By Tom Kleckner

DALLAS — SPP’s Strategic Planning Committee last week ended more than nine months of discussion on cost shifts within existing transmission pricing zones, agreeing unanimously to let the Markets and Operations Policy Committee take up the issue when it meets in July.

The agreement represented a victory of sorts for Kansas City Power & Light’s Denise Buffington, who has drafted a revision request that would create a process for choosing the zone for a new SPP transmission owner’s facilities, and how to submit the TO’s annual transmission revenue requirement (ATRR) or formula rate to FERC for inclusion in the Tariff.

RR172 has been sidelined since October, when it was pulled from the Regional Tariff Working Group (RTWG) and placed on the SPC’s agenda for discussion. (See SPP Moves to Head off KCP&L Measure on Tx Cost Shifts.)

While Buffington will get her long-awaited up-or-down vote on the measure, she told RTO Insider she was still disappointed RR172 had been delayed and that KCP&L’s concerns about “unnecessary and unfair” cost shifts to existing TOs were not addressed.

“I expect a robust debate at MOPC,” she said. “But I expect the ultimate resolution will need to be addressed by FERC and, potentially, the courts.”

The committee, meeting at American Electric Power’s Dallas office, accepted a motion from Heather Starnes, legal counsel for the Missouri Joint Municipal Electric Utility Commission, to conclude the discussion as it became apparent stakeholders would not agree on anything beyond directing staff to use a process document to codify previously approved steps for notifying affected parties of zonal placement decisions. The communications process was approved when the SPC last met in April. (See No Consensus for SPP on Zonal Price Shifts.)

“It’s clear there are issues we can agree upon and issues we can’t agree upon,” Starnes said, reminding the committee that KCP&L’s proposal is still “technically” on the RTWG’s agenda. “Ending discussions of those issues allows RR172 to move directly to MOPC.”

SPP COO Carl Monroe stressed the need to provide a structure for the MOPC to debate KCP&L’s request, suggesting bringing the request up through the stakeholder process and the RTWG. Among Monroe’s concerns were having the MOPC vote on Tariff language that had not already cleared a working group.

Buffington noted RR172 includes proposed Tariff language that she said would be revised to include the discussions before the SPC.

“MOPC can vote on the Tariff language,” she said. “RR172 includes not just the policy issue, but Tariff language that solves the policy problem.”

American Electric Power’s Richard Ross, who seconded Starnes’ motion, pointed out SPP’s working groups don’t decide policy but recommend it.

“There’s only one group that decides policy. It stops at the board, or it goes all the way to FERC,” he said. “I’m all for letting KCP&L have their shot at the process. … Kansas City or John Doe or whoever submits a revision request has their right … to put it through the stakeholder process. They shouldn’t be put in limbo indefinitely. If KCP&L doesn’t get their way at MOPC, they can appeal it to the board.”

“It seems like a member has been allowed to bring an issue directly to MOPC before when a working group failed to approve a request,” said the Nebraska Public Power District’s Paul Malone, who also chairs the MOPC. “I would think that’s the case here too.”

Larry Altenbaumer, one of three SPP directors present at the meeting, weighed in on the issue as well. He advocated having RR172 presented to the MOPC, “where there’s better representation and broader membership.”

“MOPC can decide where it goes,” Altenbaumer said. “I don’t think sticking it in some working group is the right answer.”

“I want a policy decision from MOPC and the board,” Buffington said. “I want an up-and-down vote, where all members have an opportunity to vote on it. If the board ultimately approves it, or through modifications, my expectation is SPP will file it at FERC. … I would ask this group complete its work so I can move forward with my proposal.”

By codifying SPP’s zonal selection criteria in the Tariff, KCP&L says RR172 strikes a balance between attracting new transmission-owning customers to SPP and eliminating the ability for them to shift costs to existing members. The revision is intended to establish a bright line between the costs of legacy transmission and new facilities planned by SPP.

The SPC’s eventual agreement helped short-circuit a series of examples for how staff would handle zonal cost shifts under various scenarios. Staff’s suggestion that there was value in walking through six more examples following a lunch break left one stakeholder wide-eyed and slack-jawed in apparent horror.

Staff has proposed zonal-placement criteria that included:

• • • Whether the facilities’ ATRR is less than the minimum zonal ATRR;
    • The extent to which the facilities substantively increase the SPP footprint; and
    • The extent to which the load served by the transferring facilities received network or long-term, firm point-to-point (PTP) service within existing zones before the transfer.

If not placed in a new zone, the facilities would be placed in an integration zone according to:

• • • The extent to which the facilities are embedded within an existing zone;
    • The extent to which the facilities are already integrated with an existing zone; and
    • The extent to which the load served by the transferring facilities received network or long-term, firm PTP service within each existing zone prior to the transfer.

Staff will continue working on assessments to determine whether a new member’s facilities meet minimum system reliability requirements, and whether they are similar in design to the integration zone’s facilities and are eligible for inclusion in the existing zonal TO’s ATRR.