CORPORATE GOVERNANCE COMMITTEE
ZOOM Meeting | August 20, 2020 - 8:00 a.m. - 5:00 p.m.
• A G E N D A •
1. Call to Order and Administrative Items ......................................................................................................... Barbara Sugg
a. Minutes (6/16/20)
b. Action Items review
2. Alternative Power/Public Interest Members Committee Vacancy.......................................................Barbara Sugg
a. Steve Gaw – Advanced Energy Alliance
3. Docket ER18-939 Non-jurisdiction Refund Docket ......................................................................................... Mike Riley
4. FERC’s approval of Compliance filing in the AWEA/WC Complaint Docket ER19-2522 ................... Mike Riley
5. Annual Survey and Assessment Schedule ........................................................................................................ Paul Suskie
a. Review of Board Effectiveness Survey Questions
b. Survey Schedule
6. Review of CGC 2020 Annual Assessment ...................................................................................................... Barbara Sugg
7. Review of CGC Scope ............................................................................................................................................. Barbara Sugg
8. Board Meeting and Committee Schedule ..................................................................................................... Barbara Sugg
9. Future meetings
First week of September 2, 2020 2:00pm-5:00pm CT - Virtual
November 12, 2020 - Virtual
10. Adjournment
Executive Session immediately following the business meeting
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Nomination Form Members Committee
Alternative Power / Public Interest Nominee Name & Title:
Steve Gaw
Company:
Advanced Power Alliance
Type of Experience & Responsibilities with Company:
Senior Vice President- Infrastructure and Markets
Nominee’s Phone Number & Email Address:
573-645-0777 [email protected]
Nominated by:
Chase Smith- Southern Power
Affiliate(s):
None
Page 2 of 58
Sector Representative Company Term Expires
IOU Bleau LaFave NorthWestern Energy 2022
IOU Peggy Simmons Public Service Co. Oklahoma 2022
IOU David Hudson SPS/Xcel Energy 2020
IOU Greg McAuley Oklahoma Gas & Electric Company 2020
IOU Tim Wilson Liberty Utilities 2021
IOU Kevin Noblet Evergy Companies 2021
Sector Representative Company Term Expires
Cooperative Stuart Lowry Sunflower 2022
Cooperative Tom Christensen Basin Electric 2022
Cooperative Joel Bladow Tri-State Generation & Transmission 2020
Cooperative Zac Perkins Tri-County Electric Cooperative 2021
Cooperative Mike Wise Golden Spread 2021
Sector Representative Company Term Expires
Municipal Chris Jones City Utilities Springfield 2022
Municipal Dave Osburn Oklahoma Municipal Power Authority 2020
Sector Representative Company Term Expires
IPP/Marketers Rob Janssen Dogwood 2022
IPP/Marketers Holly Carias NextEra Energy 2020
IPP/Marketers Kevin Smith Tenaska 2021
Members Committee (24 Members)
Vacancies (In Red)
Investor Owned Utility Sector (6 Seats)
Cooperative Sector (5 Seats)
Municipal Sector (2 Seats)
Independent Power Producer/Marketers Sector (3 Seats)
State Agencies Sector (2 Seats)
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Sector Representative Company Term Expires
State Agencies Joe Lang Omaha Public Power District 2020
State Agencies Tom Kent Nebraska Public Power District 2021
Sector Representative Company Term Expires
FPMA Jody Sundsted WAPA 2021
Sector Representative Company Term Expires
Transco Brett Leopold ITC Great Plains 2022
Sector Representative Company Term Expires
Industrial Jeff Riles Google 2020
Sector Representative Company Term Expires
Alternative/ PI VACANT 2021
Alternative/ PI VACANT 2020
Sector Representative Company Term Expires
Retail VACANT 2022
Small Retail Customer Sector (1 Seat)
Federal Power Marketing Agency Sector (1 Seat)
Large Retail Customer Sector (1 Seat)
Independent Transmission Company Sector (1 Seat)
Public Interest/Alternative Power Sector (2 Seats)
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SouthwestPowerPool SPPorg southwest-power-poolHelping our members work together to
keep the lights on... today and in the future.
FERC PROCEEDING: NON-JURISDICTIONAL REFUND OBLIGATIONEL16-91
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2
EL16-91: NON-JURISDICTIONAL REFUND OBLIGATION
• Background
• Recent Developments
• Current Status
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3
EL16-91: BACKGROUND
• July 21, 2016: FERC-initiated examination of the SPP Tariff under Section 206 of the Federal Power Act
ISSUE IDENTIFIED BY FERC:
• There is no refund commitment in the SPP Tariff requiring non-jurisdictional transmission owners to refund revenues received associated with service provided due to their status as RTO transmission owners
• This may result in in SPP’s jurisdictional rates not being just and reasonable
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4
EL16-91: BACKGROUND
CGC Direction:
• February 2017: Coordinate with all SPP Transmission Owners on drafting a straw proposal to comply with FERC’s direction and bring proposal back to CGC.
• November 2017: Work with non-jurisdictional Kansas and Nebraska Members and all Transmission Owners to formulate a compliant proposal that is responsive to Kansas and Nebraska specific issues
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5
OCTOBER 2017 ORDER
• FERC ordered SPP to submit a compliance filing with a proposal to address NJ refund commitment by February 28, 2018, regardless of the outcome of Stakeholder process, or show cause as to why revisions are unnecessary
• FERC was expected to issue a final order on April 30, 2018
• Rehearing Requests of October 2017 Order filed by NPPD; APPA; NRECA; and Midwest
5
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6
SPP’S COMPLIANCE FILING
• Stakeholder process produced two proposals
for the CGC’s consideration
• Staff Proposal
• NPPD Proposal
• WAPA Amendment
• January 5, 2018 – CGC voted unanimously to
approve the proposed Membership
Agreement addition drafted by NPPD, and
approved the WAPA-specific amendment
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7
SPP’S COMPLIANCE FILING
• February 28, 2018: SPP submitted its
compliance filing
• Supportive comments filed by: NPPD;
Sunflower; Midwest; OPPD; WAPA
• Protest comments filed by: KCP&L; Indicated
SPP Transmission Owners = AEP; Empire;
OG&E; Xcel SPS; Westar
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8
RECENT DEVELOPMENTS:MAY 21, 2020 ORDER & FINDINGS
• FERC granted rehearing of the October 2017 Order
• Found that it is neither necessary nor appropriate to impose the refund commitment contemplated there on non-public utility transmission owning members in SPP.
• FERC found that the lack of a general refund commitment by nonpublic utilities similar to that applicable to non-jurisdictional entities pursuant to FPA sections 205 and 206 does not render SPP’s rates unjust and unreasonable or unduly discriminatory or preferential.
• FERC terminated the FPA section 206 proceedings instituted in the July 2016 Order in Docket No. EL16-91 and the October 2017 Order in Docket No. EL18-19; FERC dismissed SPP’s Compliance Filing in Docket No. ER18-939 as moot, and terminated that proceeding.
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9
MAY 21, 2020 ORDER: IMPACTS?
• SPP’s governing documents remain as they
were prior to the initiation of this proceeding.
• There is no refund commitment in the SPP
governing documents requiring non-
jurisdictional transmission owners to refund
revenues received associated with service
provided due to their status as RTO
transmission owners.
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10
MAY 21, 2020 ORDER: IMPACTS?
• Instances where refund commitments have
come up
• SPP’s receipt of and distribution of MISO
funds pursuant to FERC settlement
agreement
• Attachment Z2 payments
• Others?
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11
MAY 21, 2020 ORDER: IMPACTS?
• Recommendation:
• Staff will propose a process to CGC, to be
used for reviewing the current status of
refund obligations in SPP’s governing
documents, including a straw proposal if
applicable
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12
QUESTIONS?
Page 16 of 58
171 FERC ¶ 61,142
UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
Before Commissioners: Neil Chatterjee, Chairman;
Richard Glick, Bernard L. McNamee,
and James P. Danly.
Southwest Power Pool, Inc.
Southwest Power Pool, Inc.
Docket Nos. EL16-91-001
EL18-19-001
(consolidated)
ER18-939-000
ORDER GRANTING REHEARING AND DISMISSING COMPLIANCE FILING
(Issued May 21, 2020)
1. On July 21, 2016, pursuant to section 206 of the Federal Power Act (FPA),1 the
Commission instituted a proceeding in Docket No. EL16-91-0002 to examine whether
the Southwest Power Pool, Inc. (SPP) Open Access Transmission Tariff (Tariff) may
be unjust, unreasonable, and unduly discriminatory or preferential because it does not
include a refund commitment by non-public utility transmission owning members whose
revenue requirements are recovered under the SPP Tariff, and established paper hearing
procedures.3
2. In an order issued on October 19, 2017, the Commission: (1) held the FPA section
206 paper hearing in abeyance pending the ongoing SPP stakeholder process; (2) granted,
in part, and denied, in part, SPP’s requests for clarification; (3) addressed some issues
1 16 U.S.C. § 824e (2018).
