In the latest chapter in a long-running saga dealing with certain credits for transmission upgrades in the Southwest Power Pool (SPP), on September 18, 2025, FERC directed SPP to submit a compliance filing addressing certain aspects of SPP’s proposed plan (Refund Plan) for unwinding credit payment obligations assessed by SPP. FERC found that SPP had not sufficiently detailed how various aspects of the Refund Plan would work and that parts of the Refund Plan did not comply with FERC regulations.

Attachment Z2 of SPP’s Open Access Transmission Tariff (OATT) provides that transmission customers, generation interconnection customers, and entities that request certain Network Upgrades are eligible to receive revenue credits for network upgrades whose costs have been directly assigned to them. Around 2016, it became apparent that SPP had not properly implemented Attachment Z2 due to delays in implementing computer software and had failed to provide these revenue credits to certain parties.

In 2016, FERC granted a request from SPP to waive certain provisions of its OATT to allow SPP to retroactively invoice transmission service customers for credit payment obligations under OATT Attachment Z2 for service taken from 2008 to 2016 (Historical Period). In 2019, however, FERC reversed its prior decision granting waiver of certain SPP OATT provisions. FERC determined that section 7.1 of the OATT, which imposes a one-year billing adjustment limitation, is part of SPP’s filed rate and could not be waived without violating the filed rate doctrine. Accordingly, FERC found that SPP must refund credit payment obligation amounts for service taken during the Historical Period, except for those becoming payable one year prior to the date SPP initially rendered bills to customers for credit payment obligations.

On September 20, 2024, SPP filed its proposed Refund Plan, which updated prior 2019 and 2022 refund plan submissions. The Refund Plan proposed to unwind and resettle (i.e., recalculate) credit obligations assessed by SPP. Specifically, SPP would refund all amounts invoiced for service taken during the Historical Period that were outside of the one-year billing adjustment limitation set forth in the OATT and then would resettle the credit obligations for the last year of the Historical Period, consistent with the one-year billing adjustment limitation, and for subsequent years after the Historical Period. SPP stated that the total dollar amount directly affected by FERC’s 2019 refund directive is at least $657.8 million and is accruing an additional $3–$4 million in interest each month.

In the September 18 Order, FERC determined SPP had not sufficiently detailed how various aspects of the Refund Plan would work and that parts of the Refund Plan did not comply with FERC regulations. Specifically, FERC directed SPP to detail the amounts to be recouped and refunded (with interest), the mechanics of handling Short-Payments, the structure of a five-year payment plan, methodologies for adjusting impact ratios, and a conceptual proposal for an Accelerated Netting Solution for multi-year resettlement. SPP must also address how it will handle cases where credit payment obligations exceed the maximum costs specified in Aggregate Facilities Study Completion Agreements.

Recognizing the need to act quickly and the financial consequences of further delays in the proceeding, FERC ordered SPP to submit its compliance filing within 45 days.

FERC’s full order, issued in Docket No. ER16-1341-003, can be accessed here.