Zonal Placement & Cost Mitigation within SPP SPP Strategic - PowerPoint PPT Presentation

Zonal Placement & Cost Mitigation within SPP SPP Strategic Planning Committee April 20, 2017

Zonal Placement • Significant opportunity for stakeholder-wide agreement on zonal placement • Important to be codified in the SPP Tariff • Support most aspects of SPP’s zonal placement criteria • This recommendation only differs in regards to the minimum ATRR threshold

Zonal Placement Criteria • Same as SPP Proposal: • If the load was previously served through SPP Transmission Service then the Transferring Facilities should be included as a subzone and the rest of the criteria are ignored • If the ATRR of the Transferring Facilities is less than the minimum threshold and the number of miles, number of substations, or the load is less than the smallest applicable zone(s), respectively, then the Transferring Facilities should be included as a subzone • If the ATRR of the Transferring Facilities is greater than 50% of the minimum ATRR threshold but the number of miles and the load is not greater than the applicable zone(s), respectively, then the Transferring Facilities should be included as a subzone • In all other cases create a new zone

Zonal Placement Criteria • Different than SPP Proposal: • Minimum ATRR Threshold should account for both Schedule 9 and 11 zonal (11z) ATRR • Once a TO joins SPP much of the new ATRR that would otherwise be included in Schedule 9 is instead included in Schedule 11z • Without including Schedule 11z you are not comparing the size of the zones on a comparable scale • This is a settlement position – we believe the proper comparison is total ATRR paid by zonal customers, not a subset

New TO Informational Requirements • SPP should perform all rate impact calculations • The new TO (ATO) may not have all relevant information • Information requested from the ATO should only be that information related to the ATO’s facilities going into the expected zone

Comparability Assessment • The threshold for the comparability assessment should be, as FERC described, that the facilities are of a similar purpose to existing transmission within the zone • The threshold should not be whether the Transferring Facilities address issues that would have been identified by the incumbent TO’s local planning criteria – that would be unduly discriminatory • Criteria can change from time to time • Some TOs use internal guidelines in addition to formal criteria • Some transmission in the zone may have been built before the criteria • Legacy transmission may not have been built just to meet what is the current local criteria • This criteria did not apply when previous TOs joined SPP, either as a new zone or a subzone

Governing Documents • Any language related to cost mitigation must be included in the SPP Tariff • Transparent to FERC and allows a full vetting of any proposed mitigation policy • Doing otherwise is an attempt to hide the policy from FERC • Requires FERC approval and review before changes to any policy can be made • Doing otherwise will allow for frequent policy changes not subject to FERC review • Such language clearly impacts the rates, terms and conditions of transmission service • SPP may not set a policy that impacts rates, terms and conditions of transmission service without the input of FERC

Cost Mitigation

SPP Should Remain Neutral • SPP is required per the SPP Membership Agreement to file the TO’s ATRR • Discussions regarding cost mitigation belong at FERC – not SPP • All interested TOs, customers, states and other parties can participate • Best way for SPP to remain independent

NJ Docket Concept • Expected that a large majority of new entrants to SPP as subzones will be non-jurisdictional entities • “Holes in the donut” • At least one other RTO requires non-jurisdictional TOs to file their ATRRs separately so that the RTO simply files the FERC-approved or accepted rate from that docket • In CAISO, those filings are made in “NJ” dockets • Allows for a docket focused on the new ATRR coming into SPP • Keeps the RTO completely out of the ATO’s rate case • Leaves SPP filing focused only on zonal placement

Previous Comments This coalition previously provided comments via PowerPoint slides to the SPC which were posted as additional meeting materials. An email notice was not sent out. Those slides can be found at the link below or you can find them on the SPC meeting materials page under the name “SPC Additional Material 2 20170321” https://www.spp.org/Documents/48777/j.%20SPC%2 0Presentation%20on%20Cost%20Mitigation%20- %20KMEA%20MJMEUC%20SCMCN%20KPP%20OMPA .pdf