2 Sw. Power Pool, Inc., 156 FERC ¶ 61,059 (2016) (July 2016 Order).
3 Id. PP 1, 9-10. See 16 U.S.C. § 824(f). For ease of reference, while such utilities
are subject to the Commission’s authority in certain respects, but not in other respects,
compare 16 U.S.C. §§ 825u, 825v (2018) with 16 U.S.C. § 824c, we nevertheless refer
to FPA section 201(f) entities herein as non-jurisdictional entities, non-jurisdictional
utilities, or non-public utilities.
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Docket No. EL16-91-001, et al. - 2 -
raised by parties; (4) directed a compliance filing; (5) instituted a proceeding in Docket
No. EL18-19-000 pursuant to FPA section 206 to examine the SPP Membership
Agreement (Membership Agreement) and other jurisdictional documents; and (6)
consolidated Docket Nos. EL16-91-000 and EL18-19-000.4
3. On November 20, 2017, Nebraska Public Power District (NPPD) and American
Public Power Association (APPA) submitted timely requests for rehearing of the October
2017 Order. In addition, National Rural Electric Cooperative Association (NRECA) and
Midwest Energy, Inc. (Midwest) filed a timely request for rehearing and clarification of
the October 2017 Order. On February 28, 2018, SPP submitted a compliance filing in
Docket No. ER18-939-000 in response to the October 2017 Order (SPP’s Compliance
Filing). For the reasons discussed below, we grant rehearing of the October 2017 Order
and, accordingly, dismiss SPP’s Compliance Filing as moot.
I. Background
A. Non-Public Utility Rates and Refund Commitments
4. FPA section 201(f) exempts certain entities, such as state- or municipally-owned
utilities and cooperative utilities, from Part II of the FPA, “unless such provision makes
specific reference thereto.”5 With one limited exception,6 sections 205 and 206 of the
FPA do not contain such references and, by their terms, apply only to public utilities.7
However, the D.C. Circuit has held that when a non-public utility becomes a
transmission-owning member of a regional transmission organization (RTO) or
4 Sw. Power Pool, Inc., 161 FERC ¶ 61,062 (2017) (October 2017 Order).
5 See 16 U.S.C. § 824(f).
6 Section 206(e) provides the Commission with refund authority when section
201(f) entities (except for electric cooperatives or entities that sell less than 8,000,000
MWh per year) make voluntary short-term wholesale sales in organized markets under
rates established by a Commission-approved tariff and the sale violates the terms of the
tariff or applicable Commission rule, subject to additional restrictions as applied to
Bonneville Power Administration and Tennessee Valley Authority.
7 Bonneville Power Admin. v. FERC, 422 F.3d 908, 918 (9th Cir. 2005)
(Bonneville) (“FERC’s rate jurisdiction under § 205 and its refund jurisdiction under
§ 206 expressly apply only to public utilities”); Transmission Agency of N. Cal. v. FERC,
495 F.3d 663, 673 (D.C. Cir. 2007) (TANC) (noting that “the structure of the FPA clearly
reflects Congress’s intent to exempt governmental entities from FERC’s refund
authority”).
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Docket No. EL16-91-001, et al. - 3 -
independent system operator (ISO) and its revenue requirement becomes a component of
the RTO’s/ISO’s jurisdictional rate, the Commission has jurisdiction to analyze the non-
public utility’s rates, to the extent that those rates affect jurisdictional transactions, to
ensure that the RTO’s/ISO’s rates remain just and reasonable.8
5. Courts previously have found that the authority to review the rates of non-
jurisdictional entities, to the extent these rates are included in jurisdictional rates, does
not give the Commission the ability to direct non-jurisdictional entities to pay refunds. In
TANC, for example, the D.C. Circuit found that, although the Commission had authority
to review the City of Vernon, California’s (Vernon) transmission revenue requirement,
it lacked authority to direct Vernon to pay refunds.9 The D.C. Circuit expressly rejected
the Commission’s argument “that it has authority to enforce [an agreement by a non-
jurisdictional entity to pay refunds ordered by the Commission] because it was filed by
[California Independent System Operator, Inc. (CAISO)], a jurisdictional entity, and
approved by FERC.”10
6. Although the Commission “does not have refund authority over . . . governmental
entities and non-public utilities,”11 it has established the policy that, “when an RTO
proposes to include a non-public utility’s revenue requirement in the RTO’s rates, the
RTO may not implement the proposal unless the non-public utility makes a voluntary
commitment to make refunds if the rate, as filed, is later found to be not just and
reasonable.”12 That is, where there is a voluntary refund commitment, the Commission
will allow an RTO/ISO to collect a non-public utility’s proposed rate while the
Commission reviews its justness and reasonableness (similar to accepting a public
utility’s rate subject to refund). However, in the absence of such a voluntary refund
8 TANC, 495 F.3d at 667 (explaining that “FERC may consider the rates of a
municipal utility [participating transmission owner] to the extent that they affect the rates
of the ISO, which is subject to the FPA”) (citing Pac. Gas & Elec. Co. v. FERC, 306 F.3d
1112, 1114 (D.C. Cir. 2002)). The Commission thus reviews the non-public utility’s rate
under the same just and reasonable standard as FPA section 205. Id. at 672.
9 Id. at 673-76.
10 Id. at 676.
11 Bonneville, 422 F.3d at 911.
12 See October 2017 Order, 161 FERC ¶ 61,062 at P 20; Xcel Energy Servs. Inc. v.
FERC, 815 F.3d 947, 950 (D.C. Cir. 2016) (Xcel).
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Docket No. EL16-91-001, et al. - 4 -
commitment, “the Commission will delay the effective date of the proposed rate while
it conducts a section 205 review.”13
7. In 2016, the D.C. Circuit held in Xcel that the Commission erred by concluding
that it had no authority to direct refunds after it failed to apply this established policy and
instead allowed SPP’s filing of Tri-County Electric Cooperative’s (Tri-County) annual
transmission revenue requirement (ATRR) to go into effect without suspension or a
voluntary refund commitment, despite finding that the rates may be unjust and
unreasonable.14
B. July 2016 Order
8. In the July 2016 Order, the Commission instituted an FPA section 206 proceeding
and commenced paper hearing procedures to address concerns regarding the
Commission’s ability to ensure that SPP’s rates will be just and reasonable under FPA
section 20515 when they include the revenue requirement of a non-public utility
transmission owning member.16 These concerns arose in an order that the Commission
issued concurrently with the July 2016 Order, on remand from Xcel, regarding refunds
resulting from SPP’s proposed revisions to its Tariff to implement a formula rate for
Tri-County.17 A similar issue arose in another proceeding concerning SPP’s proposal
to allocate revenues it received on behalf of certain SPP transmission owners under a
settlement. In that case, SPP sought clarification that it could withhold revenues from
the settlement from non-public utility transmission owning members of SPP who had
not committed to make refunds in the event that the tariff revisions that SPP proposed
were revised as a result of the settlement judge procedures instituted in that proceeding.18
13 Xcel, 815 F.3d at 950.
14 The Commission initially found that SPP’s filing of Tri-County’s ATRR may
be unjust and unreasonable, but let the rate go into effect on April 1, 2012 without
suspension or voluntary refund commitment. Following rehearing, SPP obtained a
voluntary commitment from Tri-County to make refunds back to the February 22, 2013
date of the rehearing order. The Commission ultimately determined that Tri-County’s
facilities were not eligible to be rolled into SPP’s revenue requirement. Id. at 956.
15 16 U.S.C. § 824d.
16 July 2016 Order, 156 FERC ¶ 61,059 at P 6.
17 Sw. Power Pool, Inc., 156 FERC ¶ 61,057 (2016).
18 SPP, Motion for Clarification, Docket No. ER16-791-000 (filed May 13, 2016).
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The Commission granted SPP’s request,19 but recognizing the concern regarding the
collection of refunds from non-public utility transmission owning members in SPP, the
Commission issued the July 2016 Order, instituting the paper hearing in this docket.
In the July 2016 Order, the Commission stated that:
It is of concern that the refund commitments provided by the
non-public utility transmission owners thus far do not apply
to the full range of situations in which they may receive
revenues associated with service provided due to their status
as transmission-owning RTO members based on RTO rates,
terms or conditions that are found to be unjust and
unreasonable, in the same manner that public utility
transmission owners could be required to provide refunds of
such revenues under FPA sections 205 or 206.20
9. Therefore, the Commission instituted an FPA section 206 proceeding, established
paper hearing procedures, and noted that SPP might address the Commission’s concerns
by revising the SPP Tariff to require a prospective refund commitment from non-public
utility transmission owning members for all manner of refunds that may be ordered
in FPA section 205 and 206 proceedings related to revenues that they may receive
associated with service provided due to their status as transmission owning RTO
members.21 The Commission stated that, if a non-public utility transmission owning
member chooses not to make such a refund commitment under the Tariff revisions, then
SPP would remove the non-public utility transmission owning member’s transmission
revenue requirement from the SPP Tariff as of a prospective date determined by the
Commission.22
19 Sw. Power Pool, Inc., 156 FERC ¶ 61,058 (2016).
20 July 2016 Order, 156 FERC ¶ 61,059 at P 7.
21 Id. P 9.
22 Id.
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C. October 2017 Order
10. In the October 2017 Order, the Commission granted in part and denied in part
requests in the briefs for clarification of the July 2016 Order, and held in abeyance the
paper hearing pending completion of SPP’s stakeholder process.23 Among other things,
the Commission clarified that the refund commitment described in the July 2016 Order
must be a contractual commitment that is enforceable by the court, not the Commission.
