In an Order on Rehearing in Docket No. EL22-34, FERC continued to find that the Ohio Office of Consumer Council (OCC) demonstrated that the Ohio Power and AEP Ohio Transmission (AEP) rates were unjust and unreasonable since FERC specifically granted them an RTO Adder under section 219, and their continued participation in a Transmission Organization is not voluntary and the RTO Adder should be removed from their rates. By contrast, OCC did not meet its burden to show that Duke and ATSI rates charged to Ohio customers were unjust and unreasonable as FERC had not specifically granted them an RTO Adder under section 219 and their rates, inclusive of any RTO Adder, were instead parts of comprehensive settlements. While OCC is correct that an applicant may make a section 205 filing in order to recover an RTO Adder in its rates, it does not follow that the Commission, in approving comprehensive settlement packages, specifically authorized RTO Adders in the section 205 proceedings that resulted in ATSI and Duke’s rates. Rather, in ATSI’s and Duke’s proceedings, even if the statements in the settlements indicated that the parties agreed to include an RTO Adder, FERC only approved comprehensive settlement packages without specifically approving the RTO Adder under section 219. FERC does not know the precise trade-offs and concessions made by the parties to those proceedings. Even if the settlements included an amount reflecting an RTO Adder, that does not explain how that RTO Adder came to be included in the settlement agreements and what trade-offs led to that outcome. It is FERC’s position not to revisit individual elements in a settlement unless it is shown that they make the overall rate unjust and unreasonable.
FERC found in the Rehearing Order that it had not err, as stated by AEP, by declining to address preemption arguments and whether the voluntariness requirement is consistent with the plain text of section 219. FERC previously addressed those issues in the RTO Adder Order and in the Dayton Orders.
In summary, FERC has eliminated the RTO Adder for Dayton Power and Light, Duke and ATSI for their Ohio transmission services.
Commissioner Danly continues to dissent as the Federal Power Act does not limit incentives to those utilities that voluntarily join a transmission organization, though he did concur with the decision not to reduce the rates of ATSI and Duke.
Dr. Paul Dumais
CEO of Dumais Consulting with expertise in FERC regulatory matters, including transmission formula rates, reactive power and more.