FERC has accepted a second compliance filing from SPP outlining its process for determining its planning reserve margin (PRM) with an Oct. 17 order that found the RTO’s response met the commission’s directives, effective April 10, 2024 (ER24-1221).
SPP was responding to FERC’s May order asking for more information on how it uses loss-of-load expectation (LOLE) studies to determine the PRM. (See FERC to SPP: Show More Work on PRM Determination.)
FERC directed SPP to revise its tariff to include more information related to a “non-exhaustive” list of the factors SPP staff, its board and its state regulators will consider when determining the recommended PRM value.
The commission disagreed with protests filed by several SPP members (American Electric Power, Golden Spread Electric Cooperative, Arkansas Electric Cooperative Corp., Xcel Energy, East Texas Electric Cooperative and Northeast Texas Electric Cooperative) that the grid operator did not explain how it will use the LOLE results to determine the PRM. FERC said the proposed tariff language “makes clear” that the PRM value will be determined based on the LOLE study results and that SPP set forth factors that its staff, board of directors and state regulators will consider when using the study results.
SPP’s’ Market Monitoring Unit also protested, arguing that the tariff shouldn’t reference available generating capacity and new generator development timelines as considerations for recommending or determining the PRM. FERC disagreed, noting that it already accepted a similar provision in the first compliance order.
“That’s a win, I guess, depending on who you ask,” SPP attorney Justin Hinton said to chuckles during a stakeholder meeting Oct. 18, referencing the stakeholder arguments that preceded the PRM’s revision in 2022.
The board approved changing the PRM to 15% from 12% over opposition from stakeholders advocating a three-year phase-in. 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.)
Commission OKs LTCR Change
In an Oct. 11 letter order, FERC also accepted SPP tariff revisions to allow the nomination of candidate long-term congestion rights (LTCRs) for firm transmission capacity associated with the Federal Service Exemption (FSE) and for firm transmission service associated with grandfathered agreement (GFA) carve outs in the LTCR allocation process (ER24-2003).
FERC said the revisions, effective July 14, 2024, are likely to benefit load by further reducing uplift charges that load currently pays to compensate for the congestion and marginal loss charges that GFA carve outs and FSEs do not pay.
SPP said congestion charges associated with the carve outs and FSE transmission reservations have been offset by revenues that SPP receives from nominating auction revenue rights (ARRs) attributable to the carve outs and FSEs. The remaining amount is recovered from SPP-wide load as uplift.
The RTO said it will nominate LTCRs attributable to the carve outs and FSEs under the same criteria by which it currently nominates ARRs attributable to the same exemptions. It said the LTCRs’ revenue will be used to further offset the uplift charges that must be paid by load.
FERC rejected Missouri River Energy Services’ protests that the revisions shift costs to market participants with transmission reservations near the carve out and FSE reservations. It said the alleged cost shifts result from better aligning the tariff’s treatment of ARRs and LTCRs attributable to carve outs and FSEs with the tariff’s treatment of ARRs and LTCRs attributable to all other transmission reservations.
