Friday, August 18, 2017

SPP Hopes Congestion Rights Rule Change Wins FERC OK

By Tom Kleckner

TULSA, Okla. — SPP’s Markets and Operations Policy Committee approved a revision request to comply with FERC guidance on the RTO’s disparate treatment of point-to-point (PTP) and network integration transmission service (NITS) during periods of redispatch.

MRR202 would allow NITS to be eligible for auction revenue rights for limited times of the year and only for the service not subject to redispatch. NITS would not be eligible for long-term congestion rights (LTCRs), because it does not have continuous service for the entire transmission congestion rights year.

spp ferc congestion rights

The change is in response to FERC’s September order that raised concerns that allowing network service subject to redispatch prior to necessary upgrades being constructed could result in a decrease in allocated ARRs for other transmission customers, along with their ability to nominate LTCRs. The commission ordered a Section 206 proceeding and directed SPP to limit the eligibility for network customers’ ARRs and LTCRs with service subject to redispatch. (See FERC: SPP Treating P2P Customers Unfairly on Congestion Rights.)

“Our preliminary review indicates that SPP should not provide network service customers subject to redispatch with any LTCRs until the transmission upgrades are placed into service and the service is no longer subject to redispatch,” FERC said in the order (ER16-1286, EL16-110). “The commission notes that this approach would be consistent with SPP’s rationale for not providing point-to-point customers subject to redispatch with LTCRs.”

The 206 proceeding sought to determine whether NITS subject to redispatch while necessary transmission upgrades are being constructed should warrant the same treatment as PTP. SPP responded in December, asking that it be allowed to run the issue through the stakeholder process before FERC takes action.

Stakeholders rejected SPP’s recommended approach to allow ARRs until the end of the allocation year following the revisions’ effective date. With the change, eligibility limitations only apply to new NITS service after effective date, and current NITS service is “grandfathered” to receive current treatment for the service’s term.

SPP staff said it was concerned with the network service exemption because it interprets the order to mean that FERC is exempting awarded ARRs, and future nomination processes should treat NITS and PTP similarly.

“The way we interpret it, FERC is saying any firm transmission service with redispatch should be able to nominate for ARRs or LTCRs, period,” said Richard Dillon, SPP’s director of markets. “You can’t pull them back, but you don’t issue any more.”

Enel was the lone member to oppose the motion, saying the Tariff changes should apply prospectively to FERC’s refund date of Sept. 29, 2016. It proposed its own approach to a LTCR allocation methodology, which it said would ensure firm customers not subject to redispatch are given priority eligibility.

“We believe FERC was very clear that SPP’s method of allocating ARRs and LTCRS is unjust and unreasonable,” said Enel’s Lisa Szot.

Oklahoma Gas and Electric’s David Kays, chair of the Regional Tariff Working Group, said about 75% of the stakeholders’ recommended language aligns with FERC’s directive. “Where it’s different is the next allocation period,” he said. “That’s where it deviates from FERC’s suggested language.” The working group backed the changes.

Asked why SPP did not just use FERC’s suggested language, Dillon said the commission’s language is “80% of the way there.”

“We added … a single sentence that grandfathered the historical network dispatch,” he said. “FERC found that ARRs granted to customers should not continue past the current year. We’re saying that the effective date should be as of Sept. 29, 2016, or the date FERC issued its order in this proceeding.”

Staff said the commission intends to issue a final order by May, assuming it has a quorum by then.

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