FERC has approved an SPP proposal that establishes a way for “byway” transmission projects to be allocated across the RTO’s entire footprint on a case-by-case basis.

Under current rules, SPP allocates one-third of the cost of byway projects — lines rated at 100 to 300 kV — to the RTO’s full footprint, with customers in the transmission pricing zone where the project is built being allocated the rest. “Highway” projects — those larger than 300 kV — are allocated RTO-wide.

The new process allows entities to seek exceptions to the RTO’s cost-allocation process for byway facilities, addressing a growing issue for ratepayers in transmission zones where most of the power being generated is exported to other areas (ER22-1846).

In a 3-2 decision issued Oct. 28, the commission found that the proposal will help ensure that SPP’s “byway” facility costs are allocated roughly commensurate with estimated benefits, consistent with FERC’s cost-causation principle. The order is effective Aug. 1, 2022.

Commissioners James Danly and Mark Christie dissented from the order, saying it forces some states to pay for other states’ renewable energy policies. Kansas was the only one of the 14 states in SPP’s footprint to support the order at FERC.

Al Tamimi, vice president of transmission policy and planning for Sunflower Electric Power, said the order addresses the changes necessary to align costs and benefits for local zones with renewable energy that exceeds the zones’ peak loads and is exported to other zones in SPP.

“In renewable-rich zones, the function of the byway transmission facilities has changed from mainly serving local loads to now carrying and exporting regional flows … where the byway facilities function as a regional flow carrier,” Tamimi told RTO Insider. “Renewable-rich areas like Sunflower Electric have experienced increased costs required to build transmission infrastructure that export substantial energy to other areas of the SPP region. The majority of the transmission costs for byway transmission facilities have been shouldered by local ratepayers versus those benefiting from the energy exports.”

Tamimi has been involved in finding relief for wind-rich zones since 2017. The Holistic Integrated Tariff Team in 2019 recommended evaluation of a narrow process through which specific projects between 100 and 300 kV could be fully allocated regionally. Transmission owners largely opposed the proposal as it wound its way through the stakeholder process, saying it would shift byway cost responsibility from wind-rich areas to others.

SPP singled out Sunflower in its request to FERC. It said the Kansas utility’s pricing zone has 3,100 MW of wind but only a 900-MW peak load.

SPP’s first attempt to gain approval was rejected last year by FERC over concerns the proposal granted the RTO’s Board of Directors too much discretion in allocating costs and did not include clear standards for making decisions. (See FERC Rejects SPP’s Cost-allocation Waiver Proposal.)

The majority in the Oct. 28 decision said Danly failed to identify any evidence to support his conclusion that SPP’s proposal is “designed to facilitate the shifting of some states’ public policy costs onto other states.” The commissioners noted that 11 of SPP’s 14 states do not have active renewable energy standards and that a majority of those that do not (seven out of eight) voted in favor of the measure at the Regional State Committee meeting.

“Such robust support for the proposal, including among states without public policies, strongly undercuts [Danly’s] claims about improper cost shifts,” the majority said. “What matters here is that SPP’s proposal establishes regional cost sharing, consistent with the cost-causation principle, where the relevant infrastructure provides significant benefits to the entire region.”

SPP Responds to Self-funding Comments

SPP on Monday responded to a protest by a group of clean energy advocates that argues the RTO’s proposal to create a standard pathway for TOs to build and profit from network upgrades necessary to bring generators online is “patently deficient” and should be rejected outright (ER22-2968).

The grid operator told FERC that it made clear in its original request that it was not proposing tariff revisions to provide for the TO self-funding option, given that this option already exists in its pro forma generator interconnection agreement. Instead, staff said, the revisions were providing details for implementing the TOs’ right to elect self-funding, including a pro forma facilities service agreement that would promote administrative efficiency and predictability for TOs and interconnection customers.

TOs would be able to recover the self-funding network upgrade costs and a return on the investment from the interconnection customer. FERC approved a similar request by MISO in 2020 (ER20-359).

The American Clean Power Association, Advanced Power Alliance, Solar Energy Industries Association, Natural Resources Defense Council and Sustainable FERC Project filed the protest in October, urging the commission to reject SPP’s request.

They said the RTO’s proposal is “wholly unsupported” and would be unjust and unreasonable if accepted. SPP has the burden under Section 205 of the Federal Power Act to demonstrate that the proposed change is just and reasonable, they said, noting that FERC can reject a filing that “patently fails to substantially comply with the applicable requirements” of its regulations.

“SPP did not submit any information to support the proposed tariff change,” the coalition said, claiming the tariff filing is “devoid” of supporting information. “The entire filing consists of a 17-page transmittal letter and the proposed revised tariff records. SPP failed to include any testimony or supporting affidavits and has failed to meet its burden under Section 205.”