The Commission explained that “[w]hen a non-public utility becomes a participating
transmission owner in an RTO, its transmission revenue requirement becomes a
component of the RTO’s jurisdictional rate.”24 The Commission stated that, under its
policy, “when an RTO proposes to include a non-public utility’s revenue requirement in
the RTO’s rates, the RTO may not implement that proposal unless the non-public utility
makes a voluntary commitment to make refunds if the rate, as filed, is later found to be
not just and reasonable.”25 The Commission relied on TANC for the proposition that
“a non-public utility’s voluntary contractual commitment to make refunds does not
authorize the Commission to issue an order requiring the nonpublic utility to make
refunds” and Alliant for the proposition that a court may enforce such commitments.26
On the other hand, the Commission described the D.C. Circuit in Xcel as acknowledging
this policy and holding that the Commission erred in “failing to adhere to its policy and
in not providing full retroactive relief to remedy this error.”27
11. In addition, the Commission instituted a new proceeding in Docket No. EL18-19-
000, pursuant to FPA section 206, to examine the SPP Membership Agreement and
other jurisdictional documents and consolidated it with Docket No. EL16-91-000. The
Commission also directed SPP to submit a compliance filing by February 28, 2018, with
a proposal to address the lack of a refund commitment for non-public utility transmission
23 October 2017 Order, 161 FERC ¶ 61,062. The Commission granted SPP’s
request for clarification that it should have flexibility to develop a proposal that
recognizes the unique status of Western Area Power Administration (Western) Upper
Great Plains (UGP) Region (Western-UGP) as a federal power marketing agency and
participating transmission owner in SPP. Id. P 56.
24 Id. P 18.
25 Id. P 20.
26 Id. P 21 (citing TANC, 495 F.3d at 675; Alliant Energy v. Neb. Pub. Power
Dist., 347 F.3d 1046, 1050 (8th Cir. 2003) (Alliant)).
27 Id. (citing Xcel, 815 F.3d at 950 (internal citations omitted)).
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owning members or show cause as to why revisions to its Tariff or other governing
documents are not necessary.
12. APPA and NPPD filed timely requests for rehearing of the October 2017 Order.
NRECA and Midwest filed a timely request for rehearing and clarification of the
October 2017 Order. The Kansas Corporation Commission (Kansas Commission) filed
an answer in support of NRECA’s and Midwest’s request for rehearing and clarification.
II. SPP’s Compliance Filing
13. On February 28, 2018, SPP made a filing proposing amendments to its
Membership Agreement and the company-specific provisions of the Membership
Agreement applicable to Western-UGP (Western-UGP Membership Agreement).
Specifically, SPP proposes to add a new section 3.0(i) of its Membership Agreement to
require non-public utility transmission owning members to pay refunds on any amount
collected by SPP on behalf of and distributed to such non-jurisdictional member for
overcharges caused by (1) a billing or computational error, as agreed by SPP and the
non-jurisdictional member, or (2) the inclusion of facilities not deemed Transmission
Facilities, as defined by Attachment AI of the SPP Tariff.
14. SPP also proposes language in new section 3.0(i) of its Membership Agreement to
require non-public utility transmission owning members to pay refunds for charges “in
excess of the rate ultimately determined in any other order issued by the [Commission]
to be just and reasonable . . . .”28 SPP states that such refunds would be limited in the
event that the non-jurisdictional member cannot issue refunds because, as the language
proposed in new section 3.0(i) provides, “[(1)] its rates are subject to a state regulatory
authority authorized by state statute to set transmission rates that are subject to judicial
review and [(2)] the refund order issued by the [Commission] is inconsistent with
applicable state law, regulation, or regulatory determination.”29
15. With respect to Western-UGP Membership Agreement, SPP proposes new
section A1.12 , which SPP states will limit and condition Western-UGP’s refund
obligations as follows: (1) by paying refunds, Western-UGP does not waive its non-
jurisdictional status or its rights described in sections 3.10 and 3.11 of the Western-UGP
Membership Agreement; (2) Western-UGP’s refund obligations shall be prospective
from the date of an initial Commission order establishing the date of any refund;
(3) Western-UGP shall make a refund only if such refund is not otherwise covered by
28 SPP Compliance Filing, Docket No. ER18-939-000, Transmittal Letter, at 9
(Feb. 28, 2018) (SPP Compliance Filing Transmittal Letter).
29 Id.
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section 3.10 of the Western-UGP Membership Agreement; and (4) any disputes related
to section A1.12 shall be resolved in accordance with federal contract law and interest
shall be capped at the Prompt Payment Act interest rates.
III. Notice and Responsive Pleadings
16. Notice of the FPA section 206 proceeding in Docket No. EL18-19-000 initiated
in the October 2017 Order to examine the SPP Membership Agreement and any other
Commission-jurisdictional SPP documents that must be revised to fully implement the
refund commitment concerns identified in the July 2016 Order was published in the
Federal Register, 82 Fed. Reg. 49,364 (Oct. 25, 2017) with interventions and protests due
on or before November 9, 2017. The notice indicated that the refund effective date will
be the date of publication of the notice in the Federal Register.
17. The Missouri Public Service Commission filed a notice of intervention. Timely
motions to intervene were filed by: Midwest; Associated Electric Cooperative, Inc.;
Western Farmers Electric Cooperative; Minnkota Power Cooperative, Inc.; Southwestern
Power Administration; Sunflower Electric Power Corporation (Sunflower); Mid-Kansas
Electric Company, LLC (Mid-Kansas); NPPD; Xcel Energy Services Inc. (Xcel); APPA;
Tri-County; Western Area Power Administration (Western); Southwest Transmission
Dependent Utility Group;30 and Michigan Public Power Agency. SPP filed a motion to
intervene out of time.
18. Notice of SPP’s Compliance Filing was published in the Federal Register, 83 Fed.
Reg. 9728 (Mar. 7, 2018), with interventions and protests due on or before March 21,
2018.
19. Timely motions to intervene were filed by: ITC Great Plains, LLC; Westar
Energy, Inc. (Westar); Mid-Kansas; Sunflower; Kansas City Power & Light Company
and KCP&L Greater Missouri Operations Company (KCP&L Companies) Companies;
American Electric Power Service Corporation; NPPD; Central Power Electric
Cooperative, Inc.; Associated Electric Cooperative, Inc.; Xcel, City Utilities of
Springfield, Missouri; United States Department of Energy – Headquarters; Empire
30 Southwest Transmission Dependent Utility Group is comprised of Aguila
Irrigation District, Ak-Chin Energy Services, Buckeye Water Conservation and Drainage
District, Central Arizona Water Conservation District, Electrical District No. 3, Electrical
District No. 4, Electrical District No. 6, Electrical District No. 7, Electrical District No. 8,
Harquahala Valley Power District, Hohokam Irrigation and Drainage District, Maricopa
County Municipal Water District No. 1, McMullen Valley Water Conservation and
Drainage District, City of Needles, Roosevelt Irrigation District, City of Safford,
Tonopah Irrigation District, and Wellton-Mohawk Irrigation and Drainage District.
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District Electric Company; Lincoln Electric; Western; Southwestern Power
Administration; Kansas Power Pool; Western Farmers Electric Cooperative; NRECA;
Omaha Public Power District (OPPD); Midwest; APPA; Basin Electric Power
Cooperative; Oklahoma Gas and Electric Company; and Southwest Transmission
Dependent Utility Group.
20. NPPD, OPPD, Lincoln Electric, Midwest, Sunflower, Mid-Kansas, and Western-
UGP filed comments in support of SPP’s Compliance Filing. Indicated SPP
Transmission Owners31 and KC&PL Companies filed protests opposing SPP’s
Compliance Filing. SPP and APPA filed answers to the comments and protests on its
Compliance Filing.
IV. Discussion
A. Procedural Matters
21. Pursuant to Rule 214 of the Commission’s Rules of Practice and Procedure,
18 C.F.R. § 385.214 (2019), the notice of intervention and timely, unopposed motions
to intervene serve to make the entities that filed them parties to the proceedings in
which they sought intervention.
22. Pursuant to Rule 214(d) of the Commission’s Rules of Practice and Procedure,
18 C.F.R. § 385.214(d), we grant SPP’s late-filed motion to intervene in Docket
No. EL18-19-001 given its interest in the proceeding, the early stage of the proceeding,
and the absence of undue prejudice or delay.
23. Rule 713(d) of the Commission’s Rules of Practice and Procedure, 18 C.F.R.
§ 385.713(d)(1) (2019), prohibits an answer to a request for rehearing. Accordingly, we
reject the Kansas Commission’s answer in support of Midwest’s and NRECA’s request
for rehearing and clarification in Docket Nos. EL16-91-001 and EL18-19-001.
24. Rule 213(a)(2) of the Commission’s Rules of Practice and Procedure, 18 C.F.R.
§ 385.213(a)(2) (2019), prohibits an answer to a protest unless otherwise ordered by the
decisional authority. We are not persuaded to accept SPP’s and APPA’s answers in
Docket No. ER18-939-000 and will, therefore, reject them.
