FERC Filings
MOTION TO INTERVENE AND PROTEST OF ELECTRIC POWER SUPPLY ASSOCIATION -Southwest Power Pool, Inc. - Docket No. RT01-34-000
D. The RTO’s Proposed Governance Structure is Unmanageable and Unfairly Weighted Towards Transmission Owners
SPP’s proposal is close to satisfying the Order No. 2000 independence requirements. However, further development of SPP’s governance structure is required to fully satisfy the Commission’s requirements. EPSA primarily is concerned with the composition of the Board and the potential for bias towards transmission owners and transmission customers with preexisting agreements. Under the SPP Board of Directors proposal, current transmission customers and transmission owners each appoint seven of the twenty-one Board members. The group encompassing transmission customers includes both old and new customers. The remaining one-third of the Board is comprised of “independent” members.
Generally, the interests of new transmission customers and current transmission customers would be closely aligned. However, in this case, because the transmission and interconnection agreements of many transmission customers have been grandfathered, they are not subject to the RTO tariff that they created. In other words, the interests of transmission customers who are actually taking service under the tariff will not be adequately represented in the ongoing governance of the SPP RTO, so long as the transmission arrangements of current transmission customers, including native load reservations, are grandfathered. Obviously, the commonality of interests shared by a substantial portion of board members in maintaining the status quo undermines the influence of “independent” board members and limits their ability to affect the Board decisions.
In addition, EPSA believes that a 21 member Board is simply unmanageable and as the Commission recently found, would be “ineffective.” A smaller board of seven to ten voting members, independently chosen, would provide a more workable framework for RTO governance. The Board could include additional non-voting members. The CEO of the RTO could be included as either a voting or non-voting member. Selection of the board members should be from a slate selected by an independent search firm. This approach is consistent with the Commission’s recent pronouncement in the California Order and the Commission should make it a requirement for approval of the SPP RTO.
If the Commission determines that the proposed 21 member Board structure is acceptable, the Commission must nevertheless require SPP to further define the voting rules applicable to the 21 member Board. In this regard, the SPP proposal needs additional specificity on what constitutes a quorum of the full Board, a quorum in each sector and that sector voting is limited to the number of members present in the smallest sector. In order to have an effective Board, these matter must be addressed before approval of the SPP RTO.
Finally, EPSA is troubled by the reference in Section 1.46 of the tariff to SPP as “agent.” An agency arrangement does not meet the independence requirement of Order No. 2000. The SPP RTO must be fully independent.<sup></sup> Order Proposing Remedies For California Wholesale Electric Markets, 93 FERC 61,121, mimeo at 31 (November 1, 2000)(the “California Order”).
See California Order at 32.
For example, if only four members are present in the Transmission Owners Section then only four members vote in the other sections.