By Tom Kleckner
LITTLE ROCK, Ark. — The SPP Board of Directors and its Members Committee applauded the recent settlement with MISO before getting down to the sticky business of deciding how — and to whom — to distribute the settlement’s funds during its quarterly meeting Oct. 27.
Under terms of the settlement agreement filed last month over MISO’s use of SPP’s transmission grid, MISO will pay SPP and its members $9.6 million to settle all claims for compensation since 2014. NRG Energy, which had a firm-service agreement with MISO, will split an additional $3.7 million between SPP and other parties to the settlement. (See SPP, MISO Reach Deal to End Transmission Dispute.)
As the settlement’s funds are not being collected under SPP’s Tariff, the RTO will have to file revised language with FERC designating how those funds will be distributed, which could happen as soon as March 2016. SPP has said it favors revenue allocating the funds to transmission owners with benefits flowing through to SPP’s load.
David Kelley, SPP’s director of interregional relations, said a majority of TOs involved in the settlement negotiations favor a 100% flow-based approach. He said other TOs favor a 100% load-ratio share or a 50-50 split between the flow-based approach and annual transmission revenue requirements.
Kelley said any new Tariff language will likely require revenue be credited to the benefit of all customers taking SPP transmission service “in the same manner in which point-to-point revenue is credited.”
The board voted to adopt the 100% flow-based approach, but not before Chairman Jim Eckelberger proposed creating a task force that would “come to a quick conclusion” on the appropriate Tariff language.
“That way, I think we are engaged in the stakeholder process,” Eckelberger said. “I want to ensure everyone gets a say and everyone gets a vote. I would like to settle it here and not [at FERC].”
Eckelberger’s proposal met with immediate pushback, both from those who intervened at FERC and stand to collect the settlement funds, and those who didn’t.
“Any TO could have intervened,” Westar Energy’s Kelly Harrison said. “Some who didn’t want to spend money on litigation … now that there’s money on the table, they want to have a say?”
“We thought SPP was carrying the ball,” said Golden Spread Electric Cooperative’s Mike Wise. “We didn’t realize we would be excluded from discovery once it came to getting the ball across the goal line.”
Dennis Reed, director of FERC compliance for Westar Energy and chairman of the Regional Tariff Working Group, said work on the Tariff language “has to be on a very fast track.”
“We would really need the Tariff language by mid-December, so the [distribution] policy would have to be set by mid-November,” Reed said. “Anyone who wants to participate should know this will be on a very fast track.”
“My concern is we will have spent a lot of time and a lot of resources to get back to the same place,” said Stuart Solomon, president and COO of American Electric Power’s Public Service Company of Oklahoma. “Someone wants a study, someone wants analysis, and it goes on and on … we consume a lot of resources. If this is the step we take, we would really need tight parameters on the work.”
Members debated whether to write new business practices to handle this issue in the future.
“This only applies to the settlement with MISO,” Kelley said.
A vote to create the task force failed, leaving the heavy lifting to the Tariff working group. It will take up the Tariff language during its regular monthly meetings in November and December before bringing it to the Markets and Operations Policy Committee and Board of Directors in January for approval.
