Media Statements & Speeches
Commissioner Richard Glick Statement
February 28, 2019
Docket No. ER16-1341-003
Commissioner Richard Glick on
Southwest Power Pool
Although I join today’s order, I recognize that the result is wholly inequitable. As the Commission explains, SPP’s tariff created a mechanism whereby an entity that pays for certain types of transmission upgrades may receive revenue credits from transmission customers that would not have been able to take transmission service but for those facilities.1 Those upgrade sponsors have undertaken significant financial expense to build transmission facilities, with the possibility of reimbursement presumably playing at least some role in their decision to incur that expense. However, as a result of SPP’s multi-year failure to follow its tariff, SPP did not collect from transmission customers the funds needed to reimburse upgrade sponsors for a period of time between 2008 and 2016 (the historical period).2 Now, as a result of today’s order, those upgrade sponsors will not receive the funds to which they should be entitled under SPP’s tariff.
I support today’s order, however, because I agree with the Commission’s conclusion that the billing limitation in section I.7.1 of SPP’s tariff prevents SPP from correcting its failure by retroactively changing the bills that certain transmission customers received during seven of the eight years in the historical period.3 I also agree that, notwithstanding the equities before us, the filed rate doctrine and the rule against retroactive ratemaking prevent us from granting SPP’s request to waive section I.7.1.4 Unfortunately, that leaves us without the authority to approve a remedy that would ensure that upgrade sponsors receive the revenue credits to which they should be entitled under SPP’s tariff.
I appreciate that the complexity of the crediting and billing practices in many organized markets can prove more difficult in practice than in theory. But, as today’s order illustrates, the failure to timely implement those practices, or take other remedial action,5 can leave market participants holding the bag for the market operator’s mistakes. I urge all RTOs and ISOs to consider whether to revise any billing limitations in their tariffs in order to ensure that they provide the flexibility needed to prevent the inequitable result in today’s order. In particular, I urge them to consider an approach similar to that in the New York Independent System Operator, Inc.’s (NYISO) Tariff, which permits the Commission to order the reopening of invoices that would otherwise be subject to a time bar.6 A safety valve of that type could go a long way toward avoiding a repeat of the unfortunate outcome here.
For these reasons, I respectfully concur.
- 1 Southwest Power Pool, Inc., 166 FERC ¶ 61,160, at P 4 (2019) (Order).
- 2 Id. at P 6.
- 3 Id. at PP 47-49.
- 4 Old Dominion Elec. Coop. v. FERC, 892 F.3d 1223, 1230 (D.C. Cir. 2018) (“The filed rate doctrine and the rule against retroactive ratemaking leave the Commission no discretion to waive the operation of a filed rate or to retroactively change or adjust a rate for good cause or for any other equitable considerations.”); Seminole Elec. Coop., Inc. v. Fla. Light & Power, 139 FERC ¶ 61,254, at P 43 (2012) (finding that a billing limitation provision can also be part of the filed rate, limiting recovery for violations of the tariff), aff’d, Seminole Elec. Coop., Inc. v. FERC, 861 F.3d 230 (D.C. Cir. 2017).
- 5 See Order, 166 FERC ¶ 61,160 at P 53 (explaining that SPP could have addressed its inability to timely implement its tariff by seeking a delay of the relevant effective date).
- 6 See NYISO Market Administration and Control Area Services Tariff § 7.4; Order, 166 FERC ¶ 61,160 at P 53 n.151.
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