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3597 Chilocco Wind Farm GIA ER19-2813

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3597 Chilocco Wind Farm GIA ER19-2813 UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION ) Southwest Power Pool, Inc. ) Docket No. ER19-2813-000 ) ANSWER OF SOUTHWEST POWER POOL, INC. Pursuant to Rules 212 and 213 of the Federal Energy Regulatory Commission’s (“Commission”) Rules of Practice and Procedure, 18 C.F.R. §§ 385.212 and 385.213, Southwest Power Pool, Inc. (“SPP”) submits this Motion for Leave to Answer and Answer to the protest filed in this proceeding. I. BACKGROUND On September 16, 2019, SPP submitted an unexecuted Generator Interconnection Agreement (“GIA”) among SPP as Transmission Provider, Chilocco Wind Farm, LLC (“Chilocco”) as Interconnection Customer, and Oklahoma Gas and Electric Company as Transmission Owner (“Chilocco GIA”) to the Commission at the request of Chilocco.1 On October 4, 2019, Chilocco filed a protest of the September 16 Filing protesting the inclusion of the Wolf Creek to Emporia 345 kV transmission line (“Wolf Creek-Emporia Upgrade”) in the Chilocco GIA.2 To ensure a full and accurate record, SPP submits this Answer to respond to the Protest and aid the Commission’s decision-making. 1 Submission of Generator Interconnection Agreement of Southwest Power Pool, Inc., Docket No. ER19-2813-000 (September 16, 2019) (“September 16 Filing”). 2 Protest of Chilocco Wind Farm, LLC, Docket No. ER19-2813-000 (October 4, 2019) (“Protest”). II. MOTION FOR LEAVE TO ANSWER SPP respectfully requests leave to respond to the Protest filed in this proceeding to aid the Commission’s decision making process. The Commission permits answers for good cause shown, and the Commission has held that answers are permitted when they ensure a more accurate and complete record, clarify the issues, or provide useful and relevant information that will assist the Commission in its deliberate process.3 Therefore, SPP respectfully requests that Rule 213(a)(2)4 be waived and that the Commission accept this Answer for good cause shown. III. ANSWER A. Background In SPP’s Generator Interconnection (“GI”) study process,5 SPP evaluates interconnection requests in a cluster study process in which groups of requests are studied together and upgrade costs are allocated to the participants in the study that have an impact above a defined threshold on a limiting constraint. At the completion of the study, participants evaluate the results and determine whether to proceed to the next phase of study or to withdraw. When requests are withdrawn, either in the cluster being studied or previously studied clusters, previous results are often rendered invalid and a restudy is 3 See, e.g., Southwest Power Pool, Inc., 131 FERC ¶ 61,252, at P 19 (2010) (accepting answers that “provided information that assisted us in our decision-making process”); Southwest Power Pool, Inc., 144 FERC ¶ 61,223, at P 40 (2013); Duke Energy Kentucky, Inc., 122 FERC ¶ 61,182, at P 25 (2008); City of Vernon, Cal., 115 FERC ¶ 61,374, at P 31 (2006); PJM Interconnection, L.L.C., 117 FERC ¶ 61,168, at P 29 (2006). 4 18 C.F.R § 385.213(a)(2). 5 The SPP Generator Interconnection study process is performed in accordance with the Generator Interconnection Procedures (“GIP”) in Attachment V of the SPP Open Access Transmission Tariff, Sixth Revised Volume No. 1 (“SPP Tariff”). 2 normally initiated to arrive at new results and cost allocations. This iterative process proceeds until there are no further withdrawals or SPP determines that withdrawals will not have a substantial effect on the remaining participants. This process often results in changes to the scope of upgrades and costs allocated to a particular group of requests as customers withdraw. Costs can both increase and decrease for individual requests. It is not unusual for costs to decrease in one restudy only to increase in a subsequent one. This is the nature of the cluster study process. SPP performs the system impact study (known as “DISIS” in SPP’s GIP) to determine which upgrades are needed to provide the collective service requested in the cluster, based on the best information available to SPP at the time the study is conducted. SPP relies on the Transmission Owners to supplement the limited information available to SPP about the constraints identified in the study process. It is not unusual for the Transmission Owner to discover that upgrades may be more or less involved than initially thought based on refinement of the scope and initial engineering work. The study results often change as more information becomes available. This is one of the reasons for the two-step process in the Commission pro-forma Large Generator Interconnection Procedures. The system impact study identifies the constraints and the potential upgrades which are then refined based upon input from Transmission Owners during the facilities study process. B. The Wolf Creek-Emporia Upgrade is the least cost solution for the issues identified in the most recent DISIS-2016-001 study. The