October 29, The Honorable Kimberly D. Bose Secretary Federal Energy Regulatory Commission 888 First Street, N.E. Washington, D.C.
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1 The Honorable Kimberly D. Bose Secretary Federal Energy Regulatory Commission 888 First Street, N.E. Washington, D.C., 46 October 9, 5 Re: Southwest Power Pool, Inc., Docket No. ER6- - Submission of Tariff Amendments to Clarify Treatment of Point-To-Point Transmission Service Revenues Dear Secretary Bose: Pursuant to section 5 of the Federal Power Act ( FPA ), 6 U.S.C. 84d, and Part 35 of the Regulations of the Federal Energy Regulatory Commission ( Commission ), 8 C.F.R. Part 35, Southwest Power Pool, Inc. ( SPP ), as authorized by its Board of Directors, submits revisions to its Open Access Transmission Tariff to resolve ambiguity regarding the treatment of Point-To-Point Transmission Service ( PTP ) revenues in the calculation of a Transmission Owner s Zonal Annual Transmission Revenue Requirement ( ATRR ) for the purposes of determining Monthly Demand Charges and Base Plan Zonal and Region-wide Charges for Network Integration Transmission Service ( NITS ). SPP requests an effective date of January, 6 for the revisions proposed in this filing. In support, SPP states the following: I. BACKGROUND A. SPP SPP is a Commission-approved Regional Transmission Organization ( RTO ). 3 It is an Arkansas non-profit corporation with its principal place of business in Little 3 Southwest Power Pool, Inc., Open Access Transmission Tariff, Sixth Revised Volume No. ( Tariff ). References in this filing to Tariff refer to the version of SPP s Tariff currently in effect. Proposed Tariff refers to revisions proposed in this filing. Capitalized terms not otherwise defined herein shall have the meaning ascribed in the Tariff. Sw. Power Pool, Inc., 9 FERC 6,9 (4), order on reh g, FERC 6,37 (5).
2 The Honorable Kimberly D. Bose October 9, 5 Page Rock, Arkansas. SPP has 94 Members, including 6 investor-owned utilities, 4 municipal systems, 9 generation and transmission cooperatives, 8 state agencies, 3 independent power producers, power marketers, independent transmission companies, and federal agency. As an RTO, SPP administers open access Transmission Service over approximately 56, miles of transmission lines covering portions of Arkansas, Iowa, Kansas, Louisiana, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas and Wyoming, across the facilities of SPP s Transmission Owners, 4 and administers the Integrated Marketplace, a centralized day ahead and real-time energy and operating reserve market with locational marginal pricing and market-based congestion management. 5 B. Stakeholder Process The revisions proposed in this filing were developed through the SPP stakeholder process. The process to identify the issues around the treatment of PTP revenues in the Tariff began in the Billing Determinants Task Force ( BDTF ), which is a group organized under the purview of the Regional Tariff Working Group ( RTWG ). The BDTF developed the initial draft of the Tariff revisions proposed herein and first presented them to the RTWG on November 9, 4. 6 The RTWG approved the revisions without opposition on December 7, 4. 7 The Markets and Operations Policy Committee ( MOPC ) unanimously approved the RTWG s actions on January 3, 5 8 and the Board of Directors approved the Tariff revisions for filing on January 7, See Sw. Power Pool, Inc., 89 FERC 6,84 (999); Sw. Power Pool, Inc., 86 FERC 6,9 (999); Sw. Power Pool, Inc., 8 FERC 6,67, order on reh g, 85 FERC 6,3 (998). Sw. Power Pool, Inc., 46 FERC 6,3 (4) (order approving the start-up and operation of the Integrated Marketplace effective March, 4). See RTWG Minutes, dated November 9, 4, at Agenda Item 7 posted at the following location on SPP s website: -%november%9%-%,%4%updated%-9-4.pdf. See RTWG Minutes, dated December 7, 4, at Agenda Item 4 posted at the following location on SPP s website: %9,%4%amended%-8-5.pdf. See MOPC Minutes, dated January 3-4, 5, at Agenda Item 8 posted at the following location on SPP s website: january%3-4,%5.pdf.
3 The Honorable Kimberly D. Bose October 9, 5 Page SPP recognizes that stakeholder approval does not by itself cause a filing to be just and reasonable; however, SPP requests that the Commission extend appropriate deference to the wishes of its stakeholders regarding the revisions proposed in this filing, consistent with Commission precedent. II. DESCRIPTION OF AND JUSTIFICATION FOR PROPOSED TARIFF REVISIONS A. Justification for Proposed Tariff Revisions During the BDTF discussions, SPP staff and stakeholders identified three issues regarding the treatment of PTP revenues that needed either correction or clarification in the Tariff. These three issues create ambiguity regarding the treatment and accounting for PTP revenues under the Tariff and this instant filing seeks to resolve these issues. First, current Section 34. (Monthly Demand Charge) of the Tariff is written in a manner that a Network Customer s monthly Demand Charge accounts for only Schedule 7 (Firm PTP) charges. Under Section 34. of the Tariff, a Network Customer s monthly Demand Charge is determined in part by recognizing any PTP revenues that the Transmission Owner collects. The mechanics of this process involves the reduction of the Demand Charge to the extent PTP revenues are collected by the Transmission Owner. Under Section 34., this reduction can either be accomplished by the Transmission Owner through its formula rate, or SPP settlements does the reduction to the Demand Charge for those Transmission Owners that have a stated rate or don t take PTP revenues into account in its formula rate. This process is intended to assure that the Transmission Owner doesn t over-collect its ATRR by receiving its total ATRR from NITS revenues under Schedule 9 and also additional PTP revenues that SPP collects. When Section See Board of Directors/Members Committee Meeting Minutes No. 6, dated January 7, 5, at Agenda Item 3 posted at the following location on SPP s website (approved as part of the Consent Agenda): The Commission previously has recognized that provisions approved through the stakeholder processes of RTOs are due deference. See Sw. Power Pool, Inc., 7 FERC 6,83, at P 33 (9) (noting that the Commission accord[s] an appropriate degree of deference to RTO stakeholder processes ); Policy Statement Regarding Regional Transmission Groups, FERC Stats. & Regs., Regs. Preambles 3,976, at 3,87 (993) (the Commission will afford an appropriate degree of deference to the stakeholder approval process). See Pub. Serv. Comm n of Wis. v. FERC, 545 F.3d 58, 6-63 (D.C. Cir. 8) (noting that the Commission often gives weight to RTO proposals that reflect the position of the majority of the RTO s stakeholders).
