Michigan PSC to hold hearing on request to reclassify transmission assets

The Michigan Public Service Commission (MPSC) will hold a public hearing on Dec. 18 to consider Wolverine Power Supply Cooperative’s application, which requests MPSC approval to reclassify certain assets from “Excluded Transmission” to “Included Transmission” under the “Seven Factor Test” created by FERC.

Wolverine represents that it is seeking MPSC approval to reclassify those assets to benefit its customers by providing for consistent and clear regulatory treatment for similar types of assets throughout the state, the MPSC added in its Nov. 18 notice of hearing, according to TransmissionHub.

Any person wishing to intervene and become a party to the case is to file a petition to intervene with the MPSC by Dec. 11.

In its Nov. 4 application, Wolverine noted that the Seven Factor Test was created by FERC in Order No. 888 and FERC’s comparability standard for the Michigan Joint Zone referenced in Wolverine’s initial Seven Factor Test analysis for classification of certain facilities as transmission in MPSC Case No. U-13862 and FERC Docket No. ER02-2458.

The seven factors are:

·      Local distribution facilities are normally in close proximity to retail customers

·      Local distribution facilities are primarily radial in character

·      Power flows into local distribution systems; it rarely, if ever, flows out

·      When power enters a local distribution system, it is not recognized or transported on to some other market

·      Power entering a local distribution system is consumed in a comparatively restricted geographical area

·      Meters are based at the transmission/local distribution interface to measure flows into the local distribution system

·      Local distribution systems will be of reduced voltage

Wolverine noted that it is a Midcontinent ISO (MISO) transmission owner with a transmission system consisting of about 1,200 miles of looped 69-kV and 138-kV transmission lines and associated facilities (the “Included Transmission facilities”). Those facilities are part of the Michigan Joint Zone (MJZ) under Attachment O of MISO’s open access transmission tariff, as are certain excluded transmission facilities whose use by third parties is priced separately under FERC-approved wholesale distribution service agreements entered into under Schedule 11 of the MISO tariff.

An April 2005 revised administrative determination issued by the MPSC (Case No. U-13862) classified Wolverine’s looped transmission assets as included transmission and all of its other transmission assets as excluded transmission. FERC affirmed that determination and approved a settlement agreement for the classification of Wolverine’s assets in August 2006 (FERC Docket No. ER02-2458).

Under the MPSC’s revised determination, these facilities were classified as included transmission:

·      138-kV looped line facilities

·      138-kV transmission stations

·      138/69-kV interconnection facilities

·      69-kV looped line facilities

·      69-kV stations and equipment except excluded transmission facilities

These facilities were classified as excluded transmission:

·      69-kV radial lines

·      69-kV line switches at radial taps serving distribution substations

·      69-kV breaker/recloser stations on radial lines

·      Generation step-up facilities

·      69-kV transmission stations with only two looped line terminations, no matter how many radial lines terminate at the station

·      Fairview substation, a three-breaker station that falls outside those definitions

Wolverine also noted that the MPSC last October issued an order approving a settlement agreement between MPSC staff, Consumers Energy, Michigan Electric Transmission Co. and Wolverine (the parties) authorizing the reclassification of certain of Consumers Energy’s distribution assets as transmission pending FERC’s approval of Consumers Energy’s reclassification of those assets as transmission (Case No. U-17598).

The parties agreed that Wolverine’s “Group A Assets” and “Group B Assets” identified in the settlement agreement are comparable to Consumers Energy’s assets authorized for reclassification as transmission in accordance with FERC’s comparability standard.

The first category, Group A Assets, consists of 11 substations integrated into Wolverine’s 69-kV transmission looped lines. Those substations include equipment such as circuit breakers, switches and buswork. The total plant balance of the Group A Assets is about $4.4 million, and the corresponding accumulated depreciation is about $1.3 million. Thus, Wolverine added, the net plant value of those assets is $3.05 million, Wolverine added.

The second category, Group B Assets, consists of 68 line segments and five substations connecting Wolverine’s 69-kV looped transmission system to its bulk electric power substations. The total plant balance of those assets is about $19.1 million, and the corresponding accumulated deprecation is about $6.3 million. The net plant value is about $12.9 million, Wolverine added.

Among other things, Wolverine said that the reclassification will benefit its customers by providing for consistent and clear regulatory treatment of its assets. Also, Wolverine will include those assets in its Attachment O of the MISO tariff consistent with the current treatment of Wolverine’s existing included transmission facilities. In addition, Wolverine said that approval of its application would be just and reasonable, as well as in the public interest.

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