31 Indicated SPP Transmission Owners are American Electric Power Service
Corporation, Public Service Company of Oklahoma, Southwestern Electric Power
Company, Empire District Electric Company, Oklahoma Gas & Electric Company,
Westar, Xcel, and Southwestern Public Service Company.
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B. Substantive Matters
1. Rehearing Requests of the October 2017 Order
25. APPA alleges that the Commission erred in the October 2017 Order by finding
that it has authority to require SPP to revise its Tariff and governing documents to
include refund commitments by non-public utility transmission owning members, and
by relying on the non-public utility transmission owning members’ choice as to RTO
membership and revenue recovery under the SPP Tariff to justify that finding. APPA
asserts that the Commission’s reliance on Alliant is misplaced because that case held that
a court can enforce a refund commitment in an agreement that an entity has itself already
chosen to execute, not whether the Commission may require a jurisdictional agreement to
include such a commitment.32 APPA argues that, because the Commission may not
regulate non-jurisdictional transmission owning members of an RTO, whether these
entities have refund commitments is irrelevant to whether an RTO’s rates are just and
reasonable. APPA and NPPD argue that the Commission erred by ordering SPP to make
a compliance filing without first finding that the SPP Tariff and governing documents
were unjust, unreasonable, and unduly discriminatory, or preferential. APPA states that
the requirements the Commission has imposed contravene the Commission’s policy of
accommodating participation of non-public utilities in RTOs, thereby discouraging non-
public utility participation in SPP.
26. NPPD suggests that the Commission impose a carve-out for existing SPP non-
public utility transmission owning members so that only new members would be bound
by the refund commitments imposed in this case. NPPD argues that the October 2017
Order reverses “a decade-long policy of approving and maintaining provisions in RTO
tariffs and membership agreements to accommodate the needs of non-jurisdictional
public power entities.”33 NPPD also asserts that this order contradicts the Commission’s
approval of WestConnect’s regional transmission planning and cost allocation process
that enables non-public utilities to participate as coordinating transmission owners
without being subject to regional cost allocation.
27. Like APPA and NPPD, NRECA and Midwest argue that the Commission in
the October 2017 Order erred in doing indirectly what it is prohibited from doing
directly, i.e., by requiring that SPP include a refund commitment by non-public utility
32 APPA Rehearing Request at 7-8 (citing Alliant, 347 F.3d at 1050); NPPD
Rehearing Request at 9-12.
33 NPPD Rehearing Request at 17.
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Docket No. EL16-91-001, et al. - 11 -
transmission owning members, a requirement that the Commission concedes that it
could not enforce.34
28. NPPD asserts that, if exercised, imposing a commitment by NPPD to make
refunds of unknown amounts in response to future Commission orders creates a conflict
with Nebraska state law and a portion of SPP’s existing Tariff that elevates state law
over Commission regulation with respect to public power entities. NPPD states that
the Commission has not made the requisite threshold finding or provided analysis
showing that conditions have changed such that the SPP Tariff and NPPD’s Membership
Agreement are unjust and unreasonable. NPPD argues that the October 2017 Order
unduly discriminates against NPPD by providing SPP flexibility to develop a proposal
that recognizes the federal-regulated status of Western-UGP without recognizing the
similarly situated state-regulated status of NPPD.
29. NRECA and Midwest argue that, before the ATRR of a non-public transmission
owning member of SPP is included in the SPP Tariff, any refund commitment before
the Commission should account for prior findings made by state regulators in order to
prevent a jurisdictional conflict. NRECA and Midwest request that the Commission
clarify that in the October 2017 Order the Commission held that accommodating and
accounting for these jurisdictional issues is within the scope of what SPP must address in
its stakeholder process. NRECA and Midwest argue that if these issues are not resolved,
non-public utility transmission owning members of SPP could be forced to choose either
to make refunds that expose them to non-recovery under state-jurisdictional rates or
undertake the complex and costly decision to withdraw from SPP.
2. Commission Determination
30. For the reasons discussed below, we grant rehearing of the October 2017 Order
and find that it is neither necessary nor appropriate to impose the refund commitment
contemplated there on non-public utility transmission owning members in SPP.
31. First, we find that the D.C. Circuit’s Xcel decision does not compel the
Commission to require a prospective refund commitment from all non-public utility
transmission owning members in SPP, as contemplated by the October 2017 Order.
In Xcel, the D.C. Circuit based its decision on the fact that, having adopted a policy
of requiring voluntary refund commitments before allowing RTOs to implement rates
including the revenue requirements of non-jurisdictional entities, the Commission failed
to follow its established policy and allowed a rate that it had determined may be unjust
34 NRECA Rehearing Request at 4-5.
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Docket No. EL16-91-001, et al. - 12 -
and unreasonable to go into effect without suspension or voluntary refund commitment.35
The Commission had acknowledged its own legal error, and the court found that, in
light of that legal error, the Commission could provide a remedy under FPA section 309.
Here, by contrast, prior to the July 2016 Order, as clarified and confirmed in the
October 2017 Order, the Commission had no comparable policy requiring non-public
utility transmission owners to provide a prospective refund commitment for all situations
under which refunds might be directed pursuant to FPA sections 205 and 206. In
addition, here the Commission made no legal error analogous to the facts of Xcel, where
the court focused on the Commission’s remedial discretion to address such an error.
32. Second, the D.C. Circuit has recognized that the Commission generally does not
have authority to require FPA section 201(f) entities to make refunds if they do not
voluntarily do so.36 Instead, the Commission’s refund authority found in FPA sections
205 and 206 applies to FPA section 201(f) entities only in the limited circumstances
described in FPA section 206(e); FPA sections 205 and 206 otherwise apply only to
jurisdictional public utilities. The Xcel decision is consistent with that understanding,
acknowledging that the Commission has no authority under FPA section 205 to require a
non-jurisdictional entity to make refunds.37 Thus, non-public utilities are not similarly
situated to other RTO transmission owning-members with respect to refunds by virtue of
the fact that they are not generally subject to the Commission’s jurisdiction under FPA
sections 205 and 206.
33. Third, the Commission retains authority to approve voluntary contractual refund
commitments when RTOs include a non-public utility’s ATRR in their jurisdictional
rates. Although the Commission has the authority to review non-public utility rates
included in jurisdictional rates to ensure that the jurisdictional rate remains just and
35 Xcel, 815 F.3d at 953.
36 See, e.g., Bonneville, 422 F.2d at 926; TANC, 495 F.3d at 673.
37 Xcel, 815 F.3d at 950 (citing TANC, 495 F.3d at 672). In addition, the D.C.
Circuit subsequently cited TANC in finding that the Commission could order recoupment
of funds paid in error to a non-jurisdictional entity because, although “[t]he case law is
clear that § 205, when read in conjunction with § 201(f), bars [the Commission] from
ordering a non-jurisdictional entity to provide a refund to another entity,” recoupment
under FPA section 309, 16 U.S.C. § 825h (2018), is a distinct remedy. TNA Merchant
Projects, Inc. v. FERC, 857 F.3d 354, 359-62 (D.C. Cir. 2017) (citing TANC, 495 F.3d
at 673-75).
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Docket No. EL16-91-001, et al. - 13 -
reasonable, it does not necessarily follow that a refund commitment from those non-
public utilities is an intrinsic component of a just and reasonable rate. Generally, the
Commission does not treat refunds as a measure of a just and reasonable rate, but as an
available remedy when a rate has been found unjust and unreasonable.38
34. Fourth, declining to require the refund commitment contemplated in the October
2017 Order is consistent with the Commission’s longstanding policy goal of encouraging
the participation of non-public utilities in RTOs/ISOs, 39 and appropriately accounts for
distinct characteristics of these entities like those described above.
35. For these reasons, we find that the lack of a general refund commitment by non-
public utilities similar to that applicable to non-jurisdictional entities pursuant to FPA
sections 205 and 206 does not render SPP’s rates unjust and unreasonable or unduly
discriminatory or preferential.40 In light of this determination, we terminate the FPA
section 206 proceedings instituted by the Commission in the July 2016 Order in Docket
No. EL16-91-000 and the October 2017 Order in Docket No. EL18-19-000.
36. In granting rehearing of the October 2017 Order and terminating these section 206
proceedings, we note that the Commission’s longstanding policy regarding its treatment
of section 205 filings by RTOs to implement rate changes by non-public utility
38 See, e.g., City of Redding v. FERC, 693 F.3d 828, 838-39 (9th Cir. 2012)
(citations omitted) (“Congress expanded FERC’s authority to address ‘unjust and
unreasonable’ rates by adding § 206(b) to the FPA in 1988, over fifty years after the
enactment of the original law. Section 206(b) provides that after FERC has determined a
rate to be unjust and unreasonable, it ‘may order refunds of any amounts paid . . . in
excess of those which would have been paid under the just and reasonable rate . . . which
the Commission orders to be thereafter observed and in force.’”).
39 TANC, 495 F.3d at 667 (citing Order Nos. 888 and 2000 and explaining that the
Commission encouraged all transmission owners, including non-public utility
transmission owners, to place their transmission under the control of RTOs voluntarily).
