UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION. Southwest Power Pool, Inc. ) Docket No. ER

Transcription

1 UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION Southwest Power Pool, Inc. ) Docket No. ER ANSWER OF SOUTHWEST POWER POOL, INC. Pursuant to Rule 213 of the Federal Energy Regulatory Commission s ( Commission ) Rules of Practice and Procedure, 18 C.F.R , Southwest Power Pool, Inc. ( SPP ) files this answer 1 to Kansas Power Pool s ( KPP ) protest of SPP s response to a deficiency letter issued by the Commission in this proceeding. I. BACKGROUND On December 10, 2009, SPP filed an unexecuted revised Service Agreement for Network Integration Transmission Service ( NITSA ) between SPP and KPP ( KPP NITSA ). 2 Due to a dispute over the maximum firm import capability limitations set forth in Attachments B and C of the KPP NITSA, KPP protested the December 10 Filing. 3 On January 19, 2010, SPP answered the KPP December Protest SPP seeks leave to answer the protest filed in this case to assist the Commission s decision-making process and clarify the issues. The Commission regularly allows answers for such purposes. See, e.g., Sw. Power Pool, Inc., 114 FERC 61,289, at P 14, order on reh g, 116 FERC 61,289 (2006) (accepting answer that aided the Commission s decision-making); Sw. Power Pool, Inc., 113 FERC 61,014, at P 7 (2005) (same); Sw. Power Pool, Inc., 112 FERC 61,319, at P 56 (2005) (same). In addition, SPP filed an executed, revised Network Operating Agreement ( NOA ) between SPP as the Transmission Provider, KPP as the Network Customer, and Westar Energy, Inc. ( Westar ) as the Host Transmission Owner; and an executed, revised NOA among SPP as the Transmission Provider, KPP as the Network Customer, and Midwest Energy, Inc. ( Midwest ) as the Host Transmission Owner. This filing is known as the December 10 Filing. Protest of Kansas Power Pool, Docket No. ER (Dec. 30, 2009) ( KPP December Protest ).

2 On February 5, 2010, the Commission issued an order requesting more information from SPP about the KPP NITSA ( Deficiency Letter ). SPP responded to the Deficiency Letter on February 25, On March 18, 2010, KPP filed a protest to the Deficiency Response. 6 While SPP has addressed many of KPP s similar claims in prior pleadings, in particular in SPP s January Response and the Deficiency Response, to clarify the record, SPP addresses in this answer issues raised specifically in the KPP March Protest. II. CONTRARY TO KPP S CLAIM, SPP DID NOT VIOLATE THE SPP TARIFF IN CONDUCTING THE STUDIES FOR KPP S NETWORK SERVICE REQUEST. Contrary to KPP s claims, SPP acted in accordance with the SPP Tariff in studying KPP s network service request. Specifically, SPP studied KPP s network service request in the Aggregate Transmission Study Process ( ATSS ) pursuant to Attachment Z1 of the SPP Open Access Transmission Tariff ( SPP Tariff ). 7 As stated (... continued) 4 Answer of Southwest Power Pool, Inc., Docket No. ER (Jan. 19, 2010) ( SPP January Response ). On January 29, 2010, KPP answered the SPP January Response. Reply of Kansas Power Pool, Docket No. ER (Jan. 29, 2010) ( KPP Reply ) Southwest Power Pool, Inc. s Submission of Response to Request for Additional Information, Docket Nos. ER and -001 (Feb. 25, 2010) ( Deficiency Response ). Kansas Power Pool s Preliminary Protest Of Response To Deficiency Letter, Docket No. ER (Mar. 18, 2010) ( KPP March Protest ). Attachment Z1 of the SPP Tariff specifically provides that SPP will combine all long-term point-to-point and long-term designated network resource requests received during a specified period of time into a single Aggregate Transmission Service Study. (Emphasis added). 2

