On November 10, 2014, FERC accepted the Southwest Power Pool, Inc.’s (“SPP”) proposal to integrate the Western Area Power Administration – Upper Great Plains Region (“Western-UGP”), Basin Electric Power Cooperative, and Heartland Consumers Power District (collectively the “Joint Integrated System Parties”) into SPP.  FERC’s order significantly expands the SPP market, more than doubling its size.  Combined, the Joint Integrated System Parties operate the bulk electric transmission system across multiples states in the Upper Great Plains region, including Iowa, Minnesota, Montana, Nebraska, North Dakota, and South Dakota, with systems consisting of approximately 9,500 miles of transmission lines.

On September 11, 2014, SPP submitted proposed revisions to its Open Access Transmission Tariff (“OATT”), Bylaws, and Membership Agreement in order to allow the Joint Integrated System Parties to join SPP as transmission owning members, placing their respective transmission facilities under the functional control of SPP and thereafter taking transmission service under the SPP OATT.  SPP’s proposal marked the first time that a federal entity such as Western-UGP would join a regional transmission organization (“RTO”).  In its proposal SPP contended that integration of the Joint Integrated System Parties into SPP is both supported by the Commission’s policy of supporting public power participation in RTOs and the congressional preferences expressed in section 1232 of the Energy Policy Act of 2005, which allows federal entities to place transmission facilities under a Commission-jurisdictional OATT.

In its order, FERC summarily approved certain of SPP’s proposed revisions in order to accommodate Western-UGP’s special federal entity status, but set some remaining issues, particularly with regard to potential seams issues resulting from the integration, for settlement and hearing procedures.  Additionally, FERC conditioned its acceptance of SPP’s modifications to its generator interconnection procedures on SPP providing information pertaining to the merger of Western-UGP’s interconnection study queue with SPP’s interconnection queue.

Chairman Cheryl LaFleur explained that the order “is a positive step that greatly expands customer access to organized markets, particularly in the upper-Midwest region, and increases efficiency and reliability for the newly combined market.”

To view the order, click here.