4 The Honorable Kimberly D. Bose October 9, 5 Page 4 was written SPP offered only Firm PTP under the Tariff. Subsequently, SPP has implemented schedules which also generate PTP charges for non-firm PTP (Schedule 8) and the Base Plan Zonal and Region-Wide Charge (Schedule ). However, Section 34. was not updated at the time those schedules were implemented to account the new PTP revenues in the determination of the Network Customer s monthly Demand Charge. Second, Section 34. was implemented prior to the implementation of formula rate templates for SPP Transmission Owners. Since that time, many of SPP s Transmission Owners have implemented formula rate templates that account for (i.e., reduce or credit) Schedules 7, 8, and PTP revenues in the determination of their zonal ATRR. This crediting of PTP revenues is based on the premise that Transmission Owners fully recover their Zonal and Base Plan ATRR from NITS collected pursuant to Schedules 9 and of the Tariff. As a result, Section 34. and Schedule require correction to recognize in a more transparent fashion how PTP revenues are credited in the formula rates and stated rates of Transmission Owners. Finally, the BDTF identified the need to correct provisions of the Tariff which result in the over-collection of revenues by a few Transmission Owners that were inadvertently excluded from the provisions of Section 34. due to the Transmission Owner s integration in an existing zone that was not subject to Section 34. requirements. Currently, Sections 34. and 34.3 of the Tariff provide an exemption from Section 34. for SPP pricing zones (American Electric Power ( AEP-West )) and (Southwestern Public Service Company ( SPS )). When the aforementioned Transmission Owners, were added to these zones, they inadvertently became eligible for the same exception to Section 34.. The result was that the Transmission Owners added to Zones and (and which did not account for PTP revenues in its ATRR) would over-collect its revenue requirements because it received both (i) its stated total ATRR (i.e., that is not reduced under Section 34. to account for its PTP revenues); and (ii) revenues for PTP service on its facilities. SPP did not recognize this unintended consequence when it developed zones and into multi-transmission Owner zones. Notwithstanding the over-collection described above, SPP determined the filed-rate doctrine prohibited SPP from adjusting the Transmission Owner s ATRR to account for the PTP revenues it received. Such Transmission Owners could have either a stated-rate or a formula rate that does not annually update and account for PTP revenues received by the Transmission Owner as an offset to the Transmission Owner s revenue requirements. See Oxy USA, Inc., v. FERC, 64 F.3d 679, 699 (995), quoting, Arkansas Louisiana Gas Co. v. Hall, 453 U.S. 57, 577, 69 L. Ed. d 856, S. Ct. 95 (98) ( The filed-rate doctrine forbids a regulated entity to charge rates for its services other than those properly filed with the appropriate federal regulatory authority. "); see also Cargill Power Markets, LLC., FERC P 6,5 at P 7, (continued...)
5 The Honorable Kimberly D. Bose October 9, 5 Page 5 To remedy these issues, this filing proposes Tariff revisions to correct the provisions related to the accounting of PTP revenues in the calculation of a Transmission Owner s Zonal ATRR for the purposes of determining monthly Demand Charges and Base Plan Zonal and Region-wide Charges for NITS. The proposed Tariff revisions clarify how SPP will properly account for all PTP revenues when the Transmission Owner s ATRR is not calculated using a formula rate that credits PTP revenues on an annual basis or is a stated-rate that is not reduced to account for PTP revenues. To the extent that a Transmission Owner s formula rate template does not include adjustments for PTP revenue to the Zonal ATRR, the Base Plan Zonal ATRR, and the Region-wide ATRR, the proposed Tariff revisions allow SPP to make such adjustments in the Settlement process accordingly. Additionally, the proposed revisions clarify the proper inclusion of PTP charges pursuant to Schedule 8 and in the accounting described above. Commission approval of the proposed Tariff revisions is warranted and justified because they result in the proper accounting for all PTP revenue distributed to the Transmission Owners. The proposed revisions are necessary to ensure that PTP revenues are properly accounted for in the Transmission Owners ATRR so that the Transmission Owners do not over-recover their revenue requirements under the Tariff. In other words, unless the state-rate or formula rate template credits PTP revenue, all PTP revenues distributed to such Transmission Owner are over and beyond the Transmission Owner s Zonal and Base Plan ATRR. Because the existing Tariff provisions do not address Non-Firm PTP revenues (Schedule 8), nor Schedule PTP revenues associated with Base Plan facilities, there is ambiguity as to how PTP revenues are calculated and distributed to Transmission Owners. Commission approval of the proposed Tariff revisions will reduce the current ambiguity existing in the Tariff and result in increased transparency in the application of the PTP revenue credits. (... continued) reh'g denied, 3 FERC P 6,33 (5) (under the filed-rate doctrine, a regulated entity must charge the rate that is on file with the Commission). The corollary to the filed-rate doctrine is the rule against retroactive ratemaking. This rule prohibits the Commission from adjusting current rates to make up for a utility s over- or under- collection in prior periods. Towns of Concord, 955 F.d 67 at 7, n. (citing Columbia Gas Transmission Corp v. FERC, 83 F.d 35, 39-4 (D.C. Cir 99).
