Friday, December 14, 2018

Wind Groups Challenge SPP Exit Fee

By Tom Kleckner

The American Wind Energy Association and The Wind Coalition have asked FERC to eliminate SPP’s “exorbitant” exit fee, saying it is a barrier to membership for independent power producers and others that do not own transmission or serve load (EL19-11).

The two wind energy advocacy groups filed a Section 206 complaint on Nov. 2 asking FERC to find the “Financial Obligations of Withdrawing Members” section of SPP’s bylaws and membership agreement unjust and unreasonable.

SPP

The Wind Coalition’s Steve Gaw shares his opinion at an SPP stakeholder meeting, as SPP’s David Kelley listens. | © RTO Insider

AWEA and The Wind Coalition said that, based on conversations with SPP staff, the exit fee charged to any non-TO or non-load-serving entity seeking to terminate its membership “could range from $700,000 to $1 million.” They noted that the exact amount is not known prior to termination, making it impossible for potential members to gauge their exit fee when considering membership in the RTO.

SPP said it is reviewing the complaint and will file a response at FERC, but it also told RTO Insider that the exit fee’s calculation is based on factors that include debt and financial obligations at the time of exit. A spokesman said the obligations “trend downward over time” and that the RTO frequently provides withdrawal estimates “to the dollar” for members.

The wind groups said the exit fee is “almost entirely intended to cover SPP’s existing and future obligations, which are unrelated to the exiting member.” They alleged exiting members are subsidizing future members’ business in the RTO, paying for costs for which they will receive no further benefit once they withdraw and for those they did not cause.

The groups also said SPP’s exit fee is unique among all other RTOs and ISOs, saying “no other organized market imposes general RTO/ISO costs on non-TO/non-LSE members through membership fees.” They said other grid operators only consider the withdrawing member’s open positions in the markets.

SPP

Wind farms and other independent power producers oppose SPP’s hefty exit fee.

“Other markets merely charge exiting members a nominal amount related to their obligations,” AWEA spokesman Evan Vaughan said. By discouraging participation from non-TOs and non-LSEs, Vaughan said, “consumer advocates, independent power producers, power marketers, energy storage, demand response and environmental groups are all, in effect, excluded from the decision-making process in SPP.”

“Membership in SPP is a meaningful designation,” the wind groups said in their complaint, referring to membership votes for SPP’s Board of Directors and initiatives, serving on stakeholder groups, and filing revision requests to change the Tariff.

“Simply put, without the ability to vote on SPP or provide leadership on SPP committees, non-members typically are unable to influence policy in a direction that considers or reflects their interests,” they argued. Noting SPP’s frequent claims to being a member-driven organization, they said “membership and the rights that it entails are critical.”

“We recognize the value of the diverse perspectives of our members and non-members, which is why we welcome them into our transparent stakeholder process,” SPP General Counsel Paul Suskie said in a statement.

Suskie noted SPP’s governance structure and the exit fee provision have been approved by FERC.

The Wind Coalition’s Steve Gaw speaks up. | © RTO Insider

The wind groups agreed that SPP allows non-members to comment on initiatives and participate in the stakeholder processes, but they said, “Such participation is not the same as having membership rights.”

The Wind Coalition’s Steve Gaw, a founding member of SPP’s Regional State Committee as a Missouri regulator, is a regular attendee and frequent contributor to the discussion at stakeholder meetings. Gaw has long been open about his dissatisfaction with the exit fee, which has earned him playful ribbing from some members.

“We have been asking for changes to the exit fee in the SPP stakeholder process for several years, however, no changes have moved forward,” Gaw told RTO Insider via email.

Top