![]() While SPP’s “Regional State Committee” has advisory input on the Reserve Margin, FERC acknowledged this was a federal issue and did not base its decision on any role the states may play.īefore addressing the merits of the complaint, FERC held – in what appears to be a first of its kind holding – that a complaint that a key rate or term of service has been omitted from a tariff may not be actionable under FPA section 206. FERC reasoned that the tariff already contains a sufficient level of detail on the process for conducting a study that serves as an input to a Reserve Margin determination. FERC’s decision conceded that the Reserve Margin has a direct impact on wholesale rates, but nonetheless refused to order that the 15% value be included in the SPP Tariff. A recent decision by SPP to increase the Reserve Margin highlighted the consequences of its absence from the SPP tariff and compelled the complaining utilities to ask FERC to directly oversee both the level of the Reserve Margin and the schedule for any changes to it. Under FPA section 205, the filed rate doctrine, and the Commission’s “Rule of Reason,” a rate, term, or condition of wholesale service that significantly impacts wholesale rates “must” be stated in the tariff of the applicable utility (here, SPP). FERC further held that a complaint alleging that a key rate is missing from a tariff in violation of section 205 of the Federal Power Act and the Commission’s Rule of Reason fails to state a claim upon which relief could be granted. As a result of the decision, SPP is free to change the Reserve Margin without any oversight by FERC or approval by a single state commission. The utilities’ request for additional FERC oversight was opposed only by SPP itself. ![]() The complaining utilities argued that customers in SPP could be harmed by the costs associated with the rapid increase in the Reserve Margin with little corresponding reliability benefit and asked FERC to keep closer tabs on the process. The Reserve Margin dictates exactly how much electric generating capacity load-serving utilities must own or have under contract to serve customers. On May 3, 2023, a divided FERC voted 3-1 to deny a widely-supported complaint by multiple utilities in the Southwest Power Pool (“SPP”) region arguing that the absence of the new 15% generation Planning Reserve Margin (“Reserve Margin”) from the SPP tariff rendered that tariff unjust and unreasonable. ![]()
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