After rehearing arguments raised by several SPP members, FERC last week unanimously reversed an October decision that established a process for SPP to allocate “byway” transmission projects on a case-by-case basis.

In a July 13 order, the commission rejected SPP’s proposed methodology without prejudice and dismissed a November compliance filing as moot (ER22-1846).

FERC said the grid operator failed to prove its proposal to regionally allocate 100% of a byway facility’s costs on a postage-stamp basis would result in outcomes that are just and reasonable and not unduly discriminatory or preferential.

SPP currently 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. Its proposal would have allowed entities to seek exceptions, which would be approved by the RTO’s Board of Directors, to the cost allocation process for byway facilities. (See FERC Approves SPP Cost-allocation Waiver Plan.)

Transmission-owning members Southwestern Electric Power Co., Public Service Company of Oklahoma, Southwestern Public Service, Oklahoma Gas & Electric, City Utilities of Springfield (Mo.), Kansas City Board of Public Utilities and Missouri Joint Municipal Electric Utility Commission filed rehearing requests in November.

The TOs argued that the board’s secret votes, which are conducted after the Members Committee votes publicly, raised the risk that it would approve or deny waivers on a discriminatory basis.

FERC agreed, saying SPP’s proposal continues to grant the board “too much discretion” in allocating byway facilities’ costs because it doesn’t require the directors to approve a reallocation request if it doesn’t meet three criteria.

“The SPP board could deny a requested reallocation where SPP staff has determined that the criteria are met or, conversely, approve a reallocation where SPP staff has determined that the criteria are not met,” the commission said. “The SPP board’s discretion to make decisions that are potentially inconsistent with whether the criteria set forth in the tariff are met could result in unduly discriminatory outcomes.”

FERC said the discretion provided to the SPP board “is not similar” to cost allocation waivers under SPP’s transformer waiver process. It said the RTO’s proposal would make all byway transmission projects eligible to request waivers, leading to an “expansive” list of eligible facilities and a “far-reaching scope.”

Commissioners James Danly and Mark Christie, who dissented in the original 3-2 decision in October, concurred this time in separate opinions.

“SPP sought to arrogate to itself unfettered discretion in socializing the costs of ‘byway’ transmission projects,” Danly wrote. “As today’s issuance acknowledges, the directives in the underlying order failed to render an otherwise unjust and unreasonable proposal just and reasonable.”

Christie noted that he dissented from the original order and that state support for the new cost allocation proposal was “not uniform,” with four states being on the record as opposing SPP’s suggestion.

“Should SPP seek to file another version of its cost allocation for these types of projects, it is my hope that any such new cost allocation will earn the support of all states to which costs could be allocated,” he said.