The Federal Energy Regulatory Commission has approved a cost allocation framework allowing the Midcontinent Independent System Operator to advance transmission projects built within PJM Interconnection's territory, with the decision announced Friday, Aug. 14, 2026. The ruling clears the way for approximately $909 million in infrastructure investments and rejects industry demands that the work be subject to competitive bidding. The framework addresses a unique challenge in grid planning: when one regional operator needs upgrades built in another operator's footprint.
Under the approved arrangement, Exelon's Commonwealth Edison will construct one set of projects valued at roughly $904 million, while Duke Energy's Ohio utility will build an additional $5.3 million in facilities. These projects originated from MISO's Tranche 2.1 plan, which includes construction of a 765-kilovolt transmission backbone spanning the grid operator's Midwest region and received board approval in December 2024. The plan required transmission upgrades inside PJM's service area to function properly. Both the Electricity Transmission Competition Coalition and the Industrial Energy Consumers of America pushed for the PJM-area work to go through MISO's competitive bidding process rather than being assigned directly to the two utilities, but FERC rejected that approach.
The commission stated it was "not persuaded" by arguments that skipping competitive selection would reduce transparency, worsen cost allocation issues, undermine market solutions, or forfeit potential savings. FERC concluded that MISO lacks the authority to facilitate or mandate transmission development in another region's territory. In a joint concurring statement, commissioners Judy Chang and David Rosner wrote that "the most beneficial and cost-effective solutions for one region's system needs may include transmission upgrades in another region's footprint," with benefits including "improved reliability, reduced congestion costs, and more efficient resource integration."
Chang and Rosner emphasized that existing grid operator rules haven't kept pace with growing interregional transmission needs. The commissioners noted that MISO's efforts to ensure construction "demonstrate the importance and value of interregional transmission projects even while the existing tariff's legacy definitions for various types of transmission projects presented limitations." They called for transmission planners to make cross-regional projects a "more regular and intentional feature" of planning work. Greater connectivity between regions would let them share resources more efficiently, soften the blow from extreme weather, accelerate connections for new demand and energy resources, and reduce collective infrastructure spending, the commissioners said.