6 The Honorable Kimberly D. Bose October 9, 5 Page 6 B. Description of Proposed Tariff Revisions. Part III- Network Integration Transmission Service, Section 34 (Rates and Charges) Section 34 of the Tariff sets forth the rates and charges that a Network Customer is required to pay for NITS as determined in accordance with Schedule 9. As relevant here, Sections 34. through 34.3 of the Tariff contain provisions regarding the Monthly Demand Charge that a Network Customer is required to pay for all Network Load served by SPP. 3 SPP proposes revisions to Sections 34. through 34.3 of the Tariff 4 to clarify that, for the purposes of calculating the Monthly Demand Charge, the Transmission Owner s Zonal ATRR 5 will be adjusted to account for both Firm PTP and Non-Firm PTP revenues collected in the prior calendar year, unless the Transmission Owner utilizes a formula rate that already offsets PTP revenues in calculating the Transmission Owner s ATRR. Specifically, SPP has revised Section 34. (Monthly Demand Charge) to provide that a Network Customer s Monthly Demand Charge will be determined by multiplying its Load Ratio Share 6 times one twelfth of the Zonal ATRR specified in Attachment H, As described in Section II.A of this transmittal letter, Section 34. governs the calculation of the Monthly Demand Charge in Zone, AEP-West. Section 34.3 governs the calculation of the Monthly Demand Charge in Zone, SPS. Both zones include the transmission facilities of multiple Transmission Owners. SPP also includes a ministerial revision to the Table of Contents of the Tariff to reflect the title change for Section 34.. The Tariff defines Zonal Annual Transmission Revenue Requirement as [t]he revenue requirements for facilities in each Zone and the Accredited Revenue Requirement(s), if any, that are allocated to the Zone in accordance with Attachment J to this Tariff as set forth in Attachment H, Table, Column (3). Tariff at Part I, Section XYZ Definitions. The Tariff defines Load Ratio Share as the: Ratio of a Transmission Customer s Network Load in a Zone to the total load in that Zone computed in accordance with Sections 34.4 and 34.5 of the Network Integration Transmission Service under Part III of this Tariff and calculated on a calendar year basis, for the prior calendar year. Customer loads used to determine the Load Ratio Share shall be adjusted for real power losses in accordance with the provisions set out in Section 8.5 of this Tariff. (continued...)
7 The Honorable Kimberly D. Bose October 9, 5 Page 7 less any amount reallocated in accordance with Section IV.A of Attachment J of the Tariff 7 and less any Schedule 7 and 8 revenues allocated to each Transmission Owner in the Zone under Attachment L for the previous calendar year. 8 In addition, Section 34.()(a) now clarifies that, [f]or each Transmission Owner utilizing a formula rate, the Transmission Provider shall not make an adjustment for Schedule 7 and 8 revenues if the Schedule 7 and 8 revenues are credited and updated on an annual basis in the Transmission Owner formula rate. 9 Conversely, to account for any PTP revenues that (i) may have been used in a determination of Transmission Owner s Zonal ATRR in a prior rate proceeding; or (ii) included as an input into the Transmission Owner s formula rate but not otherwise updated on an annual basis, Section 34.()(b) now clarifies that: For each Transmission Owner utilizing a stated rate or utilizing a formula rate without annual update of the Schedule 7 and 8 revenue credits, the Schedule 7 and 8 revenue adjustment described in this Section 34.() shall be offset by the amount of Schedule 7 and 8 revenues, if any, already credited in the calculation of the Zonal ATRR shown in Table, Section I of Attachment H. The amount of Schedule 7 and 8 revenues already credited in calculation of the Zonal ATRR shown in Table, Section I of Attachment H for such Transmission Owner is shown in Table 3, Section I of Attachment H. Furthermore, SPP has made corresponding revisions to Sections 34. (Monthly Demand Charge Zone ) and 34.3 (Monthly Demand Charge Zone ) of the Tariff. Regarding Section 34., SPP has revised the Tariff to make clear that the Network Customer shall pay a monthly Demand Charge for Network Load located within Zone and that [t]he component of such Demand Charge for American Electric Power s revenue requirement shall be calculated in accordance with Addendum of Attachment H which is consistent with the current Tariff construct in this section. Additionally, (... continued) Tariff at Part I, Section L - Definitions Section IV.A of Attachment J of the Tariff provides for the reallocation of Zonal and/or Base Plan Zonal ATRR to the Region-Wide ATRR under SPP s Balanced Portfolio construct to account for a benefit/cost deficiency in a zone. Proposed Tariff at Section 34.()-(). Proposed Tariff at Section 34.()(a). Proposed Tariff at Section 34.()(b). Proposed Tariff at Section 34..
8 The Honorable Kimberly D. Bose October 9, 5 Page 8 SPP proposes to clarify that the component of the Demand Charge for other Transmission Owners in the zone will be calculated in accordance with Section 34.. SPP has also revised Sections 34. to further provide that [a]ll components of the Demand Charge for Zone shall be adjusted as provided in Section 34. for any amount reallocated in accordance with Section IV.A of Attachment J and for any Schedule 7 and 8 revenues allocated to each Transmission Owner in the Zone under Attachment L. This added language recognizes reallocation of revenues as provided in other parts of the Tariff. SPP has made comparable revisions to Section 34.3 of the Tariff regarding the monthly Demand charge for Network Load located within Zone. 3 These revisions are just and reasonable because they clarify how SPP will account for credits for PTP revenues in determining the monthly Demand Charge if the Transmission Owner s formula rate does not already do so. In this manner, these revisions prevent a Transmission Owner from over-recovering its revenue requirements by failing to offset its Zonal ATRR by the PTP revenues it receives.. Schedule (Base Plan Zonal Charge and Region-wide Charge) With this filing, SPP also proposes to revise Schedule of the Tariff for the purpose of calculating Base Plan Zonal Charges 4 and Region-wide Charges 5 to Resident Load. 6 SPP will adjust the Base Plan Zonal ATRR and Region-wide Annual Proposed Tariff at Section 34.. See Proposed Tariff at Section In Zone, SPS component of the Monthly Demand Charge is calculated in accordance with Addendum 5 of Attachment H. Id. The Tariff defines Base Plan Zonal Charge as the Zonal component of the charge assessed by the Transmission Provider in accordance with Schedule to recover the revenue requirement of facilities classified as Base Plan Upgrades. Tariff at Part I, Section B Definitions. The Tariff defines Region-wide Charge as the Regional component of the charge assessed by the Transmission Provider in accordance with Schedule to recover the Region-wide Annual Transmission Revenue Requirement. Tariff at Part I, Section R Definitions. Resident Load includes load served by Network Customers taking Network Integration Transmission Service to serve their Network Load under the Tariff or a Transmission Owner s bundled retail load for which the Transmission Owner is not taking NITS or PTP Transmission Service and certain load being service under a Grandfathered Agreement. See Tariff at Part I, Section R Definitions (continued...)