40 Because we grant rehearing of the October 2017 Order and find that it is neither
necessary nor appropriate to impose the refund commitment contemplated there on non-
public utility transmission members in SPP, we do not address requests for rehearing
regarding conflicts with Nebraska state law or accounting for prior findings made by state
regulators.
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transmission owners has not changed. In Xcel, the D.C. Circuit described that policy as
one pursuant to which the Commission:
will accept the RTO’s filing of a tariff revision where the
non-jurisdictional entity voluntarily agrees to make refunds in
the event the Commission determines the rate as filed is not
just and reasonable, or the Commission will delay the
effective date of the proposed rate while it conducts a section
205 review, unless there is no material issue.41
The Commission intends to apply this policy with respect to such filings made by SPP.
37. Finally, because we are granting rehearing of the October 2017 Order, we dismiss
SPP’s Compliance Filing in Docket No. ER18-939-000 as moot, and terminate that
proceeding.
The Commission orders:
(A) The requests for rehearing of the October 2017 Order are hereby granted, as
discussed in the body of this order.
(B) SPP’s Compliance Filing is hereby dismissed as moot, as discussed in the
body of this order.
(C) The proceeding in Docket No. ER18-939-000 is hereby terminated, as
discussed in the body of this order.
(D) The proceedings in Docket Nos. EL16-91-000 and EL18-19-000 are hereby
terminated, as discussed in the body of this order.
By the Commission.
( S E A L )
Nathaniel J. Davis, Sr.,
Deputy Secretary.
41 Xcel, 815 F.3d at 950 (citing, e.g., Lively Grove Energy Partners, LLC,
140 FERC ¶ 61,252, at P 47 & n. 59 (2012)).
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Document Content(s)
EL16-91-001.DOCX......................................................1-14
20200521-3031 FERC PDF (Unofficial) 05/21/2020
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SouthwestPowerPool SPPorg southwest-power-poolHelping our members work together to
keep the lights on... today and in the future.
SPP MEMBERSHIP EXIT FEE: FERC ORDER ON COMPLIANCE ER19-2522
Page 32 of 58
2
ER19-2522: SPP COMPLIANCE FILING
• Background
• FERC’s July 16, 2020 Order
• Current Status
Page 33 of 58
3
ER19-2522: BACKGROUND
April 2019: FERC issued an order partially granting a complaint filed by the American Wind Energy
Association (AWEA) and The Wind Coalition against SPP, finding that SPP’s membership exit fee, as
applied to non-transmission owners, was unjust and unreasonable because it created a barrier to
membership, was not needed to maintain SPP’s financial solvency or to avoid cost shifts, and was
excessive as a means for ensuring the stability of SPP’s membership. FERC ordered SPP to eliminate
its membership exit fee for non-transmission owners.
August 2019: SPP submitted a compliance filing in Docket No. ER19-2522.
December 2019: FERC issued an order conditionally accepting SPP’s compliance filing in Docket No.
ER19-2522-000 and directed SPP to submit a further compliance filing to revise its Governing
Documents Tariff to ensure that a withdrawing non-transmission-owning member is only exempt
from paying a share of SPP’s long-term financial obligations, rather than all existing obligations
associated with the member’s withdrawal. FERC also ordered SPP to propose revisions to ensure that
a withdrawing transmission-owning member’s previous year net energy for load includes the load of
all load-serving entities connected to the withdrawing transmission owner’s system.
April 29, 2020: SPP submitted revisions to its Governing Documents Tariff in compliance with the
December 2019 order
July 16, 2020: FERC issued order finding that SPP’s proposed revisions comply with the directives in
the December 2019 Order. FERC accepted SPP’s filing, effective December 19, 2019.
Page 34 of 58
4
EL19-2522: JULY 16, 2020 ORDER
P. 17: FERC finds that SPP’s proposed revisions comply with the directives in the December 2019 Order.
The proposed revisions ensure that a withdrawing non-transmission-owning member is only exempt from paying a share of SPP’s long-term financial obligations, rather than all existing obligations associated with withdrawal.
Additionally, the proposed revisions ensure that a withdrawing transmission-owning member’s previous year net energy for load includes the load of all load-serving entities connected to the withdrawing transmission owner’s system.
Page 35 of 58
5
EL19-2522: CURRENT STATUS
• FERC accepted SPP’s compliance filing effective December 19, 2019.
• The Membership Agreement and Bylaws reflect
• Only Transmission Owning Member’s withdrawal obligations include obligation to pay SPP’s long-term debt
• Non-Transmission Owning Member’s withdrawal obligations do not include obligation to pay SPP’s long-term debt
Page 36 of 58
6
EL19-2522: CURRENT STATUS
• Potential Issues that may arise in the future
• Treatment of load that exits the footprint
which is served by more than one
transmission owner member
• Determination of responsibility for “all load”
attached to the withdrawing transmission
owner’s system
• Others?
Page 37 of 58
7
EL19-2522: CURRENT STATUS
• Recommendation:
• Staff will propose a process to CGC, to be
used for reviewing any potential open items,
including a straw proposal if applicable
Page 38 of 58
8
QUESTIONS?
Page 39 of 58
172 FERC ¶ 61,028
UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
Before Commissioners: Neil Chatterjee, Chairman;
Richard Glick, Bernard L. McNamee,
and James P. Danly.
Southwest Power Pool, Inc. Docket No. ER19-2522-002
ORDER ON COMPLIANCE
(Issued July 16, 2020)
On April 29, 2020, Southwest Power Pool, Inc. (SPP) submitted revisions to its
Governing Documents Tariff in compliance with directives in a Commission order issued
on December 19, 2019.1 As discussed below, we find that SPP’s proposed revisions
comply with the directives in the December 2019 Order. Accordingly, we accept SPP’s
filing, effective December 19, 2019.
I. Background
In April 2019, the Commission issued an order partially granting a complaint filed
by the American Wind Energy Association (AWEA) and The Wind Coalition against
SPP, finding that SPP’s membership exit fee,2 as applied to non-transmission owners,
was unjust and unreasonable because it created a barrier to membership, was not needed
to maintain SPP’s financial solvency or to avoid cost shifts, and was excessive as a
means for ensuring the stability of SPP’s membership. The Commission directed SPP to
eliminate its membership exit fee for non-transmission owners.3 In August 2019, SPP
submitted a compliance filing in Docket No. ER19-2522-000 to comply with the
Commission’s directive in the Complaint Order.
1 Sw. Power Pool, Inc., 169 FERC ¶ 61,227 (2019) (December 2019 Order).
2 SPP’s membership exit fee, as it existed at the time of the complaint, was a fee
charged to a member that chose to withdraw its membership in SPP and was calculated
as the withdrawing member’s share of SPP’s outstanding long-term financial obligations.
SPP, Governing Documents Tariff, Membership Agreement, § 4.3.2(b)(iii) (2.0.0);
Bylaws, § 8.7.2 (4.0.0) (describing the calculation).
3 Am. Wind Energy Ass’n v. Sw. Power Pool, Inc., 167 FERC ¶ 61,033 (2019)
(Complaint Order).
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Docket No. ER19-2522-002 - 2 -
In the December 2019 Order, the Commission conditionally accepted SPP’s
compliance filing in Docket No. ER19-2522-000 and directed SPP to submit a further
compliance filing to revise its Governing Documents Tariff to ensure that a withdrawing
non-transmission-owning member is only exempt from paying a share of SPP’s long-
term financial obligations, rather than all existing obligations associated with the
member’s withdrawal.4 The Commission also directed SPP to propose revisions to
ensure that a withdrawing transmission-owning member’s previous year net energy
for load includes the load of all load-serving entities connected to the withdrawing
transmission owner’s system.5
II. SPP Filing
SPP proposes to revise section 8.7.1 of its Bylaws to remove current subsections
(a) through (e), which describe a withdrawing member’s existing obligations, and to
instead provide that such obligations will be defined in accordance with section 4.3.2 of
SPP’s Membership Agreement.6 SPP states that as a result, the Bylaws will reference
the existing obligations contained in the Membership Agreement, rather than duplicating
the language in both documents, and that retaining this language in the Membership
Agreement is appropriate because that is the contractual arrangement between SPP and
each member.7
In addition, SPP proposes to revise section 8.7.2 of its Bylaws to provide that a
withdrawing transmission-owning member’s previous year net energy for load includes
the load of all load-serving entities connected to the withdrawing transmission-owning
member’s system. SPP further proposes conforming edits to reference the existing
obligations for transmission-owning members contained in proposed sections 4.3.2(b)-(f)
of the Membership Agreement.8
SPP proposes several revisions to section 4.3.2 of its Membership Agreement.