3 in prior SPP pleadings, pursuant to the SPP Tariff, 8 SPP studies requests for network service based on the Designated Resources and other information provided in a customer s application for network service ( NITS application ) and the customer s dispatch order. 9 SPP uses this information to determine what network upgrades will be required to serve a customer s load from its Designated Resources. KPP s NITS application contained information about the operation of behind-themeter ( BTM ) Designated Resources, BTM non-designated Resources, and non-btm Designated Resources, i.e., external resources. KPP s dispatch order provided that BTM resources would be on to meet the forecasted KPP load. 10 Based on this information, SPP, through the ATSS, determined the upgrades that would be required to provide network service from KPP s Designated Resources to its load. Simply put, SPP properly studied the transmission system and KPP s network service request in accordance with the SPP Tariff and identified the network upgrades required to enable KPP to serve its load on a firm basis based on: KPP s designated load, Designated Resources as specified in the NITS application and the dispatch order provided by KPP. However, given KPP s shortfall in Designated Resources, SPP also performed supplemental studies to determine the maximum firm import capability into certain cities. The supplemental studies were conducted specifically to accommodate KPP and to determine the amount of power KPP could import on a firm basis into certain local areas before and after the upgrades identified in the ATSS were constructed. Notably, as a See SPP Tariff See SPP January Response at 5. See id. 3

4 result of the supplemental studies, SPP determined that despite KPP s Designated Resource shortfall, the maximum firm import capability permitted by the limitations set forth in the KPP NITSA enables KPP to import 89% of the energy needed for certain cities. 11 KPP s assertion that SPP admitted it violated its tariff because it did not identify the upgrades that would alleviate the purported local area constraints in the supplemental studies 12 is off the mark. Unlike the transmission owner in Sierra Pacific Power Co., 81 FERC 61,136 (1997), 13 on which KPP relies, SPP followed all of the SPP Tariff study procedures in evaluating KPP s request for network service and determined the upgrades that would be required to provide KPP firm network service based on its request. As explained above and in the SPP January Response, SPP determined the upgrades that are required to accommodate KPP s request for network service based on the information in its NITS application, including KPP s dispatch order and its submission of insufficient Designated Resources to serve its load. As the Commission has stated, the transmission provider s obligation to plan its system to serve network customers loads is of course dependent on the network customer designating adequate network resources as well as providing information regarding its forecasted See December 10 Filing at 6-7. KPP March Protest at 2. As KPP notes, the transmission owner in Sierra Pacific Power Co followed some, but not all of [the tariff study] procedures. KPP Protest at 3 (quoting Sierra Pacific Power Co., 81 FERC 61,136, at 61,638 (1997)). 4

5 loads and resources. 14 The supplemental studies were not required by the SPP Tariff but were extra studies conducted for KPP s benefit to determine the level of firm service that would be available to KPP despite its Designated Resource shortfall. That SPP did not identify in the supplemental studies any network upgrades to relieve the purported local area constraints does not demonstrate a clear violation of the tariff and Commission requirements, as KPP suggests. KPP did not identify in its application sufficient Designated Resources or a dispatch order that would require the study of such upgrades. III. CONTRARY TO KPP S ASSERTIONS, THE NEED FOR THE FIRM IMPORT CAPABILITY LIMITATIONS IS DIRECTLY RELATED TO KPP S DESIGNATED RESOURCE SHORTFALL. Despite KPP s repeated claims otherwise, 15 there is a connection between KPP s Designated Resource shortfall and the maximum firm import capability limitations, as detailed in prior pleadings. 16 Based on the KPP NITS application and the dispatch of generation specified in the dispatch order, SPP studied the transmission system and determined network upgrades that would be necessary for KPP to serve its load. In Order No. 890-B, the Commission indicated that situations in which a particular designated load cannot be served are best addressed on a case-by-case basis. 17 In this case, SPP See Preventing Undue Discrimination and Preference in Transmission Service, Order No. 890, FERC Stats. & Regs., Regs. Preambles 31,241, order on reh g, Order No. 890-A, FERC Stats. & Regs., Regs. Preambles 31,261 (2007), order on reh g and clarification, Order No. 890-B, 123 FERC 61,299, at P 219 (2008) ( Order No. 890-B ), order on reh g and clarification, Order No. 890-C, 126 FERC 61,228, order on clarification, Order No. 890-D, 129 FERC 61,126 (2009) (emphasis added). SPP January Response at 4. KPP March Protest at 4. See SPP January Response at 3-5. See Order No. 890-B at P