9 The Honorable Kimberly D. Bose October 9, 5 Page 9 ATRR to account for both Base Plan Zonal and Region-wide PTP revenues collected in the prior calendar year. Specifically, SPP has added a new Section II.A to Schedule, which provides that SPP shall sum the applicable, Commission-approved annual transmission revenue requirements for upgrades eligible for cost recovery under this Schedule, as allocated in accordance with Attachment J of this Tariff. 7 Revised Section II.A further provides that a Transmission Owner s revenue requirement will be reduced by the amount of PTP revenues it receives during the previous calendar year resulting from charges under Section III of Schedule, if such revenues were not already used in calculating the Transmission Owner s revenue requirement. 8 As with SPP s proposed revisions to Section 34 of the Tariff, the proposed language in the new Section II.A. of Schedule draws a distinction between Transmission Owners that utilize a formula rate that already provides for crediting of annual PTP revenues and those that do not. For each Transmission Owner utilizing a formula rate that already provides for such updating and crediting, SPP will not make an adjustment to the Transmission Owner s revenue requirement. 9 For each Transmission Owner utilizing a stated rate or utilizing a formula rate that does not utilize Schedule PTP revenue credits in determining the Transmission Owner s revenue requirement, proposed Section II.A provides that SPP will reduce the Transmission Owner s revenue requirement by the amount of PTP revenues received by the Transmission Owner, and the reduction will be offset by the amount of PTP revenue, if any, that was already credited in the calculation of the Transmission Owner s annual revenue requirements that are included in the Base Plan Zonal ATRR and Region-wide ATRR. 3 Like the revisions discussed in Section II.B., supra, these revisions are just and reasonable because they ensure that PTP revenues received by a Transmission Owner are (... continued) (defining Resident Load as The load specified in Section 4 of the Tariff. See also id. at Section 4 (Applicability to Resident Load) Proposed Tariff at Schedule Section II.A. Proposed Tariff at Schedule Section II.A. Proposed Tariff at Schedule Section II.A.. Proposed Tariff at Schedule Section II(A)(). SPP has also included language in Section II(A)() to specify that the amount of revenue resulting from Base Plan Zonal Charges and Region-wide Charges for PTP Transmission Service that are already credited in the calculation of the Transmission Owner s ATRRs included in the Base Plan Zonal ATRR and Region-wide ATRR is shown in Table 3, Section of Attachment H. Id.
10 The Honorable Kimberly D. Bose October 9, 5 Page used to offset the Transmission Owner s revenue requirements for Base Plan Zonal and Region-wide charges to ensure Transmission Owners recover its appropriate ATRR under the Tariff Attachment H (Annual Transmission Revenue Requirement for Network Integration Transmission Service) SPP proposes to revise Attachment H of the Tariff to add a new Section I.7 and Table 3, which will set forth each Transmission Owner s PTP revenues that are accounted for in calculating the Transmission Owner s ATRR for NITS. The revisions provide that SPP will use Schedules 7, 8, and/or PTP revenues to offset the ATRRs for Transmission Owners that do not already account for such revenues under a formula rate. 3 New Section I.7 also provides that, for Transmission Owners using a formula rate that already annually updates and credits Schedules 7 and 8 revenues and/or PTP Schedule revenues, the Table 3 entries will read Not Applicable. 33 SPP has also made minor clarifying and conforming revisions to Addendum and Addendum 5 of Attachment H of the Tariff, which set forth the calculation of the Monthly Demand Charges in Zones (for AEP-West) and (for SPS), respectively. 34 Furthermore, SPP proposes to delete language in Addendum to Attachment H addressing the calculation of a Monthly Demand Charge associated with East Texas Electric Cooperative, Inc., Tex-La Electric Cooperative of Texas, Inc., and Deep East Teas Electric Cooperative, Inc. 35 SPP removes this language because it is superseded by SPP also proposes minor changes to renumber various sections of Schedule to reflect the addition of new Section II.A and to eliminate redundant and unnecessary language. See, e.g., Proposed Tariff at Schedule Sections III.A (removing Revenue Rates and Requirements File because it is defined elsewhere in the Tariff), III.C.5 (removing posted on the SPP website because it is stated elsewhere in the Tariff). SPP also proposes revisions to the definitions of Base Plan Zonal Load Ratio Share and Region-wide Load Ratio Share to reflect the renumbering of Schedule. Proposed Tariff at Part I, B Definitions and R Definitions. Proposed Tariff at Attachment H Section I.7. Schedules 7 & 8 PTP revenues will be reflected in Column 3 of Table 3, and Schedule PTP revenues will be reflected in Column 4. To the extent there are no PTP revenues the value will reflect $. Proposed Tariff at Attachment H Section I.7. Proposed Tariff at Attachment H Addendum and Addendum 5, Part. Proposed Tariff at Attachment H Addendum.
