FERC last week defended its prior ruling directing MISO and SPP to fix overlapping congestion charges on pseudo-tied loads and resources (EL17-89).
Responding, in April, to a 2019 complaint from American Electric Power subsidiary Southwestern Electric Power Co. and the city of Prescott, Ark., the commission ordered the RTOs to mitigate the overlapping charges through a rebate mechanism. (See MISO, SPP Ordered to Resolve Overlapping Charges.)
MISO sought a rehearing of the ruling, arguing that FERC lacked evidence in its decision-making because the grid operators managed their interface within the bounds of their joint operating agreement and respective tariffs. MISO also said FERC improperly relied on the “potential” for unjust charges, not actual transactions.
But FERC said in its July 20 order that the Federal Power Act doesn’t require it to “identify unjust and unreasonable charges in specific timing intervals as a prerequisite to exercising its power to remedy an existing unjust and unreasonable rate applicable to an entire market.”
“Instead, as long as the remedy the commission directs is proportional to the identified problem, the commission may make a generic finding of a systemic problem to support a market-wide solution,” the commission wrote. “Here, the commission has appropriately identified a systemic problem, and any remedy will be proportional to the identified problem.”
FERC said it had “sufficient evidence to conclude that the RTOs have assessed unjust and unreasonable overlapping congestion charges, despite lacking the information to quantify the exact amount.”
The commission has yet to assess whether AEP, Prescott, or any other parties are owed refunds stemming from the overlapping charges.
FERC also said that it was within its rights to find that the RTOs’ existing hedging mechanisms to alleviate duplicative transmission charges — auction revenue rights, financial transmission rights, and virtual transactions — are inadequate.
FERC said while it doesn’t expect that the hedging mechanisms will perfectly address congestion, the current array of tools aren’t removing unjust and unreasonable charges.
