Docket No. ER22-1846-004
We concur in today’s rehearing order, which sustains the Commission’s decision to reject Southwest Power Pool, Inc’s (SPP) proposed revisions to its cost allocation methodology.
We are sympathetic to the Joint Parties’ concerns that the Commission’s decisions in this docket have caused parties to spend considerable resources over several years, without a solution to the deeper cost allocation challenges that prompted SPP’s filings in this proceeding.[1] In the absence of a satisfactory resolution to those underlying challenges in this case, Joint Parties have understandably asked the Commission to initiate a broader 206 investigation or hearing process. As discussed in the order, the Commission has declined to exercise its discretion for either procedural vehicle.[2]
However, we write today to suggest a different pathway. While the Joint Parties have raised compelling points that revisions to the Highway/Byway cost allocation approach may be appropriate under these circumstances,[3] in our view the best path forward to address this issue would be an open, collaborative process between the relevant parties and stakeholders. Such open dialogue would allow for fulsome exploration of any legal or administrative barriers to potential cost allocation approaches, without some of the rigidity of a contested proceeding.
We recognize that this dialogue will also take time, but given the thorny, challenging nature of these issues, such dialogue would be highly beneficial. The rehearing process afforded by the Federal Power Act is an opportunity for parties to seek a changed outcome, while preserving their arguments for appeal, and for the Commission to ensure that its decisions are legally sound. But it is not the ideal venue for the collaborative discussions that we envision would lead to durable policy solutions. Such dialogue may offer potential for a stakeholder-driven policy solution, or alternatively, provide essential insight and perspectives to guide the Commission’s evaluation under section 206 of the Federal Power Act, including establishing a future record for a cost allocation methodology consistent with the beneficiary pays principle. We encourage relevant parties and stakeholders to focus on such efforts.
For these reasons, we respectfully concur.
[1] Joint Parties’ Request for Rehearing at 6 (arguing that the ruling would “leave customers in certain geographic areas in SPP to fund the cost of transmission facilities for which those customers do not receive commensurate benefits” at a time when SPP is experiencing an energy transition that includes increased levels of wind generation); Letter from Senators Roger Marshall and Jerry Moran, Docket No. ER22-1846 (Sept. 6, 2023) (explaining that the Commission’s first rehearing order leaves in place a cost allocation methodology that, due to the rapid expansion of new wind generation resources, results in high costs for Kansans and the Sunflower Electric Power Corporation pricing zone); Letter from Congressman Ron Estes (Nov. 29, 2023) (addressing cost concerns on behalf of Kansan ratepayers).
[2] Order at P 43.
[3] See, e.g., Joint Parties’ Request for Rehearing at 21-31.