Proposed section 4.3.2(a) provides that a withdrawing transmission-owning member shall
pay all existing obligations set forth in section 4.3.2(b), while non-transmission-owning
members will only be subject to the existing obligations defined in sections 4.3.2(b)(i)
through (iii). Proposed sections 4.3.2(b)(i) through (iii) include the member’s unpaid
4 December 2019 Order, 169 FERC ¶ 61,227 at P 114.
5 Id. P 115.
6 SPP, Governing Documents Tariff, Bylaws, § 8.7.1 (5.1.0).
7 Transmittal at 4.
8 SPP, Governing Documents Tariff, Bylaws, § 8.7.2 (5.1.0).
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Docket No. ER19-2522-002 - 3 -
annual membership fee,9 unpaid dues or other assessments,10 and “any costs, expenses or
liabilities incurred by SPP directly due to the Termination, regardless of when incurred or
payable,”11 respectively. Proposed section 4.3.2(b)(iv) provides that a withdrawing
transmission-owning member’s existing obligations will additionally include the
member’s share of SPP’s long-term debts, including any prepayment premiums or
penalties.
SPP also proposes to revise section 4.3.2(a) of the Membership Agreement to
provide that both transmission-owning and non-transmission-owning members will
remain subject to the partial termination, invoicing, and refund procedures set forth in
sections 4.3.2(c)-(f) upon withdrawal. SPP also proposes to revise sections 4.3.2(c) and
4.3.2(f) to add the phrase “if applicable” to the obligations contained therein. SPP states
that its proposed revision to section 4.3.2(f) clarifies that long-term financial obligations,
as defined in section 4.3.2, apply only to transmission-owning members.12
III. Notice and Responsive Pleadings
Notice of SPP’s filing was published in the Federal Register, 85 Fed. Reg. 26,677
(May 5, 2020), with interventions and protests due on or before May 20, 2020. On
May 20, 2020, AWEA, Solar Energy Industries Association, Advanced Power Alliance,
Sustainable FERC Project, and Solar Council (collectively, Renewable Advocates) and
EDF Renewables, Inc., RWE Renewables Americas, LLC, and Savion, LLC
(collectively, SPP Generation Market Participants) filed protests.13 Savion, LLC also
filed a timely motion to intervene. On June 4, 2020, SPP filed an answer to the protests.
9 SPP, Governing Documents Tariff, Membership Agreement, § 4.3.2(b)(i) (3.1.0).
10 SPP, Governing Documents Tariff, Membership Agreement, § 4.3.2(b)(ii)
(3.1.0).
11 SPP, Governing Documents Tariff, Membership Agreement, § 4.3.2(b)(iii)
(3.1.0).
12 Transmittal at 7.
13 AWEA, Solar Energy Industries Association, Advanced Power Alliance,
Sustainable FERC Project, and EDF Renewables, Inc. intervened and were granted party
status earlier in this proceeding. See December 2019 Order, 169 FERC ¶ 61,227 at P 17.
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Docket No. ER19-2522-002 - 4 -
IV. Discussion
A. Procedural Matters
Pursuant to Rule 214 of the Commission’s Rules of Practice and Procedure,
18 C.F.R. § 385.214 (2019), Savion, LLC’s timely, unopposed motion to intervene
serves to make it a party to this proceeding.
Rule 213(a)(2) of the Commission’s Rules of Practice and Procedure, 18 C.F.R.
§ 385.213(a)(2) (2019), prohibits an answer to a protest unless otherwise ordered by the
decisional authority. We accept SPP’s answer because it has provided information that
assisted us in our decision-making process.
B. Substantive Matters
As discussed below, we find that SPP’s proposed revisions comply with the
directives in the December 2019 Order. Accordingly, we accept SPP’s filing, effective
December 19, 2019.14
1. Renewable Advocates Protest
Renewable Advocates state that they generally support SPP’s filing, but they
request that the Commission direct SPP to make a further clarifying revision to proposed
section 4.3.2(b)(iii) in the Membership Agreement.15 Specifically, Renewable Advocates
contend that SPP’s proposed language is broadly worded and contains potential
ambiguity as to the precise types of costs that are to be borne by withdrawing non-
transmission-owning members. Renewable Advocates state that they are unaware of any
SPP guidance document, business practice, or other source that provides further detail
regarding which costs might be included under proposed section 4.3.2(b)(iii). Renewable
Advocates request that the Commission direct SPP to revise proposed section 4.3.2(b)(iii)
to read (with proposed revisions in underline/strikeout): “Any costs, expenses or
liabilities incurred by SPP to process or effectuate directly due to the Member’s
withdrawal directly due to the Termination, regardless of when incurred or payable.”
Renewable Advocates maintain that without this specific clarification, SPP’s proposed
language increases uncertainty and perpetuates barriers to membership in SPP. In the
alternative, Renewable Advocates request that the Commission clarify that it interprets
14 In the December 2019 Order, the Commission established December 19, 2019
as the effective date for SPP’s compliance filing. Id. P 116.
15 Renewable Advocates Protest at 1.
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Docket No. ER19-2522-002 - 5 -
SPP’s proposed language to only include direct costs, expenses, or liabilities incurred to
process or effectuate a member’s termination.16
2. SPP Generation Market Participants Protest
SPP Generation Market Participants state that they are members of Renewable
Advocates and support Renewable Advocates’ comments and proposed reforms in this
proceeding.17 In addition, SPP Generation Market Participants argue that the existing
obligations defined in proposed section 4.3.2(b)(iii) of the Membership Agreement,
which apply to all withdrawing members, create uncertainty for non-transmission-owning
members because SPP could potentially interpret “liabilities incurred by SPP directly
due to the Termination, whenever incurred or payable” to include SPP’s long-term
debts and pensions historically incurred by SPP to support the market in which the
non-transmission-owning member operates.18 According to SPP Generation Market
Participants, this outcome would contravene the Commission’s finding that SPP has no
need to include such liabilities in the exit fee of a non-transmission-owning member.19
SPP Generation Market Participants further argue that SPP has not supported
its proposal to subject all members, rather than transmission-owning members only,
to sections 4.3.2(c) and 4.3.2(f) of the Membership Agreement. According to SPP
Generation Market Participants, the calculation of a member’s net energy for load ratio
described in section 4.3.2(c) should only apply to transmission-owning members. SPP
Generation Market Participants maintain that despite SPP’s proposed “if applicable”
qualifier, this provision suggests that a withdrawing non-transmission-owning member
may be required to pay a share of SPP’s long-term debts, liabilities, and pensions.20 SPP
Generation Market Participants contend that proposed section 4.3.2(f), which provides
that existing member obligations include “amounts that SPP expects to carry between the
date of Member’s Notice of Termination and the Member’s Termination Date,” similarly
suggests that a withdrawing non-transmission-owning member may be required to pay a
share of SPP’s long-term debts, despite SPP’s proposed “if applicable” language. SPP
Generation Market Participants request that the Commission direct SPP to either revise
sections 4.3.2(c) and 4.3.2(f) to provide that these sections only apply to transmission-
owning members, or to revise section 4.3.2(a) to remove the references to sections
16 Renewable Advocates Protest at 4.
17 SPP Generation Market Participants Protest at 1.
18 Id. at 3.
19 Id. at 3-4 (citing Complaint Order, 167 FERC ¶ 61,033 at P 60).
20 Id. at 5.
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Docket No. ER19-2522-002 - 6 -
4.3.2(c) and 4.3.2(f). SPP Generation Market Participants state that they prefer the
former revision because it will add maximum certainty and enable non-transmission
owners to better understand their likely cost exposure if membership were to be
terminated in the future.21
3. SPP Answer
SPP disagrees that proposed section 4.3.2(b)(iii) of the Membership Agreement is
ambiguous. SPP contends that the phrase “incurred by SPP directly due to the
Termination” makes clear that the exit fee for a non-transmission-owning member must
be directly due to its termination. SPP also states that the phrase “regardless of when
incurred or payable” is intended to capture costs that SPP may incur directly due to a
non-transmission-owning member’s termination within the two-year notice period
required by the Membership Agreement. SPP states that it does not disagree with the
conclusions reached by commenters that reinforce the Commission’s directive that SPP’s
withdrawal obligation applicable to non-transmission-owning members should not
include SPP’s long-term financial obligations.22
SPP asserts that the provisions in proposed sections 4.3.2(c)-(f) of the Membership
Agreement need to apply to all members because they contain uniform termination
processes, timing requirements, and other administrative items. SPP contends that
section 4.3.2(c) plainly provides that if a member has no load, its existing obligations
due upon partial termination will not include costs attributable to load. Similarly, SPP
argues that the phrase “if applicable” in proposed section 4.3.2(f) makes clear that non-
transmission-owning members are not responsible for paying a share of SPP’s long-term
financial obligations.23
4. Commission Determination
We find that SPP’s proposed revisions comply with the directives in the December
2019 Order. The proposed revisions ensure that a withdrawing non-transmission-owning
member is only exempt from paying a share of SPP’s long-term financial obligations,
rather than all existing obligations associated with withdrawal.24 Additionally, the
proposed revisions ensure that a withdrawing transmission-owning member’s previous
21 Id. at 5-6.
22 SPP Answer at 4-5.
23 Id. at 6-7.
24 See December 2019 Order, 169 FERC ¶ 61,227 at P 114 and supra P 6.
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Docket No. ER19-2522-002 - 7 -
year net energy for load includes the load of all load-serving entities connected to the
withdrawing transmission owner’s system.25
We disagree with Renewable Advocates’ assertion that proposed section
4.3.2(b)(iii) of SPP’s Membership Agreement creates ambiguity as to the costs that will
be borne by withdrawing non-transmission-owning members. We find that the proposed
phrase “incurred by SPP directly due to the Termination” requires a direct connection
between the costs that SPP may recover and the membership termination. It is reasonable
for SPP to recover costs it incurs directly due to a member’s termination of its
membership in SPP.26 Additionally, we note that the language Renewable Advocates
take issue with (“[a]ny costs, expenses or liabilities incurred by SPP directly due to the
Termination, regardless of when incurred or payable”) is existing language in SPP’s
Bylaws and Membership Agreement.27 In the Complaint Order and the December 2019
Order, the Commission only required SPP to eliminate its exit fee for non-transmission
owners, with “exit fee” meaning a member’s share of SPP’s long-term financial
obligations.28 The Commission did not direct any changes related to other obligations
associated with membership withdrawal.29 Accordingly, we decline to direct SPP to
further revise its proposal as requested by Renewable Advocates.
