off of from this collective stream of exclusions that FERC has adopted?

[00:35:57] Speaker 06:
Right, Your Honor.

[00:35:57] Speaker 06:
I'm sorry if I gave a confusing answer.

[00:35:59] Speaker 06:
I mean, there were projects in the 100 to 230 kilovolt range.

[00:36:04] Speaker 06:
And LS Power does talk about specific projects.

[00:36:07] Speaker 06:
But at no point did they identify any specific project that they would have bid on.

[00:36:12] Speaker 06:
And there was nothing stopping them from submitting a declaration.

[00:36:16] Speaker 07:
I might have misunderstood your answer.

[00:36:18] Speaker 07:
I mean, if there were

[00:36:20] Speaker 07:
I take your point if there were projects in the 100 to 229 range.

[00:36:25] Speaker 07:
Yes, that were not baseline reliability projects and we're not other projects so that they could have the other projects category so that they could have been on them and they didn't or they haven't pointed to those.

[00:36:39] Speaker 07:
But that's what I'm trying to ask is if it's a null set, because you've got a series of exclusions here that FERC has adopted.

[00:36:44] Speaker 07:
So this is what's concerning me.

[00:36:46] Speaker 07:
If it's a null set of what they could have applied for, then I don't know why they needed affidavit to say, or they certainly don't need to apply for, and they need an affidavit to say, there's nothing we could have applied for, but had there been, we would have.

[00:37:02] Speaker 07:
I mean, I think they clearly say that we want to compete.

[00:37:06] Speaker 07:
We want to compete for these projects.

[00:37:07] Speaker 07:
We have competed in the past.

[00:37:09] Speaker 07:
This is what we do for a living.

[00:37:11] Speaker 06:
I understand that, Your Honor, but I think this is the Ellis Power case in 2017, right?

[00:37:16] Speaker 07:
That one of the two exclusions- No, this is not that case because that was not a categorical prohibition.

[00:37:23] Speaker 07:
I think it was.

[00:37:25] Speaker 07:
No, it wasn't because there was some of the whole discussion in that case that argument was that, in fact, what you had was, well, we're concerned about the things where there's this category of things you can bid on, but some of them, not 100% of them, some of them

[00:37:40] Speaker 07:
might be subject to a state right of first refusal.

[00:37:43] Speaker 07:
But whether the state will do it, whether you can still compete when a state does, because these things change from state to state.

[00:37:50] Speaker 07:
They're not a model, as FERC explained at the time.

[00:37:54] Speaker 07:
And so whether, in fact, even the state, the rights of first refusal would in fact preclude competition was an open question.

[00:38:00] Speaker 07:
And then there was a redressability question that Judge Table raised, which was, all right, well, even if there is a right of first refusal, we can't redress it because the law keeps that in place.

[00:38:10] Speaker 07:
So that was a very, you had particularized information that was needed there because of the nature of what was going on.

[00:38:17] Speaker 07:
But here what we have in their view

[00:38:19] Speaker 07:
is, and I don't think FERC disagrees, is a categorical rule.

[00:38:24] Speaker 07:
There's nothing fact-specific that's going to change, and no one disputes.

[00:38:27] Speaker 07:
No one disputes that LST is a huge contractor construction company that has the ability to compete in there, that it has competed in here, that it has projects that it's been interested in and applied for, but then its theory is we've been walled off.

[00:38:42] Speaker 07:
And to say that they needed to identify a project when FERC can't tell me that there was one they would have been eligible for seems to me, at some point we can't turn this into code pleading, right?

[00:38:53] Speaker 07:
That's not what standing is.

[00:38:57] Speaker 07:
FERC could tell me there are ones out there that they could have identified that were something they could have competed for.

[00:39:03] Speaker 07:
That would be a totally different thing.

[00:39:06] Speaker 06:
I'm not sure that there were, Your Honor.

[00:39:08] Speaker 06:
It's possible that Ms.

[00:39:09] Speaker 06:
Valley might have an example.

[00:39:11] Speaker 06:
I don't know the answer to that.

[00:39:14] Speaker 06:
But I do think that there was a burden on petitioners to show the court that it does satisfy the Article III standing requirements.

[00:39:23] Speaker 06:
And I don't think that was on here.

[00:39:24] Speaker 07:
But they said that you don't, you don't just, you don't, again, dispute the, do you dispute that they operate, that they have, they operate within MISO, that they've,

[00:39:34] Speaker 07:
got the ability to operate within, I think Judge Rogers said this isn't about ability to do it or interest.

[00:39:39] Speaker 07:
Do you dispute their sincere interest in competing?

[00:39:43] Speaker 05:
No, of course not, Your Honor.

[00:39:44] Speaker 05:
We do not dispute their interest in competing, no.

[00:39:48] Speaker 02:
Well, I don't know what that means.

[00:39:49] Speaker 02:
Just let me say, sincere interest in competing.

[00:39:54] Speaker 02:
I mean, I'd like to go to the mountains someday, but that's not enough.

[00:39:58] Speaker 02:
All right.

[00:40:00] Speaker 07:
So you don't dispute that they're in the business right now of doing this very construction work that they're not allowed to do here.

[00:40:06] Speaker 06:
We do not dispute that they're a competitive transmission developer.

[00:40:08] Speaker 03:
I have a question on the merits, which is just looking at the basis on which FERC rejected MISO's first two proposals.

[00:40:20] Speaker 03:
It did so in part because

[00:40:22] Speaker 03:
MISO was going to calculate regional benefits for the sub 230 KV projects and then ignore them and allocate costs locally, right?

[00:40:33] Speaker 03:
But now MISO is saying, well, we're just not gonna calculate the non-local benefits.

[00:40:43] Speaker 03:
And FERC seems to have approved that.

[00:40:45] Speaker 03:
Can you respond to the petitioner's head in the sand argument that

[00:40:51] Speaker 03:
It seems like what FERC has said is that MISO can allocate costs exclusively locally, as long as it just doesn't know about whatever regional benefits the project might confer.

[00:41:05] Speaker 03:
Why is that not an apt characterization of FERC's position?

[00:41:10] Speaker 06:
Right.

[00:41:10] Speaker 06:
So Your Honor, going back to the orders that you are referencing, the first and second regional orders, as petitioners call them, the commission never made a finding that projects in the 100 to 229 kilovolt range necessarily produce regional benefits.

[00:41:31] Speaker 06:
So there is no finding that as a whole,

[00:41:37] Speaker 06:
in the aggregate, that those projects generally produce these.

[00:41:42] Speaker 06:
these broader regional benefits that necessarily mean that they should be in the market efficiency project category.

[00:41:50] Speaker 06:
So there just wasn't that finding.

[00:41:52] Speaker 06:
And that goes back to Old Dominion as well, where that case was a different case where there was a whole category of projects that was acknowledged to have regional benefits.

[00:42:08] Speaker 06:
And yet all the

[00:42:10] Speaker 06:
costs were allocated to a single zone and there the petitioner objected to paying for those two projects.

[00:42:17] Speaker 06:
So that's not the situation here.