6 addressed KPP s Designated Resources shortfall by providing maximum firm import capability limitations that assured KPP a level of firm service into certain KPP cities. These maximum firm import capability limitations provided KPP the flexibility to serve the bulk of a city s load from non-btm resources (even though KPP indicated the BTM resources would be dispatched). 18 Furthermore, KPP is mistaken that notwithstanding the fact that KPP has identified DNRs in excess of its network load in a new pending network service request, SPP should not continue to conclude that maximum firm import capability limitations may still be necessary. 19 As indicated in the Deficiency Response, while KPP has sufficient Designated Resources to serve projected load in the year 2014, KPP s load is anticipated to grow at a rate such that the load will exceed its Designated Resources by the year Therefore, based on current data, maximum firm import capability limitations still may be required due to a Designated Resource shortfall in later years of service. The bottom line is that if KPP designated sufficient Designated Resources to serve its load, the maximum firm import capability limitations would be unnecessary. Therefore, despite KPP s repeated insistence to the contrary, there is a connection between KPP s failure to designate sufficient Designated Resources and the maximum firm import capability limitations See discussion at page 3 supra. See KPP March Protest at 4. See Deficiency Response at 31. In 2019, KPP s total summer network load is expected be 457 MW and the total Designated Resources will be 421 MW. 6

7 IV. SPP USED CORRECT ASSUMPTIONS IN ITS STUDY MODELS. KPP incorrectly asserts that SPP used faulty assumptions in the ATSS and supplemental studies. First, KPP wrongly concludes that SPP incorrectly modeled KPP s firm use of hypothetical DNRs that KPP has not actually designated, rather than simply assuming that KPP will be relegated to non-firm secondary service for such use of non-dnrs. 21 SPP did not assume firm service from non-designated Resources. 22 SPP uses non-designated BTM generation, among other sources of power, to solve the power flow models when there is a Designated Resource shortfall, as is the case here. 23 In the power flow models, load must be served when there is a Designated Resource shortfall, and therefore, to serve load in these situations, SPP uses non-designated Resources in the model. SPP however, does not treat these non-designated Resources as firm use. In other words, SPP does not plan the transmission system to assure firm transmission service to transmit power from non-designated Resources, as it does for Designated Resources. 24 SPP merely uses the non-designated Resources to solve the power flow KPP March Protest at 4-5. Id. at 5. ( SPP s response to this inquiry can make sense only if, in its studies, SPP filed in any KPP DNR shortfalls with assumed firm use by KPP of non- DNRs. ). See Deficiency Response at 1-2. Further contrary to KPP s assertion, SPP s studies do not identify upgrades that are required to accommodate non-firm service. KPP March Protest at 5. SPP s statement in the Deficiency Response, that the shortfall can result in the identification of network upgrades in the ATSS merely refers to the fact that had a network customer designated sufficient Designated Resources such that the shortfall process was unnecessary, the results of the ATSS study may have been different and thus different upgrades may have been identified for which transmission customers in the ATSS would have cost responsibility. In either (continued... ) 7

8 models to determine how the load will be served in light of the Designated Resource shortfall and based on the customer s dispatch order. Similarly, KPP s assertion that SPP erred by modeling some or all of KPP s network loads as being net of BTM DNRs is faulty. 25 As KPP suggests is appropriate, SPP models generation and load separately. 26 However, when there is a Designated Resource shortfall and the customer includes BTM generators in its dispatch order, as in KPP s case, SPP will model the BTM generation that is specified as running in the dispatch order as serving the load that is BTM. 27 Had KPP not indicated in its dispatch order that it would be dispatching its BTM resources, SPP would have modeled KPP s load the same, but the generation inputs would have been different, potentially leading to different results. (... continued) scenario, however, SPP does not identify upgrades to accommodate non-firm service KPP March Protest at 8. Id. KPP s suggestion that SPP s model method is factually faulty because even the most reliable BTM generators will not be available 24 hours a day, 365 days a year, lacks credibility, as SPP based its studies on KPP s dispatch order and its NITS application. 8

