FERC last week rejected a complaint by SPP members seeking to overturn the RTO’s decision last year to increase its planning reserve margin (PRM) from 12% to 15%.

In a 3-1 vote Wednesday, the commission ruled that American Electric Power (AEP), Oklahoma Gas and Electric (OG&E) and Xcel Energy failed to show SPP’s PRM process was unjust, unreasonable, or unduly discriminatory (EL23-40).

Commissioner James Danly dissented from the order, saying FERC had failed to grapple with the complainants’ core point: What must SPP be required to include in its tariff and what can the commission allow to be consigned to business practices or external processes?

The three utilities filed their complaint in February under Section 206 of the Federal Power Act. They argued that the new PRM’s implementation gave them only six months to procure additional capacity necessary to comply with the increased resource adequacy obligations ahead of the 2023 summer season. The utilities said the PRM’s value and calculation is not in SPP’s tariff and asked the commission to require the grid operator to include the methodology in the tariff and file it for the commission’s review.

SPP’s board approved the change last July over opposition from stakeholders, who advocated for phasing in the PRM over a three-year period. Load-responsible entities unable to meet the requirement can incur financial penalties from the RTO. (See SPP Board, Regulators Side with Staff over Reserve Margin.)

In rejecting the protest, FERC ruled that the utilities failed to meet their Section 206 burden to show that exclusion of the PRM left SPP’s tariff as unjust. It disagreed with their argument that SPP’s PRM decision constituted an “impermissible collateral attack” on a 2018 resource adequacy order and assessed the complaint on the record before the commission.

“Complainants’ core argument is that the rule of reason, filed rate doctrine and due process require SPP to include its planning reserve margin value in its tariff,” FERC wrote. “Granting this relief would go beyond merely adding new details about SPP’s existing process, which is a common remedy to a rule of reason claim.”

The commission said Attachment AA to SPP’s tariff, which it accepted in 2018, describes the process through which the RTO reviews and revises the PRM.

“We find that this level of detail is sufficient to satisfy the rule of reason,” the three approving commissioners wrote. “Our determination here is consistent with relevant commission precedent, including specific precedent regarding the establishment of planning reserve margins in resource adequacy programs.”

FERC also denied the utilities’ alternative request that it direct SPP to remove the deficiency payment mechanism from its tariff, saying it continues to exercise jurisdiction over the deficiency payment mechanism and the grid operator’s PRM process.

Danly said in his dissent that while the PRM value doesn’t necessarily need to be in the tariff, “it nevertheless represents a rather important part of SPP’s rate.”

“Perhaps the lesson to be drawn from this proceeding is not to focus on whether the existing tariff provisions accord with the rule of reason but whether responsible administration and regulation of RTOs is even possible,” he wrote. “As the complexity and uncertainty of our markets increases, it becomes ever more difficult to implement rational policies and to assure ourselves, even in the face of a particular complaint, that a tariff remain just and reasonable.”