[00:42:19] Speaker 06:
The commission has never found that lower voltage projects produce these regional benefits and there is ample evidence in the record that it's reasonable to have a cutoff.

[00:42:31] Speaker 06:
It's reasonable to distinguish

[00:42:32] Speaker 06:
between the higher voltage transmission projects that are more likely to produce more widespread regional benefits and the lower voltage projects that tend to have local benefits.

[00:42:44] Speaker 03:
On that point, where in the record did FERC explain its rationale for not moving down to the hundred

[00:42:54] Speaker 03:
But choosing the 230 kilovolt threshold instead.

[00:42:58] Speaker 03:
I mean, I take that to be the gravamen of Mr. Fallon's challenge on that point.

[00:43:03] Speaker 03:
And what is the explanation for stopping there?

[00:43:05] Speaker 06:
So a couple, Your Honor.

[00:43:11] Speaker 06:
First, in a section 205 context, the commission found that 230 kilovolts was a reasonable cutoff.

[00:43:19] Speaker 06:
And it's also important to remember the commission didn't even find that 345 kilovolts was an unreasonable threshold.

[00:43:26] Speaker 06:
Generally, the commission has found it is reasonable for the mid-continent system operator to categorize its projects.

[00:43:35] Speaker 06:
That's how it manages its transmission process.

[00:43:37] Speaker 06:
And the commission has found that to be reasonable.

[00:43:40] Speaker 06:
Now, in the Section 206 context, the commission found that LS Power had not met its burden of showing that 230 kilovolts is unjust and unreasonable, such that you have to bring the project threshold all the way down to 100 kilovolts.

[00:43:57] Speaker 03:
So help me out with that.

[00:44:00] Speaker 03:
So FERC's decision in the Northern Indiana case dealing with interregional

[00:44:06] Speaker 03:
projects, the commission chose to take the threshold down to 100 kilovolts.

[00:44:11] Speaker 03:
And I guess that was in part because they wanted to make the MISO and the PJM threshold consistent.

[00:44:23] Speaker 03:
But is there any tension in your view between embracing the 100 kilovolt threshold in northern Indiana and not doing that here?

[00:44:37] Speaker 06:
No, Your Honor, I don't think there is an inconsistency.

[00:44:39] Speaker 06:
Of course, the interregional cost allocation issue is before the court in case number 20-1262.

[00:44:49] Speaker 06:
And I think as Your Honor is right to point out, there was a specific mismatch between the two regions in that case, between the Mid-Continent region and the PJM region.

[00:45:02] Speaker 06:
It was an entirely different record.

[00:45:05] Speaker 06:
There were specific projects that were being prevented from moving forward.

[00:45:12] Speaker 06:
These are specific projects that the commission had found would have inter-regional benefits, benefits to both of these regions.

[00:45:19] Speaker 06:
But the mid-continent voltage threshold and its project cost minimum of $5 million were preventing those projects from going forward.

[00:45:31] Speaker 06:
So in that particular context and on that particular record, the commission found that it was not just unreasonable to apply the thresholds.

[00:45:40] Speaker 03:
But here, petitioners are saying that there are a couple of projects in the 2018 expansion plan as to which MISO determined that they benefited more than one zone.

[00:45:56] Speaker 03:
But nonetheless, they've treated them as

[00:45:59] Speaker 03:
purely local for competition purposes.

[00:46:04] Speaker 03:
And your response to that is?

[00:46:07] Speaker 06:
The commission explained in the orders that these are isolated examples that do not, in your words, Your Honor, in the aggregate and on balance, show that the entire category

[00:46:23] Speaker 06:
is regionally beneficial.

[00:46:26] Speaker 06:
I mean, these isolated examples do not prove that it's unreasonable to have a voltage threshold as a whole.

[00:46:36] Speaker 07:
But you also had two applications before this by MISO in which it said, acknowledged it was going to have projects at a lower threshold and they were going, the ones, the two that FERC rejected.

[00:46:51] Speaker 07:
And in the process, they were going to be able to identify regional benefits, extra zone benefits, but that wasn't going to be factored into the cost application.

[00:47:03] Speaker 07:
Now, I understand how you characterize FERC's decision there, but isn't that also

[00:47:12] Speaker 07:
evidence that, at a minimum, MISO thought was going to find regional benefits in a sufficient immaterial number of cases to even go through the exercise?

[00:47:24] Speaker 07:
I'm not sure, Your Honor.

[00:47:25] Speaker 06:
I think that... Not sure?

[00:47:26] Speaker 06:
Well, I'm not sure what MISO was thinking.

[00:47:29] Speaker 07:
I know, but I'm just asking on the paper that was... FERC made two decisions here and said, and acknowledged, look, your process is going to do this and it's going to identify this thing, but then you're not going to factor it into your cost allocation.

[00:47:42] Speaker 07:
be sure FERC didn't say we agree they're there or not.

[00:47:45] Speaker 07:
But MISO itself, this is what I'm talking about evidence before FERC, I'm not saying FERC already made the decision, evidence before FERC was that geez, MISO

[00:47:55] Speaker 07:
has already got this process in place.

[00:47:57] Speaker 07:
And, you know, it's not in the business or in the business of running around Robin Hood's barn here doing things that are never going to materialize in anything, right?

[00:48:05] Speaker 07:
It's not in the business of spending time and resources identifying regional benefits that don't exist.

[00:48:12] Speaker 07:
And so don't, those two things, and then so it comes in with the third application and it's sort of like, we're just not going to, you know,

[00:48:20] Speaker 07:
If we just don't look, then FERC will sign off on it.

[00:48:23] Speaker 07:
But why are those, plus the Northeast Indiana case, plus the examples that they've given, collectively sufficient evidence that FERC didn't grapple with in this case?

[00:48:38] Speaker 06:
As I understand it, Your Honor, in the prior proposals, Mid-Continent was proposing to calculate the benefits and costs, both regionally and also locally.

[00:48:50] Speaker 06:
And Mid-Continent said, with respect to these projects that we're now talking about, that the local zone actually was receiving more benefits than it was paying in costs.

[00:49:04] Speaker 07:
in the commission's view, that was... That doesn't mean that other zones aren't also receiving more benefits and not having a material amount of benefits and not having to pay a penny.

[00:49:16] Speaker 07:
That doesn't mean exclude that at all, does it?

[00:49:18] Speaker 06:
It's possible that these other zones were receiving some modest spillover of benefits, but... When do we do it?

[00:49:25] Speaker 06:
You know it's modest.

[00:49:26] Speaker 07:
How do you know it's modest?

[00:49:27] Speaker 07:
How do you know modest?

[00:49:28] Speaker 07:
By the way, how does FERC define modest?

[00:49:32] Speaker 06:
I'm not sure if there is a specific numerical definition for modest and it may vary depending on the region.

[00:49:41] Speaker 06:
Really?

[00:49:41] Speaker 06:
I'm not sure, Your Honor.

[00:49:44] Speaker 07:
But I mean like 40%?

[00:49:45] Speaker 07:
It doesn't feel modest to me, but I'm not the expert.