11 The Honorable Kimberly D. Bose October 9, 5 Page the revisions SPP proposes elsewhere in this filing to clarify the crediting of PTP revenues. The revisions to Attachment H are just and reasonable because they further the purposes of this filing to implement proper crediting of PTP revenues in each Transmission Owner s ATRR that is used to calculate the Monthly Demand Charge and Base Plan charges for NITS. 4. Attachment L (Treatment of Revenues) SPP proposes to revise Section II.C. of Attachment L of the Tariff (which governs PTP revenue distribution associated with Zonal revenue requirements to include language specifying that, in determining revenue distribution for PTP revenues, a Transmission Owner s owner-specific zonal annual revenue requirement is to be adjusted in accordance with the language in new Section 34.() of the Tariff. 36 In other words, this language clarifies that PTP revenues will reduce the Zonal ATRR for any amount received not already credited. The total Zonal ATRR is comprised of the individual Transmission Owner s OZRRs for multi-transmission Owner zones. SPP also proposes to revise Section III.A of Attachment L of the Tariff (which governs distribution of PTP revenues collected under Schedule ) to clarify that, when distributing revenues associated with Base Plan Zonal ATRR and with Region-wide ATRR, the revenues distributed to Transmission Owners owning Base Plan Upgrades, upgrades within approved Balanced Portfolios, or approved Interregional Projects shall be reduced to account for Schedule PTP revenue. 37 In other words, PTP revenues will be subtracted from the Base Plan, Balanced Portfolio, and Interregional ATRRs based on the calculation of PTP revenues under each individual type. 5. Attachment T (Rate Sheets for Point-to-Point Transmission Service) Attachment T of the Tariff contains the rate sheets for firm and non-firm PTP for each SPP pricing zone (Schedules 7 and 8), based on the ATRR of the Transmission Owners in the zone. SPP proposes to revise the rate sheets for each pricing zone to include language addressing PTP revenue crediting for PTP rates. The new language clarifies that, for each of the Transmission Owners in the zone, rates for PTP under Attachment T will reflect any adjustments for Schedule 7 and 8 revenues implemented in Proposed Tariff at, Attachment L Sections II.C()-(3). The owner-specific zonal annual revenue requirement is defined by the acronym OZRR in Attachment L Section B.. Proposed Tariff at Attachment L Section III(A).
12 The Honorable Kimberly D. Bose October 9, 5 Page accordance with Section 34.() of the Tariff. 38 The new language also clarifies that [t]he rates, including any applicable Schedule 7 and 8 revenue adjustment, shall be set forth in the [Revenue Requirements and Rates] File, which is posted on the SPP website. 39 [Remainder of page intentionally left blank] Proposed Tariff at Attachment T. SPP also proposes a revision in the Attachment T rate sheet for Zone, the SPS Zone, to remove references to Tri County Formula Rate and Addendum 7 of Attachment H that SPP inadvertently did not remove from the Tariff as part of its compliance filing in Docket No. ER Id.; see also Compliance Filing of Southwest Power Pool, Inc., Docket No. ER (Oct. 3, 4). Proposed Tariff at Attachment T. The Revenue Requirements and Rates File is defined as: A file posted on the SPP website as a reference to: (i) Annual Transmission Revenue Requirements (ATRRs) for Network Integration Transmission Service, as referenced in Attachment H to this Tariff; (ii) Base Plan ATRR allocation; (iii) allocation factors for Base Plan funded projects; (iv) notes on the calculation of Base Plan ATRR amounts on a Region-wide and Zonal basis; (v) ATRR reallocation for Balanced Portfolio projects; (vi) the calculation of Base Plan Point-To-Point Transmission Service rates on a Regionwide and Zonal basis in accordance with Schedule ; and (vii) the rates for Point-To-Point Transmission Service as referenced in Attachment T in accordance with Schedules 7 and 8. Tariff at Part I, Section R Definitions.
13 The Honorable Kimberly D. Bose October 9, 5 Page 3 III. EFFECTIVE DATE AND APPLICABILITY OF TARIFF REVISIONS SPP respectfully requests that the Tariff revisions proposed in this filing be made effective on January, 6, which is not less than sixty days, or more than days prior to, the submission of this filing as required by the Commission. 4 This effective date will allow SPP to implement the changes on the first day of the monthly billing cycle that commences sixty days after filing. 4 IV. ADDITIONAL INFORMATION A. Information Required by the Commission s Regulations. Documents submitted with this filing: In addition to this transmittal letter, SPP submits clean and redlined versions of the proposed Tariff revisions in electronic format.. Effective date: SPP requests that the Commission accept the proposed revisions to the Tariff effective January, 6, as discussed above. 3. Service: SPP has electronically served a copy of this filing on all its Members, Market Participants and Transmission Customers. A complete copy of this filing will be posted on the SPP web site, and is also being served on all affected state commissions. 4. Requisite agreements: There are none. 4 4 See 8 C.F.R at (a) (). An effective date of January, 6 will allow SPP to properly account for all 5 PTP revenues consistent with Section 34. of the Tariff, which provides that the Network Customers monthly Demand Charge shall be reduced by any Schedule 7 and 8 revenues allocated to each Transmission Provider in the zone pursuant to Attachment L for the previous calendar year (emphasis added)
14 The Honorable Kimberly D. Bose October 9, 5 Page 4 5. Estimate of transactions and revenues: Not applicable. 6. Basis of rates: The basis for the proposed revisions is explained above. 7. Comparison to rates for similar services: Not applicable. 8. Specifically assignable facilities installed or modified: There are none. B. Communications Correspondence and communications with respect to this filing should be sent to, and SPP requests that the Commission include on the official service list for this proceeding, the following individuals: Nicole Wagner Manager Regulatory Policy Southwest Power Pool, Inc. Worthen Drive Little Rock, AR 73 Telephone: (5) Fax: (5) 48- jwagner@spp.org Matthew Harward Attorney Southwest Power Pool, Inc. Worthen Drive Little Rock, AR 73 Telephone: (5) Fax: (5) 48- mharward@spp.org [Remainder of page intentionally left blank]
15 The Honorable Kimberly D. Bose October 9, 5 Page 5 V. CONCLUSION For all of the foregoing reasons, SPP respectfully requests that the Commission accept the Tariff revisions submitted in this filing as just and reasonable, effective January, 6. Respectfully submitted, /s/ Matthew Harward Matthew Harward Southwest Power Pool, Inc. Worthen Drive Little Rock, AR 73 Telephone: (5) mharward@spp.org Attorney for Southwest Power Pool, Inc.
