FERC on Thursday ordered show-cause proceedings on the transmission formula rate protocols of four utilities in SPP, saying they do not appear to provide customers and regulators the ability to challenge the resulting rates.
The commission ordered Grand River Dam Authority (EL22-44), Lincoln Electric System (EL22-45), Nebraska Public Power District (EL22-46) and Omaha Public Power District (EL22-47) to either show why their protocols remain just and reasonable, or explain what changes they could make to address FERC’s concerns.
FERC said the protocols did not meet the standards it has required since a 2012 order regarding MISO’s transmission owners. Under formula rates, the commission does not require TOs to make FPA Section 205 filings to update their annual transmission revenue requirements. Instead, the utilities update the input data in the formulas.
“Safeguards need to be in place to ensure that the input data is correct; that calculations are performed consistent with the formula; that the costs to be recovered in the formula rate are reasonable and were prudently incurred; and that the resulting rates are just and reasonable,” the commission said in each of the orders.
FERC found that each of the four utilities’ protocols fell short on one or more of the following:
- “the scope of participation (i.e., who can participate in the information exchange);
- the transparency of the information exchange (i.e., what information is exchanged); and
- the ability of customers to challenge transmission owners’ implementation of the formula rate as a result of the information exchange (i.e., how the parties may resolve their potential disputes).”
In the 2012 order, the commission ruled that MISO’s protocols inappropriately limited who could participate in the review processes and directed the RTO and its TOs to revise them to include all interested parties, including customers under the MISO tariff, state utility regulatory commissions, consumer advocacy agencies and state attorneys general.
The commission ordered each of the SPP utilities to respond within 60 days.