[00:49:51] Speaker 06:
I think that the issue of the level of spillover benefits was more at issue in the baseline reliability.

[00:49:59] Speaker 06:
No, I understand that.

[00:49:59] Speaker 07:
I'm just trying to understand what, you know, you're talking about what kind of evidence you need and, you know, that, oh, that wouldn't have been enough because it might've been modest, but without knowing a definite, without Ferg telling me what counts as modest, that would have been exactly something they could have done had they actually grappled with this evidence in front of them.

[00:50:17] Speaker 06:
I'm not sure that there is a specific threshold, honestly, Your Honor.

[00:50:20] Speaker 06:
Right.

[00:50:20] Speaker 07:
That would have been a good time to address that.

[00:50:23] Speaker 06:
Right.

[00:50:23] Speaker 06:
But I think the commission found that the LS power just didn't meet its burden here because it was two isolated examples.

[00:50:31] Speaker 07:
And the two isolated examples, but Judge Piller just flagged, just to be clear, it's not just that, right?

[00:50:38] Speaker 07:
They've got two examples and you want to use the adjective isolated.

[00:50:42] Speaker 07:
They've got two examples.

[00:50:43] Speaker 07:
You've got the northern Indiana case where the entire structure of it was a recognition that you can have regional benefits at this lower range of voltage.

[00:50:56] Speaker 07:
And that was enough to even motivate a between systems project like that.

[00:51:02] Speaker 07:
And then FERC didn't want to stop those types of things because there are these kinds of benefits.

[00:51:07] Speaker 07:
So you have that, and then you have twice MISO coming to you, and for some reason going through a hunt for things that we can maybe just assume that MISO wouldn't have gone through the process of identifying regional benefits as it does if it was a null set.

[00:51:27] Speaker 06:
Right, Your Honor.

[00:51:28] Speaker 07:
So it's not just two.

[00:51:30] Speaker 07:
So we've got more than that.

[00:51:31] Speaker 06:
Well, there were only two specific actual projects in the record.

[00:51:35] Speaker 06:
There's a Northern Indiana case.

[00:51:37] Speaker 06:
Oh, yes.

[00:51:37] Speaker 06:
Of course.

[00:51:38] Speaker 06:
Of course.

[00:51:39] Speaker 06:
The Northern Indiana case.

[00:51:40] Speaker 06:
Yes.

[00:51:40] Speaker 06:
But that was, again, yes, Your Honor, that was different and the commission found it to be different.

[00:51:46] Speaker 03:
I think what we have to remember here is the commission... Can you please just run by me again?

[00:51:49] Speaker 03:
Why is that different in the sense of why are the potential for inter-regional benefits in that case necessarily different from the potential from

[00:52:02] Speaker 03:
regional or interzone benefits in this case.

[00:52:07] Speaker 06:
Well, two things, Your Honor.

[00:52:08] Speaker 06:
I think the commission found in the record there that there were these very specific projects that were being held up.

[00:52:15] Speaker 06:
And there are different kinds of projects.

[00:52:18] Speaker 06:
These are interregional projects that could be located in PJM entirely with benefits to MISO, or it could be located in MISO with benefits to PJM.

[00:52:30] Speaker 06:
So the commission was clear it was looking at that particular record.

[00:52:36] Speaker 06:
I think what we're dealing with here is that the commission was finding that just the possibility of some projects in this range providing some regional benefits was not enough to show that it's not just unreasonable to have a voltage threshold.

[00:52:58] Speaker 06:
And it may be helpful to look at the commission's market projects order at JA 1039.

[00:53:05] Speaker 06:
It's paragraph 18.

[00:53:08] Speaker 06:
The commission is quoting some language from another case, but it is saying that... I'm sorry, can you just tell me the page again?

[00:53:13] Speaker 07:
I apologize, sorry.

[00:53:15] Speaker 06:
Of course, Your Honor, it's JA 1039.

[00:53:17] Speaker 06:
Okay.

[00:53:20] Speaker 06:
It's paragraph 18.

[00:53:23] Speaker 06:
And the commission is quoting from other cases, but it's explaining that by limiting transmission projects to certain voltage thresholds, that what we're doing here is establishing clear and objective standards and avoiding the need for the system operator to, quote, expend resources on the consideration of transmission projects that are less likely to provide regional transmission benefits.

[00:53:51] Speaker 03:
By expending resources, you're talking about running a competitive process.

[00:53:55] Speaker 06:
Right, right, that is that is part of it.

[00:53:58] Speaker 06:
Yes.

[00:53:58] Speaker 06:
And the commission here is balancing the reality of the system operators need to expand resources, the, you know, the, the administration of these transmission planning processes, which are large and complex and lengthy.

[00:54:12] Speaker 06:
So it's balancing those considerations against the needs for competition and for reliability and the broader public policy considerations.

[00:54:22] Speaker 03:
I don't know if you were listening when Mr. Glover was on, but I wonder if you have any sort of bigger picture perspective that you can give us on why it is that since Order 1000

[00:54:35] Speaker 03:
kind of made this sea change and said, look, we think competition is really is really salutary.

[00:54:41] Speaker 03:
We're going to try to open up a lot more to competition.

[00:54:44] Speaker 03:
We're generally getting rid of rights of first refusal.

[00:54:47] Speaker 03:
And it just looks, you know, however many years out, like, you know, an overly optimistic expectation or like, how can we understand

[00:55:02] Speaker 03:
this as a healthy functioning under order 1000 as distinct from kind of, you know, incumbent actors with monopoly power, just dragging their heels and for looking the other way.

[00:55:22] Speaker 03:
I mean, I don't mean to be, you know, just trying to be tendentious in putting the question to see whether you can cast any light on that for us.

[00:55:31] Speaker 06:
Of course, Your Honor, I appreciate the issues you are bringing up and actually all of these issues are under consideration in a holistic way.

[00:55:41] Speaker 06:
Right now, before the Commission, the Commission actually issued a notice of proposed rulemaking on transmission infrastructure development.

[00:55:50] Speaker 06:
It's actually FERC docket RM21-17.

[00:55:54] Speaker 06:
And many parties, including the system operator and the transmission developer here, have submitted comments to the commission about all of the issues, like all of these about voltage thresholds, about immediate need reliability exceptions, about the myriad issues that go into these transmission planning processes.

[00:56:15] Speaker 06:
So I don't know how the commission ultimately will

[00:56:19] Speaker 06:
address these concerns, but they are front and center, because we know the importance of transmission development, obviously, and the significance of competition.

[00:56:29] Speaker 06:
So these are issues that are very actively being examined.

[00:56:33] Speaker 03:
What is this docket, and where did it come from, and what's the scope of this?

[00:56:38] Speaker 03:
It is Docket RM21-17.

[00:56:42] Speaker 03:
You said 21-17 and you said that all these issues are under consideration.

[00:56:45] Speaker 03:
Is it sort of notice of proposed rulemaking or it's just a call for... Yes, Your Honor.

