On October 20, 2022, the Federal Energy Regulatory Commission (the “Commission”) issued an order addressing Oklahoma Gas and Electric Company, GridLiance High Plans LLC, and the Indicated SPP Transmission Owners’ (consisting of Evergy Kansas Central, Inc., Evergy Metro, Inc., Evergy Missouri West, Inc., and ITC Great Plains, LLC) (together, the “Petitioners”) requests for rehearing and alternatively request for clarification of the Commission’s June 2022 Order accepting revisions to Southwest Power Pool, Inc.’s (“SPP”) Open Access Transmission Tariff (“Tariff”) (“Rehearing Order”). The Commission denied the Petitioners’ request for rehearing and sustained its June 2022 Order establishing SPP’s uniform Zonal Planning Criteria.
In 2020, SPP proposed revisions to its Tariff to establish an annual process for each transmission pricing zone to develop uniform Zonal Planning Criteria for SPP to use in evaluating the need for Zonal Reliability Upgrades in its regional transmission planning process. The Commission rejected SPP’s 2020 proposal because it would designate network customers with the largest total network load in a zone as a Facilitating Transmission Owner with the sole authority to develop the planning criteria that would apply to the entire zone, which the Commission found could lead to the exercise of both undue preference and undue discrimination.
In April 2022, SPP submitted a revised proposal to develop uniform Zonal Planning Criteria but with additional safeguards to address the Commission’s concerns. While SPP continued to propose that the network customer with the largest total network load in the zone would designate a Facilitating Transmission Owner to facilitate the development of the Zonal Planning Criteria for that zone, SPP also included a process for transmission owners and customers to submit proposed Zonal Planning Criteria in which interested parties could comment on the proposals. Further, transmission owners and customers would participate in a two-step voting process to approve any Zonal Planning Criteria. In June 2022, the Commission approved the SPP’s proposed revisions finding that they allowed for the collaborative development of Zonal Planning Criteria in zones that are comprised of multiple transmission owners and also addressed concerns about using multiple sets of local planning criteria for the same zone to identify Zonal Reliability Upgrades.
Petitioners sought rehearing of the June 2022 Order, arguing that: (1) the two-step voting process for approving Zonal Planning Criteria permits small transmission customers to unreasonably block the adoption of proposed criteria; (2) the use of SPP’s regional planning criteria as a back-up, or permitting the use of local planning criteria but coupled only with direct assignment of facilities costs, when agreement cannot be reached on Zonal Planning Criteria violates the cost causation principle; (3) the Zone 19 exemption from the Zonal Planning Criteria development process is unduly discriminatory; (4) SPP abdicated its transmission planning role under Order Nos. 1000 and 2000; and (5) the June 29, 2022 effective date would impose compliance burdens.
The Commission rejected the Petitioners’ arguments and upheld its finding in the June 2022 Order regarding SPP’s Tariff revisions. First, the Commission found that the two-step voting process is just and reasonable because no entity can force a particular set of Zonal Planning Criteria to be adopted without consensus; thus, even large transmission owners and customers will have the same ability as small transmission customers to vote against Zonal Planning Criteria to which they have not agreed. Second, the Commission found that neither using SPP’s regional planning criteria nor permitting transmission owners to use their local planning criteria with direct assignment of costs violates the cost causation principle because entities who pay system costs should be able to participate in the development of the criteria used to identify the system upgrades, and transmission owners can still plan locally to meet any reliability needs but will be responsible for the costs of any facilities necessary to meet those needs. Third, the Commission found that the exemption of Zone 19 to use its own consensus-based voting process was not unduly discriminatory because any other zone may request proposed Tariff revisions to implement its own voting process if it does not wish to use the two-step process for approving Zonal Planning Criteria. Fourth, the Commission found that SPP has not abdicated its role in the transmission planning process in Order Nos. 1000 and 2000 because SPP continues to have ultimate responsibility for transmission planning and expansion in its region. Lastly, the Commission granted the Petitioners’ request for clarification and stated that the date for implementing the new Zonal Planning Criteria development process will commence with the designation of a new Facilitating Transmission Owner on April 2, 2023.
A copy of the Rehearing Order can be found here.