The Southwest Power Pool, the grid controlling electricity in Oklahoma and more than a dozen other states has come out in agreement with Oklahoma Gas and Electric Company and 8 other utilities in asking federal regulators to remove a competitive bidding requirement for construction of distribution lines for major power grids.
In a filing with the Federal Energy Regulatory Commission, the SPP stood in agreement with the 9 utilities who filed a complaint this year about the required competitive bidding for projects in SPP and the Mid-Continent Independent System Operator grids. Their complaint focused on ROFR, Right of First Refusal, an issue that became controversial two years ago in the Oklahoma legislature. Major Oklahoma electric utilities, including OGE, supported Right of First Refusal (ROFR) legislation to grant incumbent utilities the exclusive right to build new, high-voltage transmission lines. These efforts, often pushed through bills like SB 1103 and HB 2747 to bypass competitive bidding, with supporters arguing it provides protection for consumers.
OG&E, covering much of Oklahoma and Empire District Company based in Joplin, Missouri, another utility that has thousands of customers in Oklahoma, were among 9 utilities asking FERC to suspend the required competitive bidding across the 18 states covered by the SPP and MISO. They filed a complaint Tuesday with the Federal Energy Regulatory Commission that seeks to temporarily eliminate the competitive solicitation provision in FERC’s landmark Order 1000, which broadly reformed electric transmission planning and cost allocation.
The SPP declared in its FERC filing, “While SPP was an early and frequent skeptic of the Commission’s original decision to require removal of ROFR provisions from Commission-jurisdictional tariffs and
agreements, and has suffered the extensive litigation, legislative churn, and uncertainty that
has resulted, SPP has developed a transparent and effective Transmission Owner Selection
Process for those regional transmission projects that the Commission’s current policy requires are subject to competition.”
SPP had originally offered a 90-day ROFR as a middle ground that it contended would promote the timely development of regional transmission but FERC chose to avoid the plan. So the SPP “pressed its views along with others all the way to the U.S. Court of Appeals for the District of Columbia Circuit.”
The SPP claims that since that time, some of its predictions proved true and “increased litigation has cast uncertainty over the status of transmission construction rights in some situations.” It further charged that some state legislatures across the grid have enacted a “patchwork of ROFR laws to counteract the Commission’s ROFR prohibition.” It also contends that legal challenges to the ROFR laws in state and federal courts have cast “further uncertainty on transmission construction rights over certain projects from time to time.”
“In short, what has resulted from the Commission’s ROFR elimination policy in SPP has been increased litigation and a patchwork of differing state ROFR policies,” wrote Tessie Kentner, Director and Associated General Counsel and Justin Hinton, Senior Attorney for the Southwest Power Pool.
The filing made it clear SPP will leave policy decisions to FERC but it still claimed that OGE and the other utilities were “correct that competitive solicitation adds a procedural requirement to the overall development timeline of transmission facilities subject to the solicitation.” The grid pointed to its own initiatives taken to “identify and develop transmission facilities quicker to meet load and generation needs and to provide shortterm solutions to bridge the gap.”
After OGE and the other utilities filed their complaint with FERC, it was countered by the Electricity Transmission Competition Coalition, a nationwide alliance of consumer advocates and manufacturers. They not only accused the utilities of being “tone deaf” to the affordability crisis, but argued, “Without competition, a monopoly incumbent utility has zero incentive to reduce costs because the more they spend the more their profits increase.”
The coalition claimed the utilities’ complaint was inconsistent with President Trump’s Ratepayer Protection Pledge, a pledge that consumers do not pay higher rates due to data center expansion and his Executive Order “Reducing Anti-Competitive Regulatory Barriers,” ETCC will urge the US Department of Justice to review the complaint,” stated the coalition in its filing with FERC.
The SPP further noted that several states within its footprint have enacted state right of first refusal laws and some have survived judicial review while others were struck down. Six states in the scope of the SPP have active right of first refusal laws and they include: Oklahoma, Minnesota, Nebraska, North Dakota, South Dakota and Montana.
Oklahoma has a partial ROFR in which incumbent utilities have a ROFR to build projects operating below 300kV while projects operating at 300kV and above are subject to competition. Other states in SPP’s footprint, including New Mexico, Kansas, Missouri, and Wyoming have considered but
ultimately not enacted legislation that would enshrine a state right of first refusal for
incumbent transmission owners.