[00:56:52] Speaker 06:
It was an advance notice of proposed rulemaking and the Commission is looking very broadly at transmission issues, especially as we know the importance now of

[00:57:05] Speaker 06:
of connecting renewable sources of power to the grid, you know, making sure that power gets to the population centers where it's needed I mean these are really difficult and important public policy issues and their front row center at the commission.

[00:57:21] Speaker 07:
So, what's the status of that, because that was 2017 we're five years after that now, is it still just an advanced notice of rulesmaking.

[00:57:30] Speaker 06:
Sorry, it's actually, I believe it was initiated in 2021, it's RM 21.

[00:57:33] Speaker 06:
I thought you said 2017.

[00:57:36] Speaker 06:
Oh, I'm sorry, I think I believe it was 2021.

[00:57:42] Speaker 07:
I misunderstood you, sorry.

[00:57:44] Speaker 06:
I believe that was the date and I might need to double check and I'll correct it.

[00:57:47] Speaker 06:
I will send a letter correcting myself if that's incorrect.

[00:57:50] Speaker 07:
That might be good that they're doing that there, but why, I mean, these particular situations here, they already have order 1000 on the books.

[00:57:57] Speaker 07:
Why wouldn't here have been the place to grapple with the implications of order 1000 for these two categorical rules that issue here?

[00:58:07] Speaker 06:
Right well here in this particular proceeding again with respect to the voltage threshold, the Commission is finding that.

[00:58:14] Speaker 06:
it's not unreasonable to have a voltage threshold in this, you know that it is giving some deference to the regional stakeholder process that produced this.

[00:58:24] Speaker 06:
It was a five-year long process that involved a huge amount of give and take that ultimately produced the 230 kilovolt threshold.

[00:58:33] Speaker 06:
So there is that.

[00:58:34] Speaker 06:
And with respect to the immediate need exception, as Your Honors know, that exception is not specific and unique to the mid-continent region.

[00:58:44] Speaker 06:
That exception exists in three other systems that we know of.

[00:58:49] Speaker 06:
It's in PJM, in the Southwest Power Pool, and the ISO New England.

[00:58:54] Speaker 06:
Of course, the Commission actually investigated the system operator's implementation of this particular exception.

[00:59:03] Speaker 06:
and largely found that they were being implemented as designed.

[00:59:12] Speaker 07:
I have some questions about this.

[00:59:15] Speaker 07:
So the Commission's rationale is it has these five criteria that are supposed to limit and make it rare, I think, for the word, or the exception that you'll have an immediate need and not the rule.

[00:59:27] Speaker 06:
Right it's five criteria that are supposed to help make it a limited exception.

[00:59:32] Speaker 07:
Can you tell me other than the requirement that they be online in three years or the criteria actually just says needed in three years or less.

[00:59:41] Speaker 07:
Other than that one, can you tell me how many of these career criteria do anything to limit these projects?

[00:59:49] Speaker 07:
I mean, posting an explanation, that doesn't stop anybody.

[00:59:52] Speaker 07:
Transparent process, that doesn't stop anybody.

[00:59:56] Speaker 07:
Receive comments, that doesn't stop anybody.

[01:00:00] Speaker 07:
And maintaining a list of past projects, that doesn't stop anybody.

[01:00:04] Speaker 07:
Have any of these criteria ever been used?

[01:00:08] Speaker 07:
And any meaningful way to stop, slow down how many things qualify as an immediate need exception project?

[01:00:15] Speaker 07:
They seem empty to me.

[01:00:16] Speaker 06:
I'm not sure that they have.

[01:00:18] Speaker 06:
Well, I think that the criteria are designed to make sure that there is notice to all market participants and that there's the ability to comment on them.

[01:00:28] Speaker 06:
And there is also a dispute resolution process.

[01:00:31] Speaker 07:
That was one of the whole issues here was that you said, well, they don't have to do it before.

[01:00:35] Speaker 07:
That's the whole issue here.

[01:00:36] Speaker 07:
First, you don't have to do it beforehand.

[01:00:38] Speaker 07:
And then instead, you can, I guess, raise it back when they're deciding if something is a baseline reliability project.

[01:00:46] Speaker 07:
But not all immediate need projects are baseline reliability projects, are they?

[01:00:51] Speaker 06:
That's right, Your Honor.

[01:00:53] Speaker 06:
So a couple things there.

[01:00:55] Speaker 07:
How do you think this process works, if someone could actually challenge it before it's too late?

[01:00:59] Speaker 06:
Well, actually, Your Honor, I know that there is that statement in the order about the timing of the notice.

[01:01:05] Speaker 06:
But actually, it is explained, especially in the Mid-Continent Brief, I believe, at page 15.

[01:01:10] Speaker 06:
I know.

[01:01:10] Speaker 07:
Where did the commission explain this?

[01:01:12] Speaker 07:
I've looked over the commission to explain this.

[01:01:14] Speaker 06:
OK.

[01:01:14] Speaker 06:
Well, in the order itself, just after the sentence regarding the timing.

[01:01:21] Speaker 07:
This is the same order you're talking about before.

[01:01:24] Speaker 06:
Yes, your honor.

[01:01:26] Speaker 06:
And I apologize.

[01:01:27] Speaker 06:
Let me just get the page.

[01:01:28] Speaker 07:
I mean, on paragraph 23, I have the five criteria do not require MISO to post a description of need before designating the incumbent transmission owner.

[01:01:48] Speaker 06:
Yes, right.

[01:01:49] Speaker 06:
I think that that sentence may have been in artful because it's the sentences immediately after that on JA 1041 that show that my so actually hosts the, the reliability needs like during the baseline reliability study process.

[01:02:07] Speaker 06:
And this study process does take place before the incumbent transmission developer is designated.

[01:02:15] Speaker 07:
That's just myself.

[01:02:16] Speaker 07:
If someone wanted to challenge it, there's nothing you can challenge at that point, right?

[01:02:19] Speaker 07:
That's just myself.

[01:02:21] Speaker 06:
I believe that any market participant could submit comments within the baseline.

[01:02:27] Speaker 07:
Submitting comments is not a limitation.

[01:02:29] Speaker 07:
Submitting comments is not a limitation.

[01:02:30] Speaker 06:
But they could challenge it.

[01:02:31] Speaker 06:
I mean, they could challenge it within WAC.

[01:02:33] Speaker 06:
During the baseline reliability study process before... Defer?

[01:02:36] Speaker 07:
They can bring it to FERC?

[01:02:39] Speaker 06:
They certainly could file a Section 206 complaint to FERC, yes.

[01:02:44] Speaker 07:
before, when, I don't know how this process works, and I certainly don't know how it works if the immediate need project is not, are all immediate need projects baseline for liability projects?

[01:02:58] Speaker 06:
No, not necessarily, Your Honor.

[01:02:59] Speaker 07:
Okay, so then this process doesn't work then.

[01:03:02] Speaker 06:
And now I think it does work, Your Honor, that the Commission found that the process actually did work in these in three other regional transmission systems.

[01:03:10] Speaker 07:
No, it said we have those criteria and three other ones.

[01:03:13] Speaker 07:
I saw no finding that, in fact, they actually were working to limit anything.

