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Commissioner Bernard L. McNamee Statement
October 4, 2019

Docket No. ER19-2524-000 PDF

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Joint Statement of Commissioner Bernard L. McNamee and Chairman Neil Chatterjee on Southwest Power Pool, Inc., To Comply with the Fair Rates Act of 2018

On August 2, 2019, pursuant to section 205 of the Federal Power Act (FPA)1 and part 35 of the Commission’s regulations,2 Southwest Power Pool, Inc. (SPP) submitted revisions to its Membership Agreement (Membership Agreement)3 to add definitions for the terms Load Serving Entity (LSE) and non-LSE. On October 1, 2019, SPP’s proposed revisions to the Membership Agreement went into effect by operation of law. 4

If the Commission does not act on a filing made pursuant to section 205 of the FPA within the 60-day period established therein because the Commission lacks a quorum, FPA section 205(g)(1)(B) requires each Commissioner to “add to the record of the Commission a written statement explaining the views of the Commissioner with respect to the change.”5 As we explain below, we would have voted to accept SPP’s proposed definitions.

I. Background

As part of a broader set of revisions to the SPP Bylaws and Membership Agreement, SPP proposed revisions to its Membership Agreement in 2013 to require a member to post a deposit, at the time the member provides its notice of intent to withdraw, to defray any costs SPP would incur to process the member’s withdrawal from membership in SPP. At the time, SPP proposed basing the amount of the deposit on whether the member is an LSE or a non-LSE, with the former submitting a $150,000 deposit and the latter submitting a $50,000 deposit. SPP proposed trueing up or down the deposit based on actual costs, with the member either receiving an invoice for any additional costs exceeding the deposit or a refund of any unexpended deposit amounts. On September 19, 2013, the Commission accepted the proposed withdrawal deposit provisions in the SPP Membership Agreement.6

In the instant filing, SPP explains that despite imposing a withdrawal deposit on members based on whether the member is an LSE or non-LSE, the Membership Agreement does not define the terms “Load Serving Entity” and “Non-Load Serving Entity.” SPP thus proposes revisions to section 1.0 of its Membership Agreement to add these definitions. Specifically, SPP proposes the following definition for “Load Serving Entity” in the Membership Agreement:

    A Member that: (1) is a distribution utility or an electric utility that has a service obligation, where a service obligation, as defined in Section 217(a) of the [FPA], means a requirement applicable to, or the exercise of authority granted to, an electric utility under Federal, State, or local law or under long-term contracts to provide electric service to end-users or to a distribution utility (as defined in Section 217(a) of the [FPA]); and/or (2) secures energy and transmission service (and related Interconnected Operations Services) to serve the electric demand and energy requirements of its end-use customers. A Load Serving Entity may or may not be a Transmission Owner or transmission customer under the [Open Access Transmission Tariff (OATT)].7

SPP also proposes to define non-LSE to mean any member that does not satisfy the definition of LSE.8

SPP asserts that the proposed definitions are just and reasonable because they address a gap in the current Membership Agreement and will provide greater clarity to all members as to which level of withdrawal deposit will apply in the event that a member submits a notice of intent to withdraw.9 SPP further asserts that the revisions are just and reasonable because they rely on Commission-accepted definitions set forth in the OATT, under which SPP members have long been operating and should be familiar. SPP requests that the Commission accept the proposed revisions to the SPP Membership Agreement effective October 1, 2019.10

II. Discussion

We would have accepted SPP’s proposed revisions to its Membership Agreement, effective October 1, 2019, as requested, and found the proposed definitions just and reasonable and not unduly discriminatory or preferential. We would have acknowledged that the proposed definitions are consistent with the definitions for LSE in Attachments C and AE in SPP’s OATT and agreed with SPP that defining these terms in the Membership Agreement provides clarity to members as to which level of withdrawal deposit will apply in the event that a member submits a notice of intent to withdraw.

We also would have rejected the arguments raised by Public Interest Organizations in this proceeding.11 Although Public Interest Organizations filed their comments and protest in the instant proceeding, their comments and protest pertain to issues under consideration in Docket Nos. ER19 2522 000 and ER19 2523 000, which are pending before the Commission.12 We would have found that Public Interest Organizations’ comments and protest were outside the scope of this proceeding and are better addressed in Docket Nos. ER19-2522-000 and ER19-2523-000.

We note that, given the lack of quorum at the time of the statutory deadline for Commission action on SPP’s proposed revisions to its Membership Agreement, we were unable to fully discuss the issues that arose in this proceeding with our fellow Commissioner, whose arguments we would have thoughtfully considered. To the extent any of those discussions raised new issues for consideration, we would have carefully considered those matters and incorporated them into the decision-making process.


    1 16 U.S.C. § 824d (2018).
    2 18 C.F.R. pt. 35 (2019).
    3 SPP, Governing Documents Tariff, Membership Agreement, First Revised Volume No. 3.
    4 Sw. Power Pool, Inc., Docket No. ER19-2524-000, Notice of Filing Taking Effect by Operation of Law (Oct. 2, 2019).
    5 16 U.S.C. § 824d(g)(1)(B).
    6 Sw. Power Pool, Inc., 144 FERC ¶ 61,208, at P 20 (2013).  See also SPP, Governing Document Tariff, Membership Agreement, § 4.2.1(b) (2.0.0).
    7 SPP, Governing Document Tariff, Membership Agreement § 1 (6.0.0). SPP states that it based the proposed LSE definition on definitions currently set forth in the SPP OATT; specifically, SPP’s proposed LSE definition combines the definitions contained in Attachments C (Methodology to Assess Available Transfer Capability) and AE (Integrated Marketplace) into a single definition such that any member that satisfies either definition will be considered to be an LSE under the Membership Agreement. SPP Transmittal at 4.
    8 SPP Transmittal at 4-5; SPP, Governing Document Tariff, Membership Agreement § 1 (6.0.0).
    9 SPP Transmittal at 5.
    11 Public Interest Organizations include: Alliance for Affordable Energy; Clean Grid Alliance; Climate + Energy Project; Natural Resources Defense Council; Sierra Club; Southern Renewable Energy Association; Sustainable FERC Project; and Western Resource Advocates. Public Interest Organizations submitted their comments and protest in Docket Nos. ER19-2522-000, ER19-2523-000, and ER19-2524-000.
    12 In Docket No. ER19-2522-000, SPP submitted a filing to comply with the Commission’s April 18, 2019 order in Docket No. EL19-11-000, which required changes to SPP’s exit fee structure. In Docket No. ER19-2523-000, SPP submitted a filing under FPA section 205 proposing an alternative exit fee structure to the one submitted in its compliance filing.
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