16 Southwest Power Pool, Inc. Open Access Transmission Tariff Sixth Revised Volume No. Superseding Fifth Revised Volume No.
17 I. COMMON SERVICE PROVISIONS Definitions A - Definitions B - Definitions C - Definitions D - Definitions E - Definitions F - Definitions G - Definitions H - Definitions I - Definitions J - Definitions K - Definitions L - Definitions M - Definitions N - Definitions O - Definitions P - Definitions Q - Definitions R - Definitions S - Definitions T - Definitions U - Definitions V - Definitions W - Definitions XYZ - Definitions Initial Allocation and Renewal Procedures. Initial Allocation of Available Transfer Capability. Reservation Priority For Existing Firm Service Customers 3 Ancillary Services 4 Open Access Same-Time Information System (OASIS) 5 Local Furnishing Bonds 5. Transmission Owners That Own Facilities Financed by Local Furnishing Bonds or that are Tax Exempt Entities 5. Alternative Procedures for Requesting Transmission Service 6 Reciprocity 7 Billing and Payment 7. Billing Procedure 7. Interest on Unpaid Balances 7.3 Financial Security Held By SPP 7.4 Customer Default 8 Accounting for Use of the Tariff 8. Study Costs and Revenues 9 Regulatory Filings Force Majeure and Indemnification. Force Majeure
18 II.. Liability.3 Indemnification.4 Further Limitation of Liability.5 Transmission Provider Recovery Creditworthiness Dispute Resolution Procedures. Internal Dispute Resolution Procedures. External Arbitration Procedures.3 Arbitration Decisions.4 Costs.5 Rights Under The Federal Power Act POINT-TO-POINT TRANSMISSION SERVICE 3 Nature of Firm Point-To-Point Transmission Service 3. Term 3. Reservation Priority 3.3 Use of Firm Transmission Service by the Transmission Owners 3.4 Service Agreements 3.5 Transmission Customer Obligations for Facility Additions or Redispatch Costs 3.6 Curtailment of Firm Transmission Service 3.7 Classification of Firm Transmission Service 3.8 Scheduling of Firm Point-To-Point Transmission Service 4 Nature of Non-Firm Point-To-Point Transmission Service 4. Term 4. Reservation Priority 4.3 Use of Non-Firm Point-To-Point Transmission Service by the Transmission Owner(s) 4.4 Service Agreements 4.5 Classification of Non-Firm Point-To-Point Transmission Service 4.6 Scheduling of Non-Firm Point-To-Point Transmission Service 4.7 Curtailment or Interruption of Service 5 Service Availability 5. General Conditions 5. Determination of Available Transfer Capability 5.3 Initiating Service in the Absence of an Executed Service Agreement 5.4 Obligation to Provide Transmission Service that Requires Expansion or Modification of the Transmission System 5.5 Deferral of Service 5.6 Other Transmission Service Schedules 5.7 Real Power Losses 6 Transmission Customer Responsibilities 6. Conditions Required of Transmission Customers 6. Transmission Customer Responsibility for Third-Party Arrangements 7 Procedures for Arranging Firm Point-To-Point Transmission Service 7. Application 7.a Time Requirements
19 7. Completed Application 7.3 Credit Arrangements 7.4 Notice of Deficient Application 7.5 Response to a Completed Application 7.6 Execution of Service Agreement 7.7 Extensions for Commencement of Service 7.8 Designated Resources Using Long-Term Point-To-Point Transmission Service 7.9 Interconnection of Delivery Points 8 Procedures for Arranging Non-Firm Point-To-Point Transmission Service 8. Application 8. Completed Application 8.3 Timing of Requests and Responses Regarding Reservation of Non-Firm Point-To-Point Transmission Service 8.4 Determination of Available Transfer Capability 9 Additional Study Procedures For Firm Point-To-Point Transmission Service Requests 9. Notice of Need for System Impact Study 9. System Impact Study Agreement and Cost Reimbursement 9.3 System Impact Study Procedures 9.4 Facilities Study Procedures 9.5 Facilities Study Modifications 9.6 Due Diligence in Completing New Facilities 9.7 Partial Interim Service 9.8 Expedited Procedures for New Facilities 9.9 Reporting Failure to Meet Study Deadlines Procedures if The Transmission Provider is Unable to Complete New Transmission Facilities for Firm Point-To-Point Transmission Service. Delays in Construction of New Facilities. Alternatives to the Original Facility Additions.3 Refund Obligation for Unfinished Facility Additions Provisions Relating to Transmission Construction and Services on the Systems of Other Utilities. Responsibility for Third-Party System Additions. Coordination of Third-Party System Additions Changes in Service Specifications. Modifications On a Non-Firm Basis. Additional Charge To Prevent Abuse.3 Modification On a Firm Basis 3 Sale or Assignment of Transmission Service 3. Procedures for Assignment or Transfer of Service 3. Limitations on Assignment or Transfer of Service 3.3 Information on Assignment or Transfer of Service 4 Metering and Power Factor Correction at Receipt and Delivery Points(s) 4. Transmission Customer Obligations 4. Transmission Provider Access to Metering Data
20 III. 4.3 Power Factor 5 Compensation for Transmission Service 6 Stranded Cost Recovery 7 Compensation for New Facilities and Redispatch Costs NETWORK INTEGRATION TRANSMISSION SERVICE 8 Nature of Network Integration Transmission Service 8. Scope of Service 8. Transmission Provider and Transmission Owners Responsibilities 8.3 Network Integration Transmission Service 8.4 Secondary Service 8.5 Real Power Losses 8.6 Restrictions on Use of Service 9 Initiating Service 9. Condition Precedent for Receiving Service 9. Application Procedures 9.3 Technical Arrangements to be Completed Prior to Commencement of Service 9.4 Network Customer Facilities 9.5 Filing of Service Agreement 3 Network Resources 3. Designation of Network Resources 3. Designation of New Network Resources 3.3 Termination of Network Resources 3.4 Operation of Network Resources 3.5 Network Customer Redispatch Obligation 3.6 