[01:03:17] Speaker 06:
I apologize, Your Honor.

[01:03:19] Speaker 06:
What I'm referring to is the other case that was recently argued to the court.

[01:03:25] Speaker 07:
I'm just saying that... I'm just still trying to understand how this is actually... Because I read those criteria, and particularly in light of the commission's decision in this case, that it doesn't have to be before.

[01:03:36] Speaker 07:
I don't see how submitting comments to my cell

[01:03:43] Speaker 07:
You submit comments to MISO and then MISO says, when do they say, no, we're gonna treat it as immediate need and designate the incumbent transmission on it.

[01:03:54] Speaker 07:
When do they do that?

[01:03:56] Speaker 06:
I believe that is after the baseline reliability study process.

[01:04:00] Speaker 06:
And Ms.

[01:04:00] Speaker 06:
Valley may be able to shed some additional light on it.

[01:04:03] Speaker 07:
The commission embraced this.

[01:04:05] Speaker 07:
The commission said, this is our check.

[01:04:07] Speaker 07:
This is our limit.

[01:04:08] Speaker 07:
So I'm hoping that the commission can tell me

[01:04:11] Speaker 07:
without asking MISO to do the work for it.

[01:04:13] Speaker 07:
I can't review MISO's decisions.

[01:04:15] Speaker 07:
I can only review yours.

[01:04:17] Speaker 06:
Of course, Your Honor.

[01:04:18] Speaker 06:
What I'm saying, though, is that there is the opportunity to challenge the reliability need finding within this baseline reliability projects process.

[01:04:28] Speaker 06:
And there is always the opportunity to bring a Section 206 complaint to the commission.

[01:04:32] Speaker 07:
You can bring a section at what point?

[01:04:36] Speaker 07:
Most likely when the whole thing's done and over and we've already designated the incumbent transmission owner.

[01:04:45] Speaker 06:
Well, I think as Judge Rogers was pointing out earlier that there's nothing stopping from somebody from seeking a stay from the commission or from the court for that matter.

[01:04:52] Speaker 07:
The commission, this is your big check.

[01:04:55] Speaker 07:
This is commission's sole real check on these reliability and immediate need projects is that somebody has to bring a 206

[01:05:04] Speaker 07:
challenge to a MISO determination to give something to the incumbent transmission owner, and that's not good enough by itself, they're going to have to get a stay and demonstrate a likelihood of success, even though all these criteria will be met.

[01:05:25] Speaker 07:
You're not going to give them a stay when they've met all the five criteria.

[01:05:30] Speaker 06:
Right here and I couldn't I couldn't comment as to what might happen in a given situation, but I would like to take one step back.

[01:05:36] Speaker 06:
The immediate need reliability exception is recognizing that there are some truly urgent reliability needs.

[01:05:43] Speaker 06:
If there is a violation of North American Electric Reliability Council standard, then

[01:05:50] Speaker 06:
that issue has to be addressed very quickly.

[01:05:54] Speaker 07:
So to avoid brownouts, to avoid- No, I understand that, but it sounds like, so the commission told the seventh circuit and it's an LSP case, the one that was an issue in the baseline reliability ones.

[01:06:10] Speaker 07:
Commission told the seventh circuit that most, if not all baseline reliability projects are online in three years.

[01:06:20] Speaker 07:
And then in fact, one of the factors the commission has balanced in its decision-making is MISO's desire that all baseline reliability projects be online quickly.

[01:06:34] Speaker 07:
Now, if these criteria aren't gonna be much of any real check at all, and at least within MISO, I don't know about these other regions.

[01:06:42] Speaker 07:
I don't know if they've told courts that they do everything in three years.

[01:06:45] Speaker 07:
But at least as to everything that the Commission has talked about here, which is baseline reliability projects that qualify for meeting need.

[01:06:52] Speaker 07:
That's the only thing that's mentioned here.

[01:06:55] Speaker 07:
Questions already told the Seventh Circuit.

[01:06:56] Speaker 07:
That's all.

[01:06:57] Speaker 07:
It's not a limit.

[01:06:58] Speaker 07:
It's all of them.

[01:06:59] Speaker 07:
Most, if not all, is the quote from the Seventh Circuit transcript right around minute 30.

[01:07:06] Speaker 06:
Right.

[01:07:06] Speaker 06:
So, Your Honor, we're not talking about just the baseline reliability.

[01:07:10] Speaker 06:
That's all the commission talks about here.

[01:07:12] Speaker 06:
But they have to be, what we're talking about is the universe of projects that are baseline reliability projects that also meet the criteria for a market efficiency project.

[01:07:24] Speaker 07:
Right.

[01:07:25] Speaker 07:
Well, we just talked about this criteria, and those five criteria are not a limit at all.

[01:07:29] Speaker 06:
No, but that also meet the market efficiency criteria that these projects are 230 kilovolts or more, and that they cost $5 million or more.

[01:07:39] Speaker 06:
And the commission here is recognizing the reality, which is demonstrated in the record, that the competitive developer process is a lengthy one.

[01:07:49] Speaker 06:
Does it have to be?

[01:07:52] Speaker 07:
Could the commission not

[01:07:55] Speaker 07:
allow or convince or not propose an expedited bidding process?

[01:07:59] Speaker 07:
The government does this all the time.

[01:08:01] Speaker 06:
I think that mid-continent has tried to expedite its processes, but no matter what, there is time that is required to- Okay, but that's a totally different reason.

[01:08:14] Speaker 06:
And to review all of these, but that's the reason for the exception.

[01:08:17] Speaker 06:
I mean, that's the broader, that's the reason for its existence.

[01:08:21] Speaker 07:
No, but what I'm trying to get at here, I understand that that's what the commission said, but it said this is going to be limited.

[01:08:30] Speaker 07:
and yet there's nothing limited.

[01:08:31] Speaker 07:
We know at least for those baseline reliability projects that qualify as market efficiency projects or might, and those are the only things that the commission talked about here in telling us where someone could bring a challenge in the baseline reliability project assessment stage.

[01:08:49] Speaker 07:
The commission has already told the Seventh Circuit that MISO's view is we want most if not all online within three years.

[01:08:57] Speaker 07:
That's not limited.

[01:08:59] Speaker 06:
I think because it has to meet the other market efficiency criteria.

[01:09:04] Speaker 07:
I'm just asking whether all reliability projects, virtually all, are really going to end up falling within this exception because I understand the rationale for why reliability, nobody wants reliability to take 10 years.

[01:09:18] Speaker 07:
The commission can't have it both ways.

[01:09:20] Speaker 07:
It can't say it's going to be a limited exception if in fact

[01:09:25] Speaker 07:
all, most if not all, to use your words, reliability projects are going to fall within this time period.

[01:09:32] Speaker 06:
But I don't think that's correct, Your Honor, that most, if not all, reliability projects will fall within that time period.

[01:09:37] Speaker 06:
In myself?

[01:09:37] Speaker 06:
Actually, right.

[01:09:38] Speaker 06:
I mean, actually, at J.A.

[01:09:40] Speaker 07:
321... Okay, I'm just quoting from what the Commission told us on the circuit.

