Distributed Energy Resources (DER) developers in MISO are navigating a shifting landscape.
Previously, they worked exclusively with distribution companies for interconnections—for instance, Community Solar Garden developers collaborating directly with Xcel Energy in Minnesota. However, MISO’s introduction of the DER Affected Systems Study (AFS) process in 2023 has added complexity, leading to delays and uncertainty, particularly as Michigan utilities now seek an opt-out from the process, citing cost and redundancy.
Understanding the DER Affected Systems Studies
During FERC Order 2222 compliance proposal discussions with stakeholders, MISO first proposed the concept of DER Affected Systems Studies for DER Aggregations at the Interconnection Process Working Group stakeholder meeting in September 2021. Initially, MISO had defined DER Aggregations as DERa, which was changed to Distributed Energy Aggregated Resource DEAR when MISO filed its first compliance plan with FERC in April 2022.
Before settling on the current threshold of pass/fail criteria for DERs net injection greater than 5 MW and transmission line loading change of 1%, MISO provided stakeholders with several options, including DERa maximum power injection onto transmission based on magnitude or percentage of substation capacity, DERa nameplate capacity and short-circuit ratio.
The MISO DER AFS Study has three major steps: Transmission Owner Screening, MISO Screening, and Study. MISO conducts these studies quarterly. Currently, it is conducting 2024-Q4 studies. In this 2024-Q4 study, developers are waiting for the initial results of MISO Screening by December 16, 2024. The 2024-Q4 Screening window opened in September.
Transmission owner screening
When a DER seeks interconnection at the distribution system of an Electric Distribution Company, MISO expects the EDC to flag the DER interconnection at the respective Transmission Owner (TO). The TO is expected to screen the DER interconnection first, before reporting to MISO.
Suppose the TO finds that the net injections from DER exceed 0 MW at the substation. In that case, the TO must submit the request to MISO, providing information on the substation name, the corresponding MISO model bus number, and the DER capacity in MWs. The MISO model for conducting this DER AFS Study is the latest DPP Phase 3 model available at the time the DER AFS Study cycle starts.
MISO Screening
The next step after TO Screening is MISO Screening in the DER AFS Study process. MISO will perform initial screening levels on all the substations flagged by the TO and use the same screening level assumptions as TOs. First, MISO will identify substations that exceed 5 MW net injections and flag them for study in the next quarterly DER AFS cycle.
Next, for those substations that have net injections within the 0-5 MW range, MISO will apply the 1% transmission line loading change criteria. Substations that exceed that criteria are flagged for the next quarterly DER AFS cycle.
MISO DER AFS study
Developers must pay a $60,000 deposit to the TO for each substation requiring a MISO study. Once MISO invoices the TO and TO pays MISO, and TO and MISO enter into an agreement, then MISO conducts steady state analysis and determines whether the DER Interconnection customer is responsible for transmission upgrades.
According to MISO, no transmission upgrades were identified in MISO’s previous cycles, Cycle 1–DER-2023-Q4 and Cycle 2-DER-2024-Q1.
MISO DER Affected Systems Studies are not FERC-approved
The DER Affected Systems Studies (AFS Study) that MISO initially proposed were not included in the FERC Order 2222 compliance plan. MISO told FERC that the details of the AFS Study are best left to the Generator Interconnection Business Practices Manual. After FERC decided on MISO’s first compliance plan in October 2023, and MISO filed its second compliance plan in May 2024 in response to FERC’s decision, it remains to be seen whether FERC approves MISO DER Affected Systems Studies and, if so, requires MISO to include the details in the tariff or, as MISO indicated, is best left up to the Business Practices Manual.
FERC had asked MISO whether this DER Affected Systems Study is similar to a generator interconnection study, an EDC safety and reliability study, or an entirely different study. I don’t believe any other ISO has defined or included a study similar to MISO’s DER AFS Study in the Order 2222 compliance proposal.
Michigan is seeking an opt-out from MISO DER Affected Systems Studies
While waiting for FERC’s decision on whether the MISO DER AFS Study process belongs to the Tariff or BPM, Michigan Transmission Owners are seeking an opt-out of MISO’s DER AFS Study process. Michigan’s opt-out request underscores a broader debate over balancing local control with regional market integration—a challenge that could shape FERC’s ultimate decision on MISO’s DER AFS process. In multiple presentations to the MISO Planning Advisory Committee, Michigan TOs have told MISO that MISO’s DER AFS Studies are burdensome, duplicative of the more comprehensive existing TO studies, create unnecessary costs, and have the potential to limit DER deployment in Michigan significantly.
Representatives from Consumers Energy, Detroit Edison, ITC Holdings, and Wolverine Power have petitioned MISO in the stakeholder process to update the BPM to include an opt-out provision. This issue has been formally submitted to MISO, and the MISO stakeholder process must assign a stakeholder committee to work on this topic. If Michigan’s opt-out request gains traction, it could prompt other states to seek similar exemptions, potentially undermining the uniformity of MISO’s approach to DER interconnections.
Ultimately, MISO’s DER AFS Study raises fundamental questions: Will it streamline DER market participation or introduce new hurdles? How will FERC’s decision shape the balance between local control and regional oversight?