Chilocco request was entered into the DISIS-2016-001 cluster study. The initial study determined that to provide the service requested by Chilocco and other requested service in the cluster, over $200 million in new upgrades plus an additional $161 3 million worth of previously-approved upgrades would be required.6 The study report indicated that approximately $38 million of this cost would be assigned to Chilocco.7 Among the upgrade costs assigned to Chilocco and other customers were those required to rebuild a portion of the Lacygne-Waverly 345 kV line, estimated at $31.6 million, of which Chilocco was allocated 6.4%. Based on the information in the study report, Chilocco knew or should have known that the potential existed for its ultimate costs to exceed the $38 million allocated to it. For example, as requests withdraw and results are further refined, remaining upgrade costs can shift to remaining customers such as Chilocco. Chilocco elected to proceed to the Facilities Study with this knowledge. A subsequent restudy of this cluster was conducted in which the Lacygne-Waverly constraint was again observed but SPP determined, based on the best information it had at the time, that the constraint was the result of inadequate terminal equipment and so costs of an upgrade of the terminal equipment were assigned, instead of the more-expensive rebuild identified in the initial study. At this point, Chilocco had neither a completed Facilities Study report nor a GIA. During the fourth restudy of DISIS-2016-001, SPP and Westar Energy, Inc. (“Westar”), now known as Evergy Kansas Central, Inc., as the affected Transmission Owner, determined that the Lacygne-Waverly constraint was due not only to terminal equipment but to the limited rating of the line conductor itself. This required a rebuild of a portion of the line as was identified in the initial study. During the Facilities Study, Westar 6 DISIS-2016-001 report, Appendix E, p. E-79-80. http://opsportal.spp.org/documents/studies/files/2016_Generation_Studies/DISIS %202016-001%20v3_FINAL.pdf 7 Id. 4 determined that rebuilding the line would be more involved than initially thought. The estimate of costs provided by Westar increased the rebuild cost to $79.3 million. Because of this dramatic increase, SPP began to search for alternatives. The best alternative determined for the fourth restudy was a new 345 kV transmission line from Wolf Creek to Emporia (“Wolf Creek-Emporia Upgrade”). The alternative was determined to resolve the constraint and was able to do so at a cost estimated to be 20% less than the rebuild of the Lacygne-Waverly line. SPP also considered a new 345 kV line from Wolf Creek to Neosho, but rejected that option because it was more expensive than the other alternative. The GIP requires SPP to tender a draft GIA to the Interconnection Customer and applicable Transmission Owner once the final Facility Study report is provided to the Interconnection Customer, at which time a 60-day negotiation period commences.8 Therefore, the study process demanded a resolution be identified within the timeframe specified in the GIP. Accordingly, SPP included the Wolf Creek-Emporia Upgrade in the Chilocco GIA because it was the least-cost solution that would fully solve the constraint. C. The report for the Interconnection Facilities Study for the Chilocco report provides the level of detail required by the SPP GIP. In the Protest, Chilocco states that the Wolf Creek-Emporia Upgrade “has not been fully studied in terms of design, engineering and scheduling, and appears to have substantial risk regarding the ability to complete the project within the estimated 43-month lead time and at the cost estimate provided.”9 The Wolf Creek-Emporia Upgrade has been 8 See SPP Tariff at Attachment V, Section 11.1. 9 Protest at 4. 5 fully studied as required by the SPP GIP applicable to the Chilocco request, which states10 that the Interconnection Facilities Study shall specify and estimate the cost of the equipment, engineering, procurement and construction work needed to implement the conclusions of the Definitive Interconnection System Impact Study. The GIP also states that the Interconnection Facilities Study shall identify the nature and estimated cost of any Transmission Owner’s Interconnection Facilities and Network Upgrades necessary to accomplish the interconnection; and an estimate of the time required to complete the construction and installation of such facilities.11 The Interconnection Facilities Study report for the Chilocco request12 provides all of the information required by the SPP GIP. In addition, a conference call was held between Chilocco, SPP and Westar to discuss the upgrade in more detail. During the call, Westar explained the many activities required in order to complete construction and that those activities would commence after the execution of the necessary agreements. The fact that those activities have not yet commenced does not indicate that either SPP or Westar have not “fully studied” the upgrade.
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