[01:09:44] Speaker 06:
Right, so in this record... They told them other things, too.

[01:09:49] Speaker 06:
Right, Your Honor.

[01:09:51] Speaker 06:
I don't have before me the record in that proceeding, but here, testimony at JA 320 that it was estimated that this exception

[01:10:06] Speaker 06:
would impact approximately one baseline reliability project per MTEP cycle.

[01:10:12] Speaker 06:
And that's every one year transmission planning cycle within the mid-continent region.

[01:10:18] Speaker 06:
It's at the bottom of page 320.

[01:10:21] Speaker 07:
Is that proved true?

[01:10:26] Speaker 06:
I'm not sure, Your Honor, but that was the prediction that the commission was making on the record in this case.

[01:10:32] Speaker 07:
One out of how many?

[01:10:33] Speaker 07:
One out of how many?

[01:10:36] Speaker 07:
There are... They would qualify as market efficiency projects for which they could otherwise be put in.

[01:10:45] Speaker 06:
So one out of all of the projects in each of the transmission planning process cycles, which potentially could be hundreds, and Ms.

[01:10:53] Speaker 07:
Valley... No, no, no, no, no.

[01:10:54] Speaker 07:
No, we have to talk about how many that would qualify

[01:10:58] Speaker 07:
as a market efficiency project for competitive bidding.

[01:11:00] Speaker 07:
It doesn't say any good to say, well, it was just a baseline reliability project, because those have been carved off from competition.

[01:11:07] Speaker 07:
That's not a limited category for those that would qualify as other projects.

[01:11:11] Speaker 07:
That's certainly not a limited category.

[01:11:12] Speaker 07:
That's the majority of projects that MISO proposes now, for many years now, has been other projects.

[01:11:19] Speaker 07:
So that's what I'm asking.

[01:11:21] Speaker 06:
I'm not sure that that information is in the record your honor, at least I just saying one doesn't really tell us a lot.

[01:11:27] Speaker 06:
Right, those your honor and I, so I don't think that Alice power made the showing in its section 206 complaint that, as far as I'm aware you know there wasn't an adequate showing that that this.

[01:11:40] Speaker 06:
exception would swallow the rule.

[01:11:41] Speaker 06:
But in any event, the commission has made clear that the Order 1000 planning process is about process.

[01:11:50] Speaker 06:
It's not intended to dictate substantive outcomes.

[01:11:54] Speaker 06:
And that is one of the principles that the commission was operating under when it considered how these exceptions are

[01:12:05] Speaker 06:
being implemented in multiple regional system operators.

[01:12:10] Speaker 07:
I understand, but if you have a system operator who's committed to doing these things in three years or less, that seems a different situation than it should be.

[01:12:18] Speaker 07:
I just have one last question.

[01:12:19] Speaker 07:
I know we're way over time here.

[01:12:21] Speaker 07:
Back on standing, in their reply brief on page five, LSP says the record includes evidence of two regionally beneficial 161 kilovolt economic projects included in the 2018 MISO transmission expansion plan that petitioners were prohibited from competing for because they were designated other projects and didn't meet the voltage threshold.

[01:12:47] Speaker 07:
If they had cut and pasted that into a declaration, would that give them standing?

[01:12:56] Speaker 06:
I'm not sure, Your Honor.

[01:12:58] Speaker 06:
You know, I think.

[01:12:59] Speaker 07:
Why not?

[01:12:59] Speaker 07:
What part of your theory of standing doesn't it mean?

[01:13:02] Speaker 06:
You know, I think it would.

[01:13:06] Speaker 06:
Right.

[01:13:07] Speaker 06:
I think the declaration still would have to include some other information about the specific project that they had the ability to bid on it and that they otherwise satisfied Article 3.

[01:13:22] Speaker 07:
What else aren't you arguing?

[01:13:25] Speaker 07:
I mean, you're not arguing causation or redressability.

[01:13:29] Speaker 07:
All I've heard you argue about is injury in fact.

[01:13:32] Speaker 07:
And why isn't that an injury in fact?

[01:13:36] Speaker 06:
Right.

[01:13:37] Speaker 06:
In that scenario, yes.

[01:13:38] Speaker 06:
I mean, yes, the injury in it is arguing.

[01:13:43] Speaker 06:
Right.

[01:13:44] Speaker 06:
Right, Your Honor.

[01:13:46] Speaker 07:
How can you keep on them and do imminence and then they have to wait for another project to come along?

[01:13:51] Speaker 07:
They want to challenge your rule.

[01:13:53] Speaker 02:
Actually, there are a lot of assumptions underlying Judge Millett's questions and counsel.

[01:13:57] Speaker 02:
I don't think you're in a position to make concessions for the commission.

[01:14:03] Speaker 02:
That is right, Your Honor.

[01:14:04] Speaker 06:
I'm not in a position to make those concessions.

[01:14:07] Speaker 06:
OK.

[01:14:07] Speaker 07:
I thought she was in a position to argue Article III standing.

[01:14:16] Speaker 07:
That was my last question.

[01:14:19] Speaker 06:
OK.

[01:14:19] Speaker 06:
Your Honor, I just don't think that it has been demonstrated in the circumstances of this case.

[01:14:24] Speaker 06:
And I think that the petitioners could have made more of an effort to demonstrate its standing with greater specificity.

[01:14:34] Speaker 06:
In some I think the commission was balancing multiple considerations here.

[01:14:38] Speaker 06:
I mean it has to balance the interest is competition not just for the sake of competition but for you know it's also balancing the need, the reliability needs on the grid, it's balancing other public policy objectives and it's also.

[01:14:52] Speaker 06:
operating under the presumption that there is no one-size-fits-all approach for each region and that regional stakeholder processes do mean something.

[01:15:04] Speaker 06:
So it made the decision here that it was not unreasonable to have a voltage cutoff for this market efficiency project category.

[01:15:12] Speaker 06:
And I think that the orders reasonably explain the commission's findings.

[01:15:23] Speaker 02:
Thank you.

[01:15:25] Speaker 02:
Council for interveners.

[01:15:29] Speaker 04:
May it please the court.

[01:15:30] Speaker 04:
I am Carrie Valley for Mint Continents.

[01:15:32] Speaker 04:
appearing on behalf of interveners for respondent FERC.

[01:15:35] Speaker 04:
I think there are a lot of questions that have come up today regarding the MISO process and planning and how it works and the whole framework that's been presented in these cases.

[01:15:44] Speaker 04:
And so I have highlighted a few of those areas I'd like to touch on that were brought forward in this discussion and might just work back from where we most recently were.

[01:15:53] Speaker 04:
Certainly, we're later, the petitioners here have raised issues with the two projects in MTEP 18.

[01:15:59] Speaker 04:
that had benefits beyond the local zone.

[01:16:03] Speaker 04:
It's important to recall that MISO itself presented that analysis and that analysis demonstrated that the local zone in both of those cases had benefits in excess of cost.

[01:16:13] Speaker 04:
That meant the standard for meeting that the cost of benefits are roughly commensurate was met in both of those cases.