Transmission Arrangements for Network Resources Not Physically Interconnected With The Transmission Provider 3.7 Limitation on Designation of Network Resources 3.8 Use of Interface Capacity by the Network Customer 3.9 Network Customer Owned Transmission Facilities 3 Designation of Network Load 3. Network Load 3. New Network Loads Connected With the Transmission Provider 3.3 Network Load Not Physically Interconnected with the Transmission Provider 3.4 New Interconnection Points 3.5 Changes in Service Requests 3.6 Annual Load and Resource Information Updates 3 Additional Study Procedures For Network Integration Transmission Service Requests 3. Notice of Need for System Impact Study 3. System Impact Study Agreement and Cost Reimbursement 3.3 System Impact Study Procedures 3.4 Facilities Study Procedures 3.5 Penalties for Failure to Meet Study Deadlines 3.6 Facilities Study Modifications
21 IV. 3.7 Due Diligence in Completing New Facilities 3.8 Partial Interim Service 3.9 Expedited Procedures for New Facilities 3. Delays in Construction of New Facilities 3. Alternatives to the Original Facility Additions 33 Load Shedding and Curtailments 33. Procedures 33. Transmission Constraints 33.3 Cost Responsibility for Relieving Transmission Constraints 33.4 Curtailments of Scheduled Deliveries 33.5 Allocation of Curtailments 33.6 Load Shedding 33.7 System Reliability 34 Rates and Charges 34. Monthly Demand Charge 34. Monthly Demand Charge Zone 34.3 Monthly Demand Change Zone 34.4 Determination of Network Customer's Monthly Network Load 34.5 Determination of Transmission Provider's Monthly Zone Transmission Load 34.6 Redispatch Charge 34.7 Stranded Cost Recovery 34.8 SPP Costs 34.9 Monthly Demand Charge Zone 35 Operating Arrangements 35. Operation under the Network Operating Agreement 35. Network Operating Agreement 36 Scheduling SPECIAL RULES ON USE OF TARIFF 37 During Transition Period 37. Service Not Required for Bundled Customers or Customers Under Retail Access Programs 37. Availability of Network Integration Transmission Service 37.3 Unbundled Wholesale 37.4 Grandfathered Transactions 38 After Transition Period 38. Applicability to Retail Load Having Choice 38. Applicability to All Retail Load Not Having Choice 38.3 Grandfathered Agreements 39 Applicability of Non-Rate Terms and Conditions 39. Subject to State Laws and Regulations and Public Power Rate Schedules 39. Bundled Retail and Grandfathered Load 39.3 Participation by Western Area Power Administration Subject to Federal Laws and Regulations 39.4 Applicability to Rural Electric Cooperatives
22 V. RECOVERY OF COSTS FOR BASE PLAN UPGRADES AND APPROVED BALANCED PORTFOLIOS 4 Base Plan Zonal Charge and Region-wide Charge 4 Applicability to Resident Load 4 Applicability to Point-To-Point Transmission Service SCHEDULE Scheduling, System Control and Dispatch Service SCHEDULE -A Tariff Administration Service SCHEDULE Reactive Supply and Voltage Control from Generation or Other Sources Service SCHEDULE 3 Regulation and Frequency Response Service SCHEDULE 4 Energy Imbalance Service SCHEDULE 5 Operating Reserve - Spinning Reserve Service SCHEDULE 6 Operating Reserve - Supplemental Reserve Service SCHEDULE 7 Long-Term Firm and Short-Term Firm Point-To-Point Transmission Service SCHEDULE 8 Non-Firm Point-To-Point Transmission Service SCHEDULE 9 Network Integration Transmission Service SCHEDULE Wholesale Distribution Service SCHEDULE Base Plan Zonal Charge and Region-wide Charge SCHEDULE FERC Assessment Charge ATTACHMENT A Form Of Service Agreement For Firm Point-To-Point Transmission Service ATTACHMENT A- Form Of Service Agreement For The Resale, Reassignment Or Transfer Of Point-To- Point Transmission Service ATTACHMENT B Form Of Service Agreement For Non-Firm Point-To-Point Transmission Service ATTACHMENT C Methodology To Assess Available Transfer Capability ATTACHMENT D Methodology for Completing a System Impact Study ATTACHMENT E Index Of Point-To-Point Transmission Service Customers ATTACHMENT F Service Agreement For Network Integration Transmission Service
23 ATTACHMENT G Network Operating Agreement ATTACHMENT H Annual Transmission Revenue Requirement for Network Integration Transmission Service ATTACHMENT I Index Of Network Integration Transmission Service Customers ATTACHMENT J Recovery Of Costs Associated With New Facilities ATTACHMENT K Redispatch Procedures and Redispatch Costs ATTACHMENT L Treatment Of Revenues ATTACHMENT M Loss Compensation Procedure ATTACHMENT N [Reserved for Future Use] ATTACHMENT O Transmission Planning Process ATTACHMENT P Transmission Service Timing Requirements ATTACHMENT Q Form of Application For Short-Term Firm and Non-Firm Transmission Service ATTACHMENT R North American Electric Reliability Council Transmission Loading Relief ( TLR ) Procedure ATTACHMENT R- North American Energy Standards Board Business Practices ATTACHMENT S Procedure for Calculation of MW-Mile Impacts for Use in Revenue Requirements, Revenue Allocation and Determination of Losses ATTACHMENT T Rate Sheets For Point-To-Point Transmission Service ATTACHMENT U Rate Schedule For Compensation For Rescheduled Maintenance Costs ATTACHMENT V Coordinated Generation Interconnection Procedures ATTACHMENT W Index of Grandfathered Agreements ATTACHMENT X Credit Policy ATTACHMENT Y Transmission Owner Designation Process ATTACHMENT Z Aggregate Transmission Service Study Procedures and Cost Allocation and Recovery for Service Upgrades
