On July 15, 2010, the Federal Energy Regulatory Commission (“FERC” or the “Commission”) conditionally approved the Southwest Power Pool, Inc’s (“SPP”) modified transmission planning process, the Integrated Transmission Plan (“ITP”).   The ITP will be used to determine future regional transmission needs.

On May 17, 2010, SPP filed its proposal to revise its Open Access Transmission Tariff (“OATT”) to include the ITP.  Currently, SPP implements its Transmission Expansion Plan (“STEP”) each year to plan ahead for transmission needs.  STEP identifies both reliability and economic upgrades, and it accounts for upgrades paid for by SPP stakeholders and upgrades requested by customers during open seasons.  SPP also has created a plan for building extra high voltage (“EHV”) transmission line to reduce congestion and help transfer power within the region.  In January 2009, SPP created a team to recommend improvements to SPP’s transmission planning process.  The team recommended: 1) creating an integrated planning process, 2) adopting the Highway/Byway cost allocation methodology, and 3) identifying a list of priority EHV projects.  SPP developed the ITP based on the team’s recommendations.

The ITP calls for three different categories of transmission planning: 20-Year, 10-Year, and Near-Term Assessments.  Once projects are identified through the ITP process, the project can recover costs through the recently approved Highway/Byway cost allocation plan (see the June 18, 2010 edition of the WER).

Part of the ITP calls for SPP to conduct transmission planning forums to define the scope of each assessment.  At the beginning of each calendar year, SPP will announce which parts of the ITP cycle will take place during that year and the approximate timing of activities required to develop the STEP.  The Near-Term Assessments will focus on reliability and compliance with the mandatory North American Electric Reliability Corporation (“NERC”) standards.  The 20-Year Assessment will focus on projects 300-kV and higher in order to develop the EHV backbone. The 10-Year Assessment will focus on 100-300 kV projects, and it will identify solutions to issues not solved in the 20-Year Assessment, such as the elimination of violations, mitigation of congestion, improved access to markets, backbone expansion staging, and improved interconnections. 

Near-Term Assessments will happen annually, and the other Assessments will occur every three years.  Each type of assessment will involve a study scope; then SPP will evaluate alternatives that could improve its transmission system.  SPP also will evaluate the cost-efficiency of every proposal and the costs will be modeled on a 40-year timeframe.  Once all of the SPP studies and analyses are done, SPP will present a list of potential projects to the Markets and Operating Policy Committee (“MOPC”) and the SPP Board of Directors. 

The ITP effective date is July 17, 2010, and the Commission said that even if the ITP Manual is not completed, the cost-effectiveness metrics should be expedited through the stakeholder process as soon as possible.  The first 20-Year plan will be presented to the MOPC and Board of Directors in January 2011, and the 10-Year plan will be presented in January 2012.

In addition, FERC conditionally approved SPP’s proposal to revise its Attachment J of the OATT regarding cost-recovery of costs for new facilities.  The amendments will allow entities with dual-voltage transformers to seek a waiver in order to use the higher voltage level based on anticipated utilization of the transformer.  However, FERC required SPP to submit within thirty days the factors used to consider waiver requests.

Finally, FERC approved SPP’s request to update the unintended consequences provisions of its Attachment J.  SPP modified language to state that the reviews for unintended consequences will occur at least once every three years, and that the SPP’s determination of the zonal cost allocation impacts for Base Plan Upgrades will include only those projects that have a Notification to Construct issued after June 19, 2010.  Further, SPP added language to the analytical methods used for reviewing unintended consequences, which states that a member company can seek relief for cost allocation imbalances through the MOPC beginning in 2015.

A copy of the full decision is available on FERC’s website under docket ER10-1269 and here.