9 V. CONTRARY TO KPP S ASSERTIONS, SPP DID NOT PERMIT WESTAR TO UNDULY INFLUENCE THE PROCESSING OF NETWORK SERVICE REQUESTS, NOR WAS WESTAR ALLOWED TO JUMP THE QUEUE. Contrary to KPP s assertions otherwise, 28 SPP has acted, and continues to act, independently from the transmission owners within the SPP footprint. First, SPP appropriately initially obtained maximum firm import capability limitations for certain cities from Westar because each of these cities is interconnected to three different local 34.5 kv transmission systems. 29 SPP evaluated the transmission system modeled at 69 kv and above. Thus, SPP was not in a position to evaluate the limitations of the 34.5 kv system. Notably, SPP ultimately increased the maximum firm import capability limitations by way of the SPP supplemental studies, thus benefiting KPP. Second, SPP acted in accordance with the SPP Tariff by including Westar s additional delivery point in the 2007-AG1 ATSS process as an update. After the AG1-AFS-11, Westar notified SPP that a new 14-mile radial 138 kv line was being constructed to fulfill Westar s contractual obligation to serve a new delivery point. 30 The new radial line and delivery point resulted in the elimination of several upgrades from the 2007-AG1-AFS-11, and the addition of new upgrades in the 2007-AG1-AFS-12, 31 resulting in a more cost effective solution. Pursuant to Attachment Z1 of the SPP Tariff and SPP policy at the time, new delivery points were not studied as part of the ATSS See KPP March Protest at 8-9. Deficiency Response at 9. See Deficiency Response at 17. See Deficiency Response at

10 unless new Designated Resources were required. Specifically, Attachment Z1 of the SPP Tariff merely requires the ATSS to include all long-term point-to-point and long-term designated network resource requests received during a specified period of time into a single Aggregate Transmission Service Study. 32 In Westar s case, no new Designated Resource request was made (or required), and therefore, the delivery point update did not need to be included in the ATSS. Thus, SPP did not allow Westar to jump the queue as KPP says, but SPP simply followed the SPP Tariff and SPP policy. Finally, KPP argues that the key distinguishing fact between the other network customers that had a Designated Resource shortfall and KPP is that the transmission owners in the other situations did not insist on any maximum firm import capability limitations. This ignores the most important distinguishing factor the existing transmission system was robust enough to accommodate the requested service of the others. 33 For example, maximum firm import limitations were not required for Kansas Municipal Energy Agency s ( KMEA ) network load in the Kansas City Power and Light ( KCP&L) transmission zone because the transmission system already had been planned in such a manner based on existing service commitments that the transmission system as planned could accommodate more imports into the KMEA cities than were necessary to serve its load. 34 Similarly, with regard to the KMEA network load in the MKEC transmission zone, KMEA s request was to continue essentially the same level of historical service it had taken under its contracts with the host transmission owner and did See SPP Tariff at Attachment Z1 (emphasis added). See Deficiency Response at 28. Id. at

11 not request any new Designated Resources. As a result, there were no reliability impacts on SPP s system and no need for maximum firm import capability limitations. 35 In contrast, KPP requests new network service and designates new Designated Resources that are insufficient to serve its load, which, as explained in the Deficiency Response and other prior SPP pleadings, will have an impact on the transmission system warranting the maximum firm import capability limitations Id. at Id. 11

12 V. CONCLUSION. For the reasons stated in this answer and for the reasons stated in prior pleadings, the Commission should accept the KPP NITSA without modification based on the written record and should not set this matter for hearing. Respectfully submitted, /s/ Tyler R. Brown Barry S. Spector Carrie L. Bumgarner Tyler R. Brown Wright & Talisman, P.C G Street, N.W., Suite 600 Washington, D.C (202) spector@wrightlaw.com bumgarner@wrightlaw.com brown@wrightlaw.com K:\SPP\KPP -- ER \Answer to KPP Protest - FINAL.doc Counsel for Southwest Power Pool, Inc. 12

13 CERTIFICATE OF SERVICE I hereby certify that I have this day served the foregoing document upon each person designated on the official service list compiled by the Secretary in this proceeding. Dated at Washington, D.C., this 2nd day of April, /s/ Tyler R. Brown Attorney for Southwest Power Pool, Inc.