FERC last week overruled a stakeholder’s objections in approving SPP’s proposed Tariff revisions to eliminate a gaming opportunity related to regulation deployment adjustments (ER18-757).
The commission found that SPP’s modifications to the regulation deployment adjustment charge and payment calculations to be just and reasonable, accepting them to become effective May 1.
FERC said that by allowing the use of mitigated energy offer curves or as-dispatched energy offer curves in regulation deployment adjustment calculations, the Tariff revisions “help ensure that the regulation deployment adjustment amount will compensate resources for their output associated with regulation deployment.”
The RTO’s Market Monitoring Unit had pushed for the change (MWG-RR243), saying manipulation of regulation-down offers has cost the SPP market more than $1 million in recent years.
FERC disagreed with Westar Energy’s argument that the revisions represent a “fundamental change” in the incentives for market participants’ selection between the energy or regulation markets. It also disagreed with Westar’s complaint that incorporating resources’ mitigated energy offer curves as a component of the regulation deployment adjustment’s calculation is unjust and unreasonable — noting that market participants perceiving any inequity between the markets can modify their regulation offers accordingly.
The commission said it agreed with the MMU that closing the gaming opportunity outweighed concerns that the Tariff revisions would extend the use of the mitigated energy offer curve beyond local market power mitigation.
“We find that using the mitigated energy offer curve when calculating the regulation deployment adjustment amount should limit gaming opportunities and also helps ensure that the resources deployed to supply regulation recover their costs,” FERC said.
Westar contended that the proposed revisions would automatically cause all regulation deployment adjustment payments to be based on the type of offer (mitigated or market-based) that causes credits to be minimized. It said SPP was proposing a solution that “inappropriately and unreasonably affects all resources, when SPP should instead narrowly address the few bad actors believed to be economically withholding.”
The utility proposed that SPP be required to apply some type of economic withholding evaluation instead. SPP responded that Westar had confused gaming with economic withholding, and said that its market-clearing engine co-optimizes energy demand and regulation requirements with energy and regulation offers while ensuring resources are agnostic relative to selection for energy or regulation.
Commission Denies Golden Spread’s Rehearing Request
The commission denied Golden Spread Electric Cooperative’s rehearing request for its 2017 approval of SPP’s Order 825 compliance filing (ER17-772).
FERC’s September order accepted Tariff changes made to comply with Order 825, which requires RTOs to settle real-time energy, operating reserves and intertie transactions in the same time interval it dispatches, prices and schedules them, respectively. (See FERC Approves SPP Shortage Pricing Changes.)
Golden Spread argued that SPP’s filing did not comply with Order 825 because it did not address the RTO’s practice of committing additional capacity through the reliability unit commitment (RUC) process or through manual operations that can prevent scarcity pricing events. The commission said the protests were outside the proceeding’s scope and encouraged the cooperative to address its concerns through SPP’s stakeholder process.
In its appeal, the cooperative argued that FERC’s dismissal of its concerns as beyond the scope “effectively overlooks the fact that SPP’s current, unchanged practices purposefully and fundamentally mask the presence of market scarcity and subvert the primary goals of Order No. 825.”
The commission noted that its September ruling found that Order 825 did not require Golden Spread’s suggested modifications to SPP’s RUC or manual commitment processes. “The absence of such requirements places these SPP practices beyond the scope of a compliance filing,” FERC said.
The commission has “stated on numerous occasions” that the sole relevant issue in reviewing compliance filings is whether they comply with the directions in the order requiring them, it said. It also pointed out that it will not consider arguments raised in a compliance proceeding “that are not responsive to the narrow issue of the filing utility’s compliance.”
FERC Accepts ITC Midwest’s Interconnection Agreement
FERC accepted ITC Midwest’s third restated interconnection agreement with Corn Belt Power Cooperative and Interstate Power and Light (IPL), effective April 7 (ER18-801).
The agreement adds a substation as an additional point of interconnection between IPL and Corn Belt. The interconnection was expected to be in service in the first quarter of 2018.
Corn Belt and IPL are parties to other dockets (consolidated under ER15-2028) before the commission involving Corn Belt’s entry into SPP as a transmission owner and the resulting implications for existing agreements between the utilities.
The original agreement with ITC dates to 1956 but was designated as a grandfathered agreement (GFA) under MISO’s Tariff. ITC said that because of its possible GFA status under SPP’s and MISO’s Tariffs, Corn Belt and IPL had declined to execute the agreement.
The commission dismissed concerns by Missouri River Energy Services (MRES) that the proceeding’s outcome could affect cost allocations in its transmission zone, finding the proceeding “not to be relevant” to ITC’s proposed addition of the substation.
“We therefore are not persuaded to consolidate this proceeding with [ER15-2028] or otherwise hold it in abeyance,” FERC said. It said its acceptance of the agreement does not affect the ongoing proceeding in that docket.
East River Co-op Granted Waiver to Revise Tx Rates
The commission granted East River Electric Power Cooperative’s request for a one-time waiver to revise its 2018 update and associated informational filing for its formula rate template and protocols under SPP’s Tariff (ER18-860).
The waiver allows East River to reclassify the Groton-Ordway 115-kV transmission project, which it said it had initially understood should be classified as a base plan upgrade eligible for recovery through zonal and regionwide charges. The project will now be included in the cooperative’s annual transmission revenue requirement as part of its zonal charges.
East River is a wholesale electric power supply cooperative serving 24 rural electric cooperatives and one municipally owned electric system in eastern South Dakota and western Minnesota. It became a TO member of SPP in 2015 as part of the Integrated System.
— Tom Kleckner
