FERC has terminated a show-cause proceeding against SPP and accepted the RTO’s proposal to revise its mark-to-auction (MTA) collateral requirement for financial transmission rights by including an additional re-marking mechanism for seasonal products.
The commission said in its Sept. 30 order that SPP’s tariff “now fully addresses” its concerns in the proceeding, saying the mark-to-auction mechanism “sufficiently requires collateral to address the risk that a [transmission congestion rights] portfolio may decline in value over time” (ER25-2261, EL22-65).
“SPP’s approach ‘take[s] auction-clearing prices [ACPs] into consideration and thus incorporate[s] market expectations of the future values of the TCRs,’” FERC said, referring to a March order accepting the grid operator’s MTA proposal. That order stopped short of terminating the show-cause proceeding that dated back to 2022. (See FERC Accepts SPP Revisions to TCR Market, Maintains Show Cause.)
“Specifically, SPP’s proposal will apply ACPs from monthly auctions within the relevant season to re-mark the collateral requirements of seasonal TCRs, thereby ensuring that all TCR products are subject to a forward-looking pricing mechanism that reflects current market conditions,” the commission said.
FERC said SPP’s proposal to update collateral based on the most recent auction price for seasonal and monthly TCRs “provides sufficient protection when considered alongside other features of SPP’s TCR collateral requirements and market design.”
The commission disagreed with DC Energy’s arguments that the show-cause proceeding should remain open to consider broader reforms to SPP’s TCR market design. It found further reforms are unnecessary to address its concerns regarding the increased risk of default that results from a TCR portfolio that declines in value.
It also rejected the SPP Market Monitoring Unit’s call to strengthen tariff language regarding ad hoc collateral adjustments. FERC agreed with SPP that under its tariff, the RTO already possesses “sufficient authority” through its existing credit policy to conduct ongoing credit assessments, revise customer credit limits and issue collateral calls in response to material changes in credit risk.
The commission granted SPP’s request for waiver of the commission’s 120-day prior notice requirement for good cause and accepted the proposal effective May 1, 2026, to allow the RTO to prepare for the TCR annual auction in 2026.
FERC Penalizes NorthWestern
FERC approved a consent agreement between its Office of Enforcement and Regulatory Accounting and NorthWestern Energy, completing an investigation into whether the utility violated SPP’s tariff over a wind farm’s operation (IN25-14).
The Enforcement investigation found that NorthWestern failed to meet a deadline to convert its Beethoven wind farm project from a non-dispatchable variable energy resource (NDVER) to a dispatchable variable energy resource (DVER). NorthWestern acquired the 80-MW facility in South Dakota from BayWa Wind in July 2015, several months after it began commercial operation.
The utility, Beethoven’s market participant, told SPP several times over a seven-month period before the acquisition that Beethoven was a qualifying facility (QF) and registered it as an NDVER. Beethoven was merged into NorthWestern, and in September 2015, BayWa Wind relinquished the facility’s QF status.
As a wind-powered VER, the wind farm should have been registered as a DVER in 2015, according to SPP’s tariff. However, it wasn’t until February 2025 that NorthWestern completed the registration and conversion of Beethoven to DVER status.
NorthWestern neither admitted or denied the violation but agreed to: 1) pay a civil penalty of $40,000 to the U.S. Treasury; 2) disgorge $32,000, inclusive of interest, to SPP; and 3) provide compliance monitoring reports to Enforcement.
Enforcement opened the investigation after receiving a referral from SPP’s MMU.
