The D.C. Circuit Court of Appeals on July 19 rejected a wind farm’s challenge of FERC’s decision to allow SPP to charge more than $100 million for upgrades needed to connect the facility to the grid operator’s system.
In a unanimous ruling, the court found the commission’s decision to assign mitigation costs to Tenaska Clear Creek Wind to be reasonable because the project caused operational issues for SPP that would not have existed but for the facility itself (22-1059).
Clear Creek’s appeal stems from a September 2022 order in which FERC ruled that SPP correctly assigned the facility about $66 million in network upgrade costs during a restudy of a Missouri wind project. The commission denied in part a rehearing request in December 2022, although it directed the RTO to restudy the project with different planning models. (See “Split Decision for Tenaska in SPP Complaint,” FERC Rules in Three SPP Disputes.)
The network upgrade costs eventually were set at $102 million.
The appeals court said it was “unpersuaded” by Clear Creek’s challenges in its review request. The wind farm argued that FERC’s order violated its cost-causation principle; that SPP’s cost allocation was inconsistent with the commission’s “but for” policy; and that FERC ignored the RTO’s interconnection study and allocation practices used firm service when the facility was not taking service or seeking deliverability.
The D.C. Circuit said FERC was able to show its finding “comports with its precedent and the cost-causation principle,” thus proving the order was based on reasoned decision-making. It said the commission’s reasoning was “simply that the project caused operational issues for SPP that did not arise prior to its operation, so it is reasonable to assign the costs of mitigation to Clear Creek.”
The court also concluded SPP’s methodology aligns with the “but for” principle and the commission’s determination was consistent with “reasoned decision-making.”
“Substantial evidence supports the commission’s determination here that the disputed upgrades were not intended to address regional transmission planning, as opposed to interconnection, needs,” the appeals court wrote.
Finally, the court said FERC “reasonably” explained why Clear Creek couldn’t meet the burden of demonstrating that SPP’s use of firm service, or network resource interconnection service (NRIS), was unjust, unreasonable, unduly discriminatory or preferential. It said the commissioned identified precedent that was just and reasonable and that it “expertly pointed out” how Clear Creek’s NRIS request supported SPP’s justification for conducting its interconnection study at the NRIS level.
Clear Creek is a 242-MW facility that is interconnected to SPP neighbor Associated Electric Cooperative Inc.’s transmission system. The upgrade costs were assigned as part of an affected system study.
The facility became operational in May 2020.