[01:16:19] Speaker 04:
And the circumstances that the decisioner have raised do not change that.

[01:16:25] Speaker 04:
When going to the issue of the specificity for making it standing case, the petitioner itself has raised these two questions and whether or not they could have indicated that they had an ability to, would have a bid on those projects.

[01:16:38] Speaker 04:
If that is the court's question, those projects and what they were, were certainly presented in our stakeholder process.

[01:16:45] Speaker 04:
And I believe that the petitioners could have made that case if they had intended on those cases.

[01:16:52] Speaker 04:
One, getting back to the most recent discussion on the immediate need reliability exception, it is very limited.

[01:16:59] Speaker 04:
The petitioner in its case outlined the total number of baseline reliability projects.

[01:17:06] Speaker 04:
That is not indicative of the projects that are going to be baseline reliability projects that also meet the MEP criteria.

[01:17:13] Speaker 04:
We expect that to be a very small universe.

[01:17:16] Speaker 04:
but nonetheless in the stakeholder process moving to present what should, if any cost allocation changes should we have, what do they look like?

[01:17:26] Speaker 04:
What are the improvements and what are the concerns that might arise from that?

[01:17:32] Speaker 04:
It arose in the stakeholder process that by lowering the voltage for market efficiency projects, you might incorporate more baseline reliability projects that met that MEP criteria.

[01:17:43] Speaker 04:
And I think I need to step back one moment

[01:17:45] Speaker 04:
Under the MISO project hierarchy, a project will be allocated based on its essentially highest value.

[01:17:53] Speaker 04:
So if you are a baseline reliability project and also meet a market efficiency project criteria, you're going to be allocated as a market efficiency project.

[01:18:02] Speaker 04:
And get competed.

[01:18:04] Speaker 04:
Exactly.

[01:18:05] Speaker 04:
Unless it's immediate need.

[01:18:07] Speaker 04:
Unless it is immediate need.

[01:18:08] Speaker 04:
And where we found here was that that universe of projects might bring up

[01:18:12] Speaker 04:
you know, a baseline reliability project that was needed within three years.

[01:18:16] Speaker 04:
And the commission has an established framework for saying, yes, we want to make sure that that reliability is not impaired by the competitive developer selection process that adds, you know, potentially a year, you know, to that, moving forward on that project.

[01:18:32] Speaker 04:
And so for this discrete number of projects.

[01:18:38] Speaker 07:
Sorry.

[01:18:40] Speaker 07:
Can you tell me,

[01:18:42] Speaker 07:
if it's really discreet, because that's where I'm getting mixed signals.

[01:18:46] Speaker 07:
I told you what the commission said, MISO has said, to the seventh circuit, most if not all baseline rely, I get that, but you were talking now about baseline reliability projects that elevate to market efficiency standards.

[01:19:01] Speaker 07:
So that's the framework we're talking about right now, that most if not all baseline reliability projects within MISO

[01:19:08] Speaker 07:
are completed within three years because MISO understandably wants to do reliability projects fast.

[01:19:17] Speaker 07:
I mean, that's why it's called a reliability project.

[01:19:21] Speaker 07:
Is that accurate or not accurate?

[01:19:22] Speaker 04:
It's not.

[01:19:23] Speaker 04:
I wouldn't say it's not what MISO wants.

[01:19:25] Speaker 04:
It's what comes out of the reliability study.

[01:19:28] Speaker 04:
So our planning process identifies a transmission issue

[01:19:32] Speaker 04:
then evaluates proposed solutions.

[01:19:35] Speaker 04:
And it is not only MISO solution or the owner solution, it is those things and any stakeholder can present an alternative in that process.

[01:19:44] Speaker 04:
So there is an ongoing process to evaluate those reliability needs and what that reliability need is and how it's going to be met.

[01:19:54] Speaker 04:
And so that is how that is identified.

[01:19:58] Speaker 07:
Some of those are near-term needs, and we want to make sure that those near-term needs- When you say some, I'm really trying to understand how many are done, are online within, for reliability projects.

[01:20:11] Speaker 07:
Yeah.

[01:20:12] Speaker 07:
You know, baseline, other projects, whichever one, market efficiency, how many are online

[01:20:21] Speaker 07:
At least at the time you're picking who's gonna develop it at the time of the developer selection or to be online with them or needed within three years.

[01:20:31] Speaker 04:
I'm not sure I'm exactly following your honor's question in terms of how many of those baseline reliability projects are presented with that three-year timeframe that it has to be in service.

[01:20:42] Speaker 04:
I don't know that exactly.

[01:20:45] Speaker 07:
I'm not asking exactly.

[01:20:47] Speaker 07:
Really, I'm trying to understand here whether

[01:20:51] Speaker 07:
this is in fact a limited category or not.

[01:20:54] Speaker 04:
Well, what is the limitation?

[01:20:56] Speaker 04:
Yes, yes.

[01:20:57] Speaker 04:
What is the limitation is that baseline reliability, the project that also meets a market efficiency project criteria.

[01:21:04] Speaker 04:
That is the big limiter.

[01:21:05] Speaker 07:
in this case that only for those baseline reliability projects, because other, but if, if, if all, if, if, if just to qualify as a baseline reliability project in practice, those are all coming online within three years or most, if not all are coming online within three years, then saying, well, it also counts as market efficiency, isn't going to change that fact.

[01:21:31] Speaker 07:
So,

[01:21:32] Speaker 04:
I don't know.

[01:21:34] Speaker 04:
I don't have that exact answer for you.

[01:21:38] Speaker 04:
What I would offer is that the baseline reliability projects generally are just baseline reliability projects.

[01:21:47] Speaker 04:
It is only we want to make sure for that instance where it is also a market efficiency project that we meet that reliability need.

[01:21:55] Speaker 04:
And I know your honor had asked the question of how many of these have there been?

[01:21:59] Speaker 04:
I mean, we had in our testimony that we expected maybe one per year.

[01:22:03] Speaker 04:
Uh, this tariff framework only became effective in 2020.

[01:22:08] Speaker 04:
We've only recently concluded the one planning cycle that came after this.

[01:22:13] Speaker 04:
And so we don't have any, um, in that cycle that meet that criteria.

[01:22:18] Speaker 04:
So we did not have one.

[01:22:23] Speaker 04:
We've only had one cycle since this year framework was fully effective.

[01:22:28] Speaker 04:
It became effective at the end of a process that had started significantly in advance of its effective date.

[01:22:36] Speaker 04:
We did not have those.

[01:22:38] Speaker 07:
But you've had baseline reliability projects for a long time.

[01:22:41] Speaker 07:
Yes.

[01:22:41] Speaker 07:
As to that category, do you know if, in fact, it was accurate to say most, if not all, are online within three years?

[01:22:48] Speaker 04:
I do not have that information.

[01:22:51] Speaker 02:
All right.

[01:22:52] Speaker 02:
Anything further?

[01:22:54] Speaker 04:
Yes.

[01:22:54] Speaker 04:
I would like to touch on a few other things that the- Briefly.

[01:22:58] Speaker 04:
Yes.

