Notingthat eight years have passed since the approval of 's plan tolet entities recover directly assigned costs of upgrades that are subsequentlyused to provide transmission service, FERC granted the grid operator's request for waivers thatwould allow it to resettle invoices dating back to 2008.
"Upgradesponsors who have been negatively affected by SPP's delay will finally, throughthis order, get the appropriate relief," FERC said.
FERCin 2008 signed offon changes to SPP's tariff specifying that a sponsored upgrade can become a "creditable"upgrade if the grid operator determines that it is needed as part of thetransmission system and that the directly assignable costs for those upgradescan be recovered from customers taking new transmission service that could nothave been provided but for the upgrades.
ButSPP explained in its April 1 waiver requestthat it never fully implemented those changes because of the "substantialcomplexity" involved in calculating revenue credits, which required thedevelopment of specialized software capable of processing voluminous amounts ofdata. That software is almost ready for implementation, and SPP expects tobegin invoicing credit charges and payments prospectively sometime in thefourth quarter of 2016, according to that filing.
Regardingthe so-called historical period, however, SPP said it intends to calculate thecredit payment obligations back to 2008 if FERC agrees to waive certain tariffrequirements, including one that limits billing adjustments to one year after afinal invoice is issued. "Once SPP calculates the historical creditinformation, SPP will invoice transmission customers for previously uncollectedcredit payment obligations and SPP will have to 'claw back' revenues previouslydistributed to transmission owners that should have been paid to upgradesponsors," the grid operator said.
FERCagreed that the resettlement is necessary, even though it is "expected toinvolve a significant amount of money," since applying the revenuecrediting process only prospectively "would deprive upgrade sponsors ofcompensation to which they are entitled and anticipated receiving since 2008under the tariff, consistent with the filed rate."
Thegrid operator has made a good faith effort to implement the revenue-creditingprocess and has kept interested parties apprised about the status of thateffort along the way, FERC said. Moreover, the agency noted that stakeholdershave had adequate notice of possible cost impacts as SPP has made it clearsince the beginning that it intended to implement the crediting process for thehistorical period.
"Weagree that the waiver will permit SPP to provide credits to all upgradesponsors on a consistent basis, and denial of its waiver request would causeharm to upgrade sponsors, who funded projects with the expectation of receivingcredit payments if the upgrades were subsequently used for transmissionservice," FERC said. "We find that granting the waiver request wouldnot harm third parties because the compensation that these upgrade sponsors areentitled to would come from transmission customers who have benefited fromupgrades paid for by upgrade sponsors."
Asfor SPP's request that it not be required to recalculate previous revenueadjustments made in accordance with its "balanced portfolio" process,FERC accepted the grid operator's assurance that any impact of thosereallocations would be minimal because they "would be applied to the samezones, and in the same magnitude for each zone." (ER16-1341)