FERC on March 20 accepted SPP’s proposed tariff revisions incorporating a mark-to-auction (MTA) collateral requirement for its transmission congestion rights (TCR) market while stopping short of terminating a show-cause proceeding dating back to 2022 (ER24-2906). 

SPP had requested that the commission terminate the ongoing show-cause proceeding (EL22-65) as part of its proposal, but FERC declined. It said that while the RTO’s proposal included just and reasonable reforms to allow for the re-marking of monthly TCRs acquired in the annual auction, “it does not fully address the commission’s concern that SPP’s TCR collateral requirements may not adequately address the increased risk of default that results from a TCR portfolio that declines in value.” 

It further explained that seasonal TCRs — emphasizing the difference with monthly TCRs — would not be re-marked based on clearing prices in subsequent TCR auctions. 

“Thus, the associated collateral requirements do not reflect a possible decline in value of those seasonal TCR products. Accordingly, SPP must still respond to the directives in the 2023 show-cause order,” the commission said, referring to an earlier ruling that the RTO’s tariff didn’t include an MTA requirement or comparable alternative. (See FERC Rebuffs PJM, SPP on FTR Credit Rules.) 

SPP said it re-evaluated whether an MTA could be developed in its TCR market to address FERC’s concerns over the use of historical price data to calculate collateral requirements. It said the proposed revisions would mitigate a TCR portfolio’s risk of declining in value over time by implementing more frequent updating of collateral requirements based on valuations from more recent TCR auctions. 

The RTO said the changes proposed in protests by DC Energy and the Energy Trading Institute would require “nothing short of a complete TCR market redesign.” SPP’s Market Monitoring Unit originally intervened in support of the grid operator but later said the proposal did not appear to be consistent with the commission’s show-cause order. 

FERC granted SPP’s request for waiver of the commission’s 120-day notice requirement for good cause shown and accepted the proposed tariff revisions effective May 1. 

MMU Doesn’t Get Rehearing

In a separate order, FERC rejected the MMU’s rehearing request of its acceptance of SPP’s proposal to establish a winter season resource adequacy requirement (RAR) by modifying its order and sustaining the result (ER24-2397). 

The MMU said the commission erred in its November 2024 order approving the RAR. It contended that FERC erred in finding that SPP does not study forced outages and violated the rule of reason by failing to require the inclusion of outage scheduling procedures in the RTO’s tariff. The Monitor requested that FERC direct SPP to define “forced outage” in a compliance filing and to include its outage study procedures in the tariff at issue. 

The commission said it was unpersuaded by the MMU’s arguments. It said SPP’s proposed language included the definition of an “authorized outage” that differentiated which resources can be counted toward a load-responsible entity’s RAR from those that cannot. It said the RTO’s outage coordination methodology makes clear that forced outages are those “forced” upon the SPP system, as opposed to other outages that are studied and approved. 

FERC also disagreed with the MMU that SPP provided insufficient detail related to the tariff’s outage scheduling procedures to satisfy the rule of reason. It found that the RTO’s proposed language does not need to include the outage study procedures and said the MMU’s specific arguments pertaining to how SPP will study outages and whether the tariff contains sufficient detail on the procedures were beyond the scope of the proceeding. 

The commission said it did not find that SPP’s forced-outage definition “‘significantly impacts rates’ in such a manner that the rule of reason” would be included in the tariff. FERC noted that while it found the definition of “seasonal net peak load” in a separate SPP proceeding “significantly affects rates” because it had a direct impact on effective load-carrying capability values, “the relationship between how SPP will study outages and the final resulting rate is only relevant as to the” performance-based accreditation methodology.