By Rich Heidorn Jr.
FERC last week rejected proposed SPP Tariff revisions, saying they would unfairly favor network transmission customers over point-to-point customers in how the RTO awards congestion rights (ER16-1286-001, EL16-110).
The commission’s ruling came in response to complaints by Southern Co., the American Wind Energy Association and the Wind Coalition.
The commission accepted changes that eliminated language SPP said had become obsolete as a result of the Integrated Marketplace. It also approved changes preventing firm point-to-point transmission customers whose service is subject to redispatch from obtaining long-term congestion rights (LTCRs).
But it rejected SPP’s proposal to grant such rights to network customers subject to redispatch, setting the issue for a Section 206 hearing.
LTCRs, financial instruments that allow transmission customers to hedge congestion risk, can be obtained through purchase or conversion of auction revenue rights. Transmission customers can nominate ARRs between source and sink points over paths for which they have purchased transmission service.
When SPP receives a firm transmission service request requiring transmission upgrades, the RTO will start service before the upgrades are in service if it is able to temporarily address any constraints through redispatch.
SPP contended it was within its rights in treating point-to-point customers differently than network customers, arguing that the two classes are not “similarly situated.” FERC said SPP’s rationale was “not persuasive.”
“While SPP notes that point-to-point transmission service uses a specific transmission path and network service uses the network as a whole, we note that SPP appears to ignore the fact that ARRs and LTCRs are allocated for both point-to-point and network service from a particular source point on the system serving a particular sink point on the system,” the commission said.
Under SPP’s proposal, the commission said, “firm point-to-point transmission service customers not subject to redispatch could receive a reduced portion of the available ARRs because such firm point-to-point transmission service would be competing with network service subject to redispatch.”
The commission said SPP may be able to resolve its concerns by revising section 34.6 of its Tariff to limit the eligibility for ARRs and LTCRs of network customers with service subject to redispatch.
“Our preliminary review indicates that SPP should not provide network service customers subject to redispatch with any LTCRs until the transmission upgrades are placed into service and the service is no longer subject to redispatch,” FERC said. “The commission notes that this approach would be consistent with SPP’s rationale for not providing point-to-point customers subject to redispatch with LTCRs.”
