On May 3, 2023, a divided FERC voted 3-1 to deny a widely-supported complaint by multiple utilities in the Southwest Power Pool (“SPP”) region arguing that the absence of the new 15% generation Planning Reserve Margin (“Reserve Margin”) from the SPP tariff rendered that tariff unjust and unreasonable. The Reserve Margin dictates exactly how much electric generating capacity load-serving utilities must own or have under contract to serve customers. The complaining utilities argued that customers in SPP could be harmed by the costs associated with the rapid increase in the Reserve Margin with little corresponding reliability benefit and asked FERC to keep closer tabs on the process. The utilities’ request for additional FERC oversight was opposed only by SPP itself. As a result of the decision, SPP is free to change the Reserve Margin without any oversight by FERC or approval by a single state commission. FERC further held that a complaint alleging that a key rate is missing from a tariff in violation of section 205 of the Federal Power Act and the Commission’s Rule of Reason fails to state a claim upon which relief could be granted.
Continue Reading Divided FERC Announces Hands-Off Approach to Capacity Issues in SPP, Raises Questions About Tariff Detail Complaints