A yearslong dispute over who gets to own a 345-kV network upgrade in Michigan had the D.C. Circuit Court of Appeals meditating on the definitions of “system” versus “facility.”

Ultimately, the D.C. Circuit decided that Michigan Electric Transmission Co. (METC) does not have exclusive ownership rights to an almost $12.4 million upgrade to support EDP Renewables’ in-progress 120-MW Eagle Creek Solar Park (24-1039).

The court’s July 1 order means that Michigan Public Power Agency (MPPA) and Wolverine Power Supply Cooperative, as fellow co-owners of the existing Styx-Murphy 345-kV line, also should have a stake in the line’s extension and new substation construction.

The D.C. Circuit examined the semantics of MISO’s Transmission Owners Agreement to reach its conclusion. METC argued it should be the sole owner of the upgrades because they will be located within its larger transmission system. It also said that 33-year-old agreements bestowing partial line ownership to MPPA and Wolverine don’t extend to network upgrades on the line.

Wolverine owns 64% of the Styx-Murphy line, while MPPA owns 35% and METC owns 1%. MPPA and Wolverine acquired their ownership in 1992 through an antitrust settlement agreement to limit Consumer Energy’s market power in the Lower Peninsula. METC, meanwhile, purchased its stake from Consumers in 2020.

METC argued that the circumstances behind MPPA and Wolverine’s ownership made them ineligible for network upgrade ownership interest. It argued the two have “limited grants of ownership” on the line that permit them to transmit certain megawatt flows over METC’s larger system and nothing more.

METC also said per the MISO Transmission Owners Agreement, the line qualifies only as a “facility” and not a “system.” METC said the distinction between the phrases means it, as the owner of the larger system, is entitled to the network upgrade, not MPPA and Wolverine, which merely own a facility on its system.

FERC previously determined that no agreement related to the Styx-Murphy line “conclusively” established exclusive ownership. The three utilities have been disputing ownership rights of the upgrade since 2023. (See FERC Rejects MISO Solar Farm Interconnection Agreement, TO Challenges Upgrades Ownership.)

The D.C. Circuit agreed that the context of Wolverine and MPPA’s rights to the line didn’t make them less worthy of owning generator interconnection-related network upgrades. The court also said a dictionary reading of “system” versus “facility” does not “demarcate as sharp a distinction … as METC would like.” It said previous FERC orders METC cited as proof “merely refer to METC’s ‘transmission system’ and the Styx-Murphy line as a ‘facility’ without reference” to specific sections of the MISO Transmission Owners Agreement.

The court said METC’s rigid interpretation would mean that MISO Transmission Owners who own a single facility would be barred from ever constructing or owning a network upgrade for a generation interconnection, which is not the case.

“It would make no sense for the other TO signatories or for MISO itself to discriminate in this manner against the owner of only one facility,” the court reasoned.

The D.C. Circuit said it agreed with the commission that METC couldn’t claim ownership of an upgrade to a line it doesn’t completely own “simply because that existing facility was located within its ‘system.’”

“That result ‘would ignore the ownership, and responsibilities, of the actual owner(s) of the existing transmission facilit(ies),’” the court said, quoting FERC. It also said it would render a portion of MISO’s Transmission Owners Agreement “meaningless.”

The court seconded FERC’s conclusion that the history behind MPPA and Wolverine’s ownership provisions wouldn’t exclude them from owning network upgrades on the line. It said the antitrust agreements conferred “unrestricted pro rata ownership in the Styx-Murphy line” which enables them “to compete on an equal footing with other TOs.”

“Limiting the agreements as METC requests … could only help entrench rather than restrain METC, an effect at odds with the pro-competitive purpose of the agreements,” the court said. It added that it could not tack on a “new prohibition” to the decades-old agreements.

METC, meanwhile, has been building the network upgrades to support Eagle Creek.