We disagree with SPP Generation Market Participants’ arguments that proposed
sections 4.3.2(b)(iii), 4.3.2(c), and 4.3.2(f) of the Membership Agreement could be
interpreted to provide that withdrawing non-transmission-owning members are subject to
a share of SPP’s long-term financial obligations. We find that it would not be reasonable
to interpret section 4.3.2(b)(iii) to mean that non-transmission-owning members would
be subject to a share of SPP’s long-term financial obligations. First, proposed sections
4.3.2(a) and 4.3.2(b)(iv) of the Membership Agreement, as well as section 8.7.2 of SPP’s
25 See December 2019 Order, 169 FERC ¶ 61,227 at P 115 and supra P 5.
26 December 2019 Order, 169 FERC ¶ 61,227 at P 114 (“Non-transmission owners
should still be responsible for other obligations associated with their membership
withdrawal, such as unpaid membership fees, dues, assessments, or charges, as well as
costs, expenses, or liabilities incurred by SPP directly due to membership termination
(excluding costs, expenses, or liabilities related to SPP’s long-term financial
obligations).”).
27 Compare SPP, Governing Documents Tariff, Membership Agreement,
§ 4.3.2(b)(iii) (3.1.0) with SPP, Governing Documents Tariff, Membership Agreement,
§ 4.3.2(b)(iv) (3.0.0) and SPP, Governing Documents Tariff, Bylaws, § 8.7.1(d) (5.0.0).
28 December 2019 Order, 169 FERC ¶ 61,227 at PP 4, 114.
29 Id. P 114.
20200716-3028 FERC PDF (Unofficial) 07/16/2020
Page 46 of 58
Docket No. ER19-2522-002 - 8 -
Bylaws, establish that only transmission owners will pay a portion of SPP’s long-term
financial obligations.30 In addition, costs related to SPP’s long-term financial obligations
are not incurred “directly due to” any member’s withdrawal and thus cannot be recovered
pursuant to proposed section 4.3.2(b)(iii). SPP explains in its answer that the phrase
“regardless of when incurred or payable” is intended to refer to costs that SPP may incur
directly due to a non-transmission-owning member’s termination within the two-year
notice period required by the Membership Agreement, rather than costs incurred prior to
the notice period.
Further, we find that, to the extent proposed section 4.3.2(c) requires departing
members to pay a share of SPP’s long-term debts in the event of a partial termination, it
does not apply to non-transmission-owning members because such members do not have
load, as reflected by SPP’s proposed “if applicable” language.31 We similarly find that
SPP’s proposed “if applicable” language provides that section 4.3.2(f) does not apply to
non-transmission-owning members to the extent it requires departing members to pay a
share of SPP’s long-term debts. Accordingly, we decline to direct SPP to further revise
its proposal as requested by SPP Generation Market Participants.
30 Proposed section 4.3.2(a) of SPP’s Membership Agreement provides that a non-
transmission-owning member’s withdrawal obligations are limited to those defined in
sections 4.3.2(b)(i)-(iii), and none of those provisions contain a requirement to pay a
share of SPP’s long-term financial obligations. Additionally, proposed section
4.3.2(b)(iv), which contains the requirement to pay a share of SPP’s long-term financial
obligations, applies only to transmission owners. Similarly, proposed section 8.7.2 of
SPP’s Bylaws, which describes the calculation of a member’s share of SPP’s long-term
financial obligations, explicitly applies to transmission owners only.
31 We also note that the Membership Agreement provides that partial termination
events, as contemplated in proposed section 4.3.2(c), only apply to transmission-owning
members. SPP, Governing Documents Tariff, Membership Agreement, § 4.1 (1.0.0):
A ‘Partial Termination’ occurs upon a Member’s voluntary
removal of a portion of its transmission facilities or customers
from the SPP Region, including, by way of example and not
limitation, sale of a part of the Member’s distribution or
transmission network or transfer to another service provider
of a portion of its retail load.
20200716-3028 FERC PDF (Unofficial) 07/16/2020
Page 47 of 58
Docket No. ER19-2522-002 - 9 -
The Commission orders:
SPP’s compliance filing is hereby accepted, effective December 19, 2019, as
discussed in the body of this order.
By the Commission.
( S E A L )
Nathaniel J. Davis, Sr.,
Deputy Secretary.
20200716-3028 FERC PDF (Unofficial) 07/16/2020
Page 48 of 58
Document Content(s)
ER19-2522-002.DOCX....................................................1-9
20200716-3028 FERC PDF (Unofficial) 07/16/2020
Page 49 of 58
2019 SPP Board of Directors Evaluation MEMBERS
2. The board has a full and common understanding of the roles and responsibilities of a board.
Strongly Disagree Disagree Neutral Agree Strongly Agree
4. The organization structure is clear (board, officers, committees, executive, and staff).
Strongly Disagree Disagree Neutral Agree Strongly Agree
6. The board attends to policy-related decisions that effectively guide operational activities of staff.
Strongly Disagree Disagree Neutral Agree Strongly Agree
8. The board effectively represents the organization to the stakeholder community.
Strongly Disagree Disagree Neutral Agree Strongly Agree
10. The board regularly monitors and evaluates progress toward strategic goals and objectives.
Strongly Disagree Disagree Neutral Agree Strongly Agree
12. Each member of the board is involved and interested in the board's work.
Strongly Disagree Disagree Neutral Agree Strongly Agree
13. The board considers the diverse positions of the membership in a non-discriminatory manner.
Strongly Disagree Disagree Neutral Agree Strongly Agree
11. The board regularly evaluates and provides development plans for the chief executive officer.
Strongly Disagree Disagree Neutral Agree Strongly Agree
9. Board meetings facilitate focus and progress on important organizational matters.
Strongly Disagree Disagree Neutral Agree Strongly Agree
7. The board receives regular reports on finances/budgets, performance, and other important matters.
Strongly Disagree Disagree Neutral Agree Strongly Agree
5. The board has clear goals and actions resulting from relevant and realistic strategic planning.
Strongly Disagree Disagree Neutral Agree Strongly Agree
3. Board members understand the organization's mission and services.
Strongly Disagree Disagree Neutral Agree Strongly Agree
Member
Board Member
1. I am a:
14. Please list three to five points on which the Board of Directors should focus attention in 2019. Please be as specific as possible in identifying these points.
Page 50 of 58
2020 Annual Survey Schedule Survey Schedule
i. Organizational Effectiveness (Org Group) Surveys • Launch Date: Monday, September 28 • Close Date: Friday, October 9
ii. Stakeholder Satisfaction Survey • Launch Date: Monday, September 28 • Close Date: Friday, October 30
iii. Board Effectiveness Survey • Launch Date: Monday, October 12 • Close Date: Friday, October 30
iv. Membership/Staff Performance Survey (for HR Committee) • Launch Date: Monday, November 30 • Close Date: Friday, December 11
Page 51 of 58
SPP Organizational Group Self-Assessment
(August 2019 – July 2020)
GROUP NAME: Corporate Governance Committee (CGC)
THE SCOPE HAS BEEN REVIEWED IN THE PAST YEAR: Yes
MEMBER ROSTER/ATTENDANCE:
Member Company Sector # Present # Absent
*Brown, Nick (C) Director Southwest Power Pool 5/5 0
*Sugg, Barbara © Director Southwest Power Pool 1/1 0
Altenbaumer, Larry Director - 5 1
Buffington, Denise Kansas City Power & Light
Company
Investor-Owned Utility
(TO) 6 0
Fortik, Jason Lincoln Electric System Municipal (TU) 6 0
*Gaw, Steve Advanced Power Alliance Alternate Power/Public
Interest (TU) 1/1 0
Janssen, Rob Dogwood Independent Power
Producer (TU) 5
1
1 Proxy
Leopold, Brett ITC Great Plains Independent Transmission
Company (TU) 6 0
McClure, John Nebraska Public Power
District State Agency (TO) 6 0
Smith, Holly Rachel Walmart, Inc. Large Retail Customer
(TU) 4
2
1 Proxy
Sundsted, Jodi Western Area Power
Administration - UGPR Federal Agency (TO) 6 0
Wise, Mike Golden Spread Cooperative (TU) 6 0
Suskie, Paul Staff Secretary Southwest Power Pool 6 0
*Only on Committee for part of the assessment period.
