The Federal Energy Regulatory Commission has approved a MISO cost-recovery plan that allows the grid operator to collect revenue for transmission projects physically located in PJM territory, rejecting arguments that the projects should have been subject to competitive bidding. The decision directly affects Exelon and Duke Energy utilities and establishes a consequential precedent for how costs are allocated across regional transmission organization boundaries, effectively blessing an incumbent-utility model for interregional infrastructure rather than opening it to market competition.
The ruling centers on a long-standing tension in eastern grid planning: MISO and PJM operate adjacent footprints but plan transmission separately, and projects that cross their seam have historically struggled to find a clear cost-allocation framework. MISO’s plan sought to recover costs for upgrades built in PJM that primarily benefit MISO customers — a configuration that complicates the traditional beneficiary-pays principle. By approving the arrangement without mandating a competitive solicitation, FERC signaled that negotiated interregional agreements between incumbent utilities can satisfy its Order 1000 requirements for regional planning participation, even when the physical assets sit outside the sponsoring RTO’s footprint.
Critics, including independent developers and consumer advocates, argued that bypassing competition risks inflating costs and entrenching incumbent advantages. They pointed to FERC’s own Order 1000, which aimed to introduce competitive tension into transmission development by requiring RTOs to consider non-incumbent proposals for certain projects. The commission’s majority, however, found that MISO’s agreement with PJM and the affected utilities represented a valid “joint planning” outcome that met the rule’s intent, emphasizing the practical difficulties of forcing a competitive process across two distinct planning processes with different tariffs, stakeholder structures, and cost-allocation methodologies.
The decision arrives as transmission buildout faces mounting urgency from load growth, generator interconnection backlogs, and decarbonization mandates. Interregional projects are widely seen as essential to unlocking renewable resources and improving reliability, yet they remain the hardest to permit, site, and finance. By validating a bilateral utility agreement over a competitive process, FERC may have smoothed the path for similar arrangements — but it also risks cementing a fragmented approach where each seam is negotiated bilaterally rather than through a coherent, market-driven framework. The long-term test will be whether this precedent accelerates needed infrastructure or simply replicates the planning silos that Order 1000 sought to dismantle.
Read the full report at Utility Dive.