24 ATTACHMENT Z Compensation for Upgrade Sponsors ATTACHMENT AA Reserved for Future Use ATTACHMENT AB Reserved For Future Use ATTACHMENT AC Reservation Processing Method For Short Term Firm Transmission Service ATTACHMENT AD Southwestern Power Administration Agreement Between United States Of America and Southwest Power Pool, Inc. ATTACHMENT AE Integrated Marketplace ATTACHMENT AF Market Power Mitigation Plan ATTACHMENT AG Market Monitoring Plan ATTACHMENT AH Market Participant Service Agreement ATTACHMENT AI Transmission Definition ATTACHMENT AJ Reserved for Future Use ATTACHMENT AK Treatment of Reserve Sharing Charges and Revenues ATTACHMENT AL Form of Non-Disclosure Agreement for Authorized Requestors ATTACHMENT AM Meter Agent Services Agreement ATTACHMENT AN Balancing Authorities Agreement ATTACHMENT AO Agreement Establishing External Generation Non-Physical Electrical Interconnection Point ATTACHMENT AP Allocation of Cost Associated with Reliability Penalty Assessments ATTACHMENT AQ Delivery Point Addition Process ATTACHMENT AR Screening Study
25 B - Definitions Balanced Portfolio: A set of transmission upgrades that provides economic benefits across the SPP Region that meet the requirements in Sections IV.3 and IV.4 of Attachment O. Balanced Portfolio Region-wide Annual Transmission Revenue Requirement: The annual transmission revenue requirement for an approved Balanced Portfolio determined in accordance with Attachment J to this Tariff. Balancing Authority: The responsible entity that integrates resource plans ahead of time, maintains load-interchange-generation balance within a Balancing Authority Area, and supports Interconnection frequency in real time in order to: () Match, at all times, the power output of the generators within the electric power system(s) and capacity and energy purchased from entities outside the electric power system(s), with the load within the electric power system(s); () Maintain scheduled interchange with other Balancing Authority Areas, within the limits of Good Utility Practice; (3) Maintain the frequency of the electric power system(s) within reasonable limits in accordance with Good Utility Practice; and (4) Provide for sufficient generating capacity to maintain operating reserves in accordance with Good Utility Practice. Balancing Authority Area: The collection of generation, transmission, and loads within the metered boundaries of the Balancing Authority. The Balancing Authority maintains load-resource balance within this area. Base Plan Region-wide Annual Transmission Revenue Requirement: The sum of the annual transmission revenue requirement for each Base Plan Upgrade and of the Accredited Revenue Requirement(s), if any, that are allocated to the SPP Region in accordance with Attachment J to this Tariff.
26 Base Plan Upgrades: Those upgrades included in and constructed pursuant to the SPP Transmission Expansion Plan in order to ensure the reliability of the Transmission System. Base Plan Upgrades shall also include: (i) those Service Upgrades required for new or changed Designated Resources to the extent allowed for in Attachment J to this Tariff, (ii) ITP Upgrades that are approved for construction by the SPP Board of Directors, and (iii) high priority upgrades, excluding Balanced Portfolios, that are approved for construction by the SPP Board of Directors. For Zones through 5, all such upgrades shall specifically exclude planned Transmission System facilities identified in the SPP Transmission Expansion Plan that are: (i) placed in service during the 5 calendar year or (ii) required to be in service to meet the SPP Criteria and the NERC Reliability Standards for the summer of 5. For Zones 6, 7, and 8, all such upgrades shall specifically exclude planned Transmission System facilities in those zones identified in the SPP Transmission Expansion Plan Report (9 8) that are required to be in service to meet the SPP Criteria and the NERC Reliability Standards for the summer of 8 or which are in operation prior to January, 9, except for those upgrades that are in service prior to January, 9 and are components of Phase of the NPPD 345kV Norfolk to Lincoln (ETR) project or OPPD Sub 55/3455 Transformer project. Network Upgrades that are components of Phase of the NPPD 345kV Norfolk to Lincoln (ETR) project or OPPD Sub 55/3455 Transformer project that are in service prior to January, 9 will be Base Plan Upgrades, however, the Zonal component of the costs shall be % allocated to the respective host zone. The Base Plan Upgrades in Zones through 8 identified by the Transmission Provider with a need date prior to October, 5 shall not be allocable to Zone 9. The upgrades in Zone 9 identified by the Transmission Provider with a need date prior to October, 5, shall not constitute Base Plan Upgrades. The facilities identified in Schedule to Attachment J are expressly deemed to be Base Plan Upgrades pursuant to Attachment J, Section III.A.. Base Plan Zonal Annual Transmission Revenue Requirement: For each Zone, the sum of the annual transmission revenue requirement for each Base Plan Upgrade and of the Accredited Revenue Requirement(s), if any, that are allocated to the Zone in accordance with Attachments J and S to this Tariff.
27 Base Plan Zonal Charge: Zonal component of the charge assessed by the Transmission Provider in accordance with Schedule to recover the revenue requirement of facilities classified as Base Plan Upgrades. Base Plan Zonal Load Ratio Share: Ratio of a Network Customer's or Transmission Owner s Resident Load in a Zone to the total load in that Zone computed in accordance with Section II.B to Schedule of this Tariff and calculated on a calendar year basis, for the prior calendar year. Customer loads used to determine the Base Plan Zonal Load Ratio Share shall be adjusted for real power losses in accordance with the provisions set out in Section 8.5 of this Tariff. Base Plan Zonal Rate: Zonal component of the rate (per kw of Reserved Capacity for Point-To-Point Transmission Service) assessed by the Transmission Provider in accordance with Schedule to recover the revenue requirement of facilities classified as Base Plan Upgrades. Business Day: A day on which the Federal Reserve System is open for business.
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