List the number of members represented in the following areas:
Transmission/Owners Transmission/Users Director(s)
3 6 2
Sectors Investor
Owned
Utility
Cooperative
Municipal
State
Federal
Independent
Power
Producer/
Marketer
Independent
Transmission
Company
Alt
Power/
Public
Interest
Large
Retail
Small
Retail
1 1 1 1 1 1 1 1 1
Page 52 of 58
AVERAGE OVERALL ATTENDANCE (INCLUDING NON-GROUP MEMBERS): 23
MEETINGS HELD TO DATE: Live: 3 Teleconference: 3
AVERAGE LENGTH OF MEETINGS: 4:23
NUMBER OF VOTES TAKEN: 17
MEETING COST(S): $5896.86
- Meeting costs include hotel expenses (room rental, A/V, food and beverage), estimate of
teleconference expenses, and Director fees for attendance.
MAJOR ACCOMPLISHMENTS/ISSUES ADDRESSED BY THE GROUP:
1. Completed clean-up of the SPP Bylaws. FERC approved clean-up.
2. Completed work on Exit fee complaint. FERC accepted compliance filing.
3. Decided to assess membership changes (if any) in light of exit fee changes. Upon assessment, to
evaluate whether any membership changes (voting/representation, etc.) are needed.
MAJOR ISSUES PENDING BEFORE THE GROUP:
1. New Board member vacancy.
2. Clarification on withdrawing member sections of governing documents.
Page 53 of 58
Southwest Power Pool, Inc. CORPORATE GOVERNANCE COMMITTEE
Organizational Group Scope Statement
April 28, 2020
Purpose The Corporate Governance Committee is responsible for the overall governance structure, including nominations, for the company in accordance with its scope as approved by the Board of Directors.
Scope of Activities
a) Seek input from the Board of Directors and/or the Members Committee as to the skills needed to fill any vacancy under consideration;
b) In the event of a vacancy or the replacement of an existing director, the CGC
will use an independent executive search firm, unless otherwise agreed by the CGC, to provide candidates for consideration to the Membership for election to the Board of Directors;
c) In the event of a vacancy or the replacement of an existing Members
Committee representative, provide candidates for consideration to the Membership for election to the Members Committee;
d) Fill vacancies for Organizational Groups in accordance with the Bylaws;
e) Monitor the composition of the Board of Directors to ensure balance,
independence, maintenance of qualifications under any applicable laws, avoidance of conflicts of interest, and periodic review of the criteria for independence set out in the Bylaws and appropriate regulatory bodies, recommending changes, as appropriate;
f) Recommend to the Board of Directors the appointment of Organizational
Group representatives and leadership except for the Corporate Governance Committee, whose representatives are elected by Members in each category; the Members Committee, whose representatives are elected by the Membership, and the Markets and Operations Policy Committee, whose representatives are appointed by the Members;
Page 54 of 58
g) Develop criteria governing the overall composition of the Board of Directors for recommendation to the Membership;
h) Coordinate an annual review and assessment of the effectiveness of the Board
of Directors, its structure, and process;
i) Review annually the structure of the Organizational Groups, and together with
the Organizational Group Chairs, the charters of each Organizational Group, and recommend changes to the Board of Directors, as appropriate;
j) Review the self-assessments of the Organizational Groups to assure that they
are being done on a consistent basis;
k) Develop recommendations for the Board of Directors regarding a Chair/Vice
Chair succession policy;
l) Recommend compensation levels for the Board of Directors to the Membership;
m) Complete a self-assessment annually to determine how effectively the CGC is
meeting its responsibilities
n) Have on-boarding training and education for new CGC members; and
o) Perform such other functions as the Board of Directors may delegate or direct.
Representation To the extent that the membership allows, the CGC shall be comprised of eleven members. One representative shall be the President of SPP who will serve as the Chair; one representative shall be the Chairman of the Board, unless his/her position is under consideration, in which case the Vice Chairman of the Board; one representative shall be representative of and selected by investor owned utilities Members; one representative shall be representative of and selected by co-operatives Members; one representative shall be representative of and selected by municipals Members; one representative shall be representative of and selected by independent power producers/marketers Members; one representative shall be representative of and
Page 55 of 58
selected by state power agencies Members; one representative shall be representative of and selected by alternative power/public interest Members; one representative shall be from an independent transmission company Member, defined as having assets under the OATT and no Affiliate Relationships in other categories of Membership; one representative shall be representative of and selected by large/small retail Members; and one representative shall be representative of and selected by a Federal Power Marketing Agency Member(s).
Reporting The Corporate Governance Committee reports directly to the Board of Directors.
Page 56 of 58
Day 8:00 AM 9:00 AM 10:00 AM 11:00 AM 1:00 PM 3:00 PM
Tuesday
Thursday
Day 8:00 AM 9:00 AM 10:00 AM 11:00 AM 1:00 PM 3:00 PM
Sunday
Tuesday
Day 8:00 AM 9:00 AM 10:00 AM 11:00 AM 1:00 PM 3:00 PM
Tuesday
Thursday
Day 8:00 AM 9:00 AM 10:00 AM 11:00 AM 1:00 PM 3:00 PM
Sunday
MondayFC
HRC
OCWednesday
CGC (board nominations))
FC
MOPC
WednesdayMOPC SPC Bus. Mtg
OCSPC Strat Session
April-2021
6:00 p.m. - BOD Dinner w/ Officers
5:30 p.m. - BOD/RSC Reception/Dinner
5:30 p.m. - BOD Debrief/DinnerBOD/MC Exec Session Board Debrief
Monday
April-20215:30 p.m. - BOD/RSC Reception/Dinner
5:30 p.m. - BOD Debrief/DinnerTuesday
January-2021
January-2021
12 n
12 n
12 n
12 n
BOD/MC Exec Session
COMMITTEE WEEK - APRIL 12 - 16, 2021 - VIRTUAL MEETINGS2:00 PM 4:00 PM
6:00 p.m. - BOD Dinner w/ RSC
MondayRSC Education
BOD/MC Business Meeting
CGC (as needed)
HRCMonday
COMMITTEE WEEK - JANUARY 11 - 15, 2021 - IN LITTLE ROCK2:00 PM
BOD/MC Business Meeting
SPC Strat Session
Joint Presentations
4:00 PM
4:00 PM
RSC Business MtgExec
Session
RSC/BOD/MC WEEK - JANUARY 25 - 26, 2021 - IN LITTLE ROCK
RSC EducationBOD/MC Development
2:00 PM
MOPC MOPC SPC Bus. Mtg
Joint Presentations
RSC Business MtgExec
SessionBOD/MC Development
RSC/BOD/MC WEEK - APRIL 26 - 27, 2021 - IN LITTLE ROCK2:00 PM 4:00 PM
Page 57 of 58
Day 8:00 AM 9:00 AM 10:00 AM 11:00 AM 1:00 PM 3:00 PM
Tuesday
Thursday
Day 8:00 AM 9:00 AM 10:00 AM 11:00 AM 1:00 PM 3:00 PM
Tuesday
Day 8:00 AM 9:00 AM 10:00 AM 11:00 AM 1:00 PM 3:00 PM
MondayTuesday
Thursday
Day 8:00 AM 9:00 AM 10:00 AM 11:00 AM 1:00 PM 3:00 PM
Sunday
SPC Strat Session CGC (Committee nominations)
HRCMOPC
WednesdayMOPC SPC Bus. Mtg
OC
FC*HRC
MOPC
WednesdayMOPC SPC Bus. Mtg
OC
RSC/BOD/MC WEEK - JULY 26 - 27, 2021 - VIRTUAL MEETINGS
BOD/MC Exec Session Board Debrief
BOD/MC Exec Session
Joint Presentations
RSC Business MtgExec
Session
BOD/MC Business Meeting
SPC Strat Session CGC (As needed)* FC Meeting to be held face-to-face in October, but not in conflict with other SPP meetings
July-2021
* Joint FC/SPC session to review Operating Plan to be held in August, via Webex* FC may opt to meet virtually in July since October meeting is to be held in person
BOD/MC DevelopmentRSC Education Joint
PresentationsRSC Business Mtg
ExecSession
12 n
12 n
12 n 2:00 PM 4:00 PM
COMMITTEE WEEK - OCTOBER 11 - 15, 2021 - VIRTUAL MEETINGS2:00 PM 4:00 PM
October-2021
October-2021
COMMITTEE WEEK - JULY 12 - 15, 2021 - IN OKLAHOMA CITY2:00 PM 4:00 PM
Monday
July-2021
Monday
December Board and OC meetings to be held virtuallyconsistent with past years
SEPTEMBER DATED TBD - Strategic Planning RetreatIncludes Board, Officers, SPC, and MC, plus RSC president
12 n
BOD/MC Development5:30 p.m. - BOD/RSC Reception/Dinner
TuesdayBOD/MC Business Meeting
5:30 p.m. - BOD Debrief/Dinner
RSC/BOD/MC WEEK - OCTOBER 25 - 26, 2021 - IN LITTLE ROCK2:00 PM 4:00 PM
6:00 p.m. - BOD Dinner w/ Members Committee
MondayRSC Education
Page 58 of 58