[01:22:59] Speaker 04:
Number one, the LEP project, or actually I'll touch on NIPSCO first.

[01:23:04] Speaker 04:
On what?

[01:23:06] Speaker 04:
The Interregional Market Efficiency Project between Mid-Continent and PJM.

[01:23:11] Speaker 04:
That is a unique circumstance.

[01:23:13] Speaker 04:
The court had been presented, or the commission had been presented in that case with evidence to suggest that these lower voltage projects could have congestion benefits to both regions.

[01:23:23] Speaker 04:
And based on that limited record in that case directed MISO to lower the voltage threshold for the only projects between Mid-Continent and PJM.

[01:23:32] Speaker 04:
Parties had argued for a broader application and the commission rejected it as there wasn't evidence to support a broader application.

[01:23:39] Speaker 04:
Those projects are, you know, as commission council had noted can be located in either region.

[01:23:45] Speaker 04:
They are intended to facilitate improved congestion between the two RTOs and are uniquely

[01:23:51] Speaker 04:
separate from or different from the regional MEPs.

[01:23:55] Speaker 04:
And when the commission had made that initial order, it did note that, you know, what was going to the cost allocation going to be?

[01:24:03] Speaker 04:
Was it going to be the same or different?

[01:24:05] Speaker 04:
And MISO came, moved forward and we had a lengthy commission preceding and exactly what that cost allocation would be.

[01:24:12] Speaker 04:
I also wanted to note that on the

[01:24:16] Speaker 04:
The causal connection, the petitioners in this case have raised a number of issues with economic other projects, but have identified no causal connection on a global basis.

[01:24:25] Speaker 04:
These economic other projects have region wide benefits.

[01:24:32] Speaker 04:
There were two projects identified and those projects also exhibited benefits and excessive costs to the local zone.

[01:24:39] Speaker 04:
And that is what is important to show that that existing cost allocation method continues to be effective.

[01:24:46] Speaker 04:
And then I did want to touch on a little bit about the local economic.

[01:24:53] Speaker 02:
You said you had two points.

[01:24:56] Speaker 04:
Um, one, I did want to touch on the local economic project category that was previously rejected by the commission.

[01:25:02] Speaker 04:
It's important to note that in that case, MISO and its stakeholders had attempted to create a new project category and presented it to the commission that was ultimately rejected.

[01:25:13] Speaker 04:
But in that case, that did not remove the other project category from the MISO tariff.

[01:25:18] Speaker 04:
That other project category cost allocation method was still eligible for projects that wouldn't have met that new project category.

[01:25:25] Speaker 04:
So that it's important that while we attempted to create a new framework, it ultimately was not successful.

[01:25:32] Speaker 04:
It did not change the fact that the existing cost allocation method for other projects is just unreasonable going forward.

[01:25:40] Speaker 02:
All right.

[01:25:42] Speaker 02:
Thank you, council.

[01:25:43] Speaker 01:
Thank you.

[01:25:44] Speaker 02:
All right.

[01:25:44] Speaker 02:
Council for petitioner.

[01:25:47] Speaker 01:
Thank you, your honor.

[01:25:47] Speaker 01:
I know the court's been at it for a long time this morning.

[01:25:50] Speaker 01:
I don't want to be respectful of your all's time.

[01:25:52] Speaker 02:
Right.

[01:25:52] Speaker 02:
Briefly.

[01:25:53] Speaker 01:
Yes.

[01:25:54] Speaker 01:
But I would like to talk about a little bit the relationship between northern Indiana and in northern Indiana.

[01:26:00] Speaker 01:
There were these projects, the commission found there were significant regional benefits between the two regions, between the two regions, and the commission relied on a quote unquote

[01:26:13] Speaker 01:
quick hit study.

[01:26:15] Speaker 01:
And that study showed that the projects 138 to 161 KV had significant regional benefits in both regions.

[01:26:24] Speaker 02:
The only difference- And how did that help you, Council?

[01:26:27] Speaker 01:
Because the only difference in this case, Your Honor, is that our projects are, this project is only in the MISO.

[01:26:35] Speaker 01:
It's solely within the MISO.

[01:26:37] Speaker 01:
And in the Northern Indiana case, they were talking about inter-regional market efficiency projects

[01:26:43] Speaker 01:
under the PJM-MISO Joint Operating Agreement.

[01:26:46] Speaker 02:
And what are your projects?

[01:26:49] Speaker 01:
Our projects are solely within MISO.

[01:26:52] Speaker 02:
What projects?

[01:26:53] Speaker 02:
Your clients don't have any.

[01:26:55] Speaker 02:
You're talking about market efficiency projects?

[01:26:58] Speaker 01:
Yes, market efficiency projects, Your Honor.

[01:27:00] Speaker 02:
All right.

[01:27:00] Speaker 02:
So you're saying within what?

[01:27:03] Speaker 02:
There are only two.

[01:27:04] Speaker 01:
No, Your Honor.

[01:27:05] Speaker 01:
What we were saying is they did this quick hit analysis

[01:27:09] Speaker 02:
That was in the Indiana case.

[01:27:11] Speaker 01:
That was in the Indiana case.

[01:27:12] Speaker 01:
In our case, they looked at 10 projects in the MISO stakeholder process.

[01:27:18] Speaker 01:
Right.

[01:27:18] Speaker 01:
All 10 of those projects were between 100 and 229 KV and all 10 of those projects had regional benefits.

[01:27:26] Speaker 01:
Benefits to the project where the project was located and also to other regions within the MISO.

[01:27:35] Speaker 02:
Did they outweigh local benefits in the Commission's expert opinion?

[01:27:41] Speaker 01:
Your Honor, the solicitor, the Commission never said in this case that it's okay because the local zone benefits more

[01:27:53] Speaker 01:
than they benefit more than their cost.

[01:27:56] Speaker 01:
They never said that.

[01:27:57] Speaker 01:
And I think there's a good reason why they didn't say that, because they can calculate the benefits.

[01:28:02] Speaker 01:
And so first of all, it's a post hoc rationalization on the part of FERC.

[01:28:07] Speaker 02:
Well, did you present evidence to the commission?

[01:28:10] Speaker 01:
We showed that the 10 projects that were in the stakeholder process, the two projects, we also showed the connection in the Northern Indiana case.

[01:28:20] Speaker 01:
We also showed the connection between congestion

[01:28:23] Speaker 01:
and the projects that solve the congestion.

[01:28:25] Speaker 02:
All right.

[01:28:26] Speaker 02:
Anything new, Council?

[01:28:29] Speaker 01:
No, Your Honor.

[01:28:30] Speaker 02:
We'll find it in the record.

[01:28:32] Speaker 01:
Yes, Your Honor.

[01:28:32] Speaker 02:
Thank you, Council.

[01:28:34] Speaker 01:
Thank you, Your Honor.

[01:28:35] Speaker 02:
Thank you all, Council.

[01:28:37] Speaker 02:
We'll take the project.

[01:28:39] Speaker 02:
We'll take the cases under consideration.

[01:28:43] Speaker 02:
Thank you.