LITTLE ROCK, Ark. — SPP’s Regional State Committee last week unanimously endorsed the elimination of revenue credits for sponsored transmission upgrades and the 2019 10-year transmission planning assessment.
Regulators asked to hear from renewable energy stakeholders, who participated in the Markets and Operations Policy Committee discussion of the Tariff revision earlier in October. The MOPC unanimously approved the change, which replaces Attachment Z2 credits for sponsored upgrades with incremental long-term congestion rights (ILTCRs), effective February 2020. (See “Stakeholders Endorse Eliminating Z2 Revenue Credits,” SPP MOPC Briefs: Oct. 15-16, 2019.)
EDP Renewables’ David Mindham repeated the industry’s position that the revision doesn’t comply with FERC’s policies on interconnections (Order 2003) and long-term firm transmission rights (Order 681).
“We don’t oppose removing Z2 credits,” he said. “We don’t feel there’s enough value in ILTCRs to be complying with FERC Order 2003.”
“I do agree there are some things that need to be fixed,” South Dakota Public Utilities Commissioner Kristie Fiegen said. “But I believe MOPC’s action is appropriate. I believe Z2 credits need to eliminated sooner rather than later.”
SPP General Counsel Paul Suskie argued that Z2 credits are not required by FERC policy and are instead a “self-imposed requirement” implemented through the stakeholder process.
“If an entity thought our ILTCRs do not comply with FERC, we would not appeal to FERC,” he said.
The RSC also signed off on SPP’s Integrated Transmission Planning 10-year assessment, a portfolio of 44 transmission projects with a total engineering and construction cost of $336 million. The 2019 ITP, the first after stakeholders revised the planning process, includes 166 miles of new extra-high-voltage transmission and 28 miles of rebuilt high-voltage infrastructure.
“We hope to solve both reliability and economic needs in a way that optimizes performance,” Senior Vice President of Engineering Lanny Nickell said. He said the portfolio is expected to lower congestion costs by more than 63 cents/MWh, a 21% reduction.
Nickell said he expects two of 345-kV projects, a 60-mile line in Oklahoma and a 105-mile line in Kansas, to become competitively bid. The projects have engineering and construction costs of $85.9 million and $162.6 million, respectively.
Louisiana’s Campbell: SPP Spending ‘Extravagant’
In a rare appearance before the RSC, Louisiana Public Service Commissioner Foster Campbell laid into SPP for what he termed “extravagant” spending on corporate facilities and executive salaries.
Campbell, a self-described politician whose colorful career includes 26 years in the Louisiana State Senate and multiple failed bids for Congress and the governor’s office, was elected to the PSC in 2002. He normally gives his RSC proxy to PSC legal staffer Dana Shelton. That Campbell is up for election in 2020 led many onlookers to call his comments “political.”
“I’m not trying to be blunt, but telling it like it is,” he said. “The first time I came here, I never saw a building like that. I’ve been to a lot of places: capitols, the White House, fancy hotels … this building costs $67 million. That goes to my customers. I represent my customers, all in North Louisiana, and we have a lot of poor people.”
SPP CEO Nick Brown listened stoically as Campbell criticized him for a salary he said was $950,000. According to the RTO’s 2016 IRS Form 990, the last available through nonprofit tracker GuideStar, Brown’s total compensation was $1.2 million. By comparison, MISO’s 2017 990 lists CEO John Bear’s total compensation at $2.8 million.
“I know the good you’re doing. I hope you realize there are lots of poor folks out there, and I represent a lot of them,” Campbell said. “I would not want my people I represent to know we spend money like this. It’s too much.”
SPP Chairman Larry Altenbaumer cut Campbell off, saying Brown’s salary was commensurate with others in the industry and extolling the work of the Value and Affordability Task Force he chaired. (See SPP Value Group Finds No ‘Silver Bullets’.)
“I spent an entire year, with stakeholder involvement, looking at value and affordability of the organization with respect to our costs and the value delivered,” Altenbaumer said. “I feel very good about the comments we received.”
“I’m sure our architects would be amused that you think that this building is lavishly furnished,” Brown said, describing the building’s use of reclaimed materials and poured concrete for the floors. “Our Finance Committee, that consists predominantly of member companies, oversaw every specific of this building. This building is significantly cheaper than the leased space we were in over multiple locations in the area. To say we’re lavish with our money is simply not true.”
SPP clarified that Campbell’s $67 million figure applies to the value of its infrastructure assets, which includes the $52 million in construction costs for the Corporate Center’s four-story office building, modern operations data center and parking deck, and the backup ops center in nearby Maumelle. The operations center costs include required measures such as storm hardening, backup generation and fuel sources to ensure continued operations, the RTO said.
The RSC took a break after the exchange between Campbell, Brown and Altenbaumer. When the meeting resumed, Shelton was sitting in Campbell’s seat.
The Louisiana PSC is expected to vote on new RTO assignments in January.
Nebraska’s Grennan Elected as RSC President
Regulators approved the slate of officers for the committee’s leadership in 2020, with the Nebraska Power Review Board’s Dennis Grennan succeeding Arkansas Public Service Commissioner Kim O’Guinn as president.
South Dakota’s Fiegen will replace Grennan as vice president, while North Dakota Public Service Commissioner Randy Christmann will replace Fiegen as the RSC’s secretary.
“We have a lot on our plate for the next few months,” Grennan said. “We’ll be working on all of those items.”
O’Guinn in October was appointed to the National Association of Regulatory Utility Commissioners’ board of directors.
Arkansas’ Thomas to Lead OMS Half of Seams Group
Arkansas PSC Chairman Ted Thomas will replace Missouri Public Service Commissioner Daniel Hall as the Organization of MISO States lead on the RSC-OMS committee working to resolve seams issues between the two grid operators. (See OMS Panel Debates Merits of MISO-SPP Seams Projects.)
Missouri PSC economist Adam McKinnie told the RSC that Hall is leaving the commission when his term expires this month.
The committee will meet in an open session on Nov. 17 during NARUC’s annual meeting and education conference in San Antonio. Registration will be available through the OMS website.
— Tom Kleckner
