## Facts

- MISO, a regional transmission organization, proposed a tariff framework for “multi-value projects” (MVPs): high-voltage transmission upgrades intended to support renewable integration, reliability, and regional economic benefits.
- The MVP designation depended on criteria including a minimum cost threshold, use of high-voltage facilities, and a showing that a project would support renewable standards, address reliability, or produce net economic benefits across multiple pricing zones.
- MISO proposed recovering MVP costs through a region-wide “MVP usage charge,” allocating costs across all MISO load rather than primarily to utilities geographically near the new lines.
- FERC approved the MVP framework and cost allocation under the Federal Power Act, finding the resulting rates just and reasonable and not unduly discriminatory.
- State commissions and utilities (including Illinois and Michigan entities) sought judicial review, arguing the cost allocation forced some utilities to pay for projects from which they would receive insufficient benefits.
- Michigan objectors additionally argued that Michigan law limited credit for out-of-state renewable energy toward Michigan’s renewable mandate, so Michigan utilities should not pay for MVPs outside Michigan.

## Issues

1. Whether FERC reasonably found MISO’s region-wide MVP cost allocation “just and reasonable” and supported by substantial evidence, including that costs are roughly commensurate with benefits.
2. Whether FERC acted unlawfully or arbitrarily by requiring Michigan utilities to pay region-wide MVP costs for out-of-state projects given Michigan’s statutory limits on counting out-of-state renewables toward state compliance.
3. Whether FERC could approve a uniform regional cost-allocation method for a class of forward-looking transmission projects with diffuse, long-term benefits.

## Decision

- The court denied the petitions for review and upheld FERC’s approval of the MVP framework and region-wide cost allocation.
- The court held that FERC reasonably concluded MVP benefits were broadly shared across the interconnected grid and that regional cost spreading could satisfy cost-causation principles.
- The court found the record adequate for FERC’s predictive and technical findings about reliability, congestion relief, and economic benefits; perfect benefit tracing to each payer was not required.
- The court rejected Michigan’s effort to use state renewable-credit rules to avoid paying for FERC-approved regional transmission facilities, noting that state law could not control interstate transmission cost allocation under a federally filed tariff.

## Legal Principles

- Under the Federal Power Act, transmission cost allocation must be “just and reasonable” and not unduly discriminatory; costs must be at least roughly commensurate with benefits, not precisely proportional.
- FERC may approve region-wide (postage-stamp) allocation for a project class when substantial evidence supports that benefits are regional rather than local.
- Courts generally defer to FERC’s reasonable technical and predictive judgments in transmission planning and cost allocation when grounded in the record.
- State statutes and policy preferences cannot exempt in-state utilities from sharing costs of interstate transmission facilities approved through federal regulation, even if the state’s renewable-compliance rules differ.

## Conclusion

The Seventh Circuit sustained FERC’s approval of MISO’s MVP tariff and region-wide cost allocation, holding that FERC reasonably found broadly shared regional benefits sufficient to make the charges roughly commensurate with benefits, and that Michigan’s state-law renewable-credit limits could not bar regional cost sharing for federally approved transmission projects.


Illinois Commerce Comm'n v. FERC, 721 F.3d 764 (7th Cir. 2013)