Wednesday, September 20, 2017

SPS, SPP Ask Texas to Rule on Transmission Competition

By Tom Kleckner

Southwestern Public Service and SPP have asked Texas regulators to rule on whether Texas law includes a right of first refusal that overrides FERC Order 1000 (Docket No. 46901).

At issue is who will build a 90-mile, 345-kV line from Potter County to SPS’ Tolk Generating Station in the Texas Panhandle. Without a state ROFR, the project would be open to competitive bidding under Order 1000.

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Tolk Generating Station | Xcel Energy

SPS and SPP asked the Public Utility Commission of Texas to determine whether the RTO can designate entities other than the incumbent utility to construct and own regionally funded transmission facilities in Texas outside the ERCOT service area.

SPS contends in the Feb. 28 filing that the Public Utility Regulatory Act (PURA) allows it, as the incumbent utility operating outside ERCOT, the ROFR to build in the service area prescribed by the PUC. That would prevent a potential competitive project under Order 1000.

SPP says there is “no clear statement in Texas laws” that incumbent utilities have such a right, and it is following the Tariff’s competitive bidding process until the commission “can resolve the issue as a matter of law.”

The ruling will determine who gets to build the Potter-Tolk line — the only one of 14 projects in the Integrated Transmission Planning 10-Year Assessment not approved by SPP’s Board of Directors and Members Committee in January. The board requested the project undergo further study and be brought back to its April meeting. (See “Board Sends $144M Tx Project Back for Re-evaluation,” SPP Board of Directors/Members Committee Briefs.)

SPS filed a lawsuit in a Texas state district court Jan. 18 seeking approval of its right to build the project and other 345-kV projects in its Texas service area. The utility also sought an injunction prohibiting SPP from issuing a notification-to-construct for the Potter-Tolk line to any company other than SPS.

However, the utility and SPP both agreed to temporarily suspend the lawsuit Feb. 27 and file with the PUC instead.

SPS spokesman Wes Reeves said the lawsuit against SPP and the subsequent PUC filing “are not … adversarial in nature.”

“We simply seek clarity on our first right as a non-ERCOT utility to construct and operate regionally funded transmission lines within our service area,” Reeves said.

In a statement, SPP General Counsel Paul Suskie said the two entities agree Texas law is unclear on ROFR issues.

“Our joint filing has been made with the intention of addressing that uncertainty,” Suskie said.

In Order 1000, FERC explicitly acknowledged that it could not override state ROFRs. SPS contends PURA’s legislative history confirms “transmission-only utilities are not permitted outside of ERCOT,” and that any holder of a certificate of convenience and necessity must “serve every consumer in the utility’s certificated area” and “provide continuous and adequate service in that area.”

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SPP asserted that because no local Texas laws or statues would be violated by its competitive bidding process, it would treat the Potter-Tolk line as a competitive upgrade and would seek bids for the project.

The parties proposed an intervention deadline of 30 days following the petition’s publication in the Texas Register, set for March 17. Given the proposed schedule, it’s all but certain there will be no resolution before SPP’s April board meeting.

An administrative law judge gave the PUC until March 16 to file comments or make a recommendation. The PUC’s next scheduled meeting is March 9.

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