UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION. ) Southwest Power Pool, Inc. ) Docket No. ER )

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1 UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION ) Southwest Power Pool, Inc. ) Docket No. ER ) MOTION FOR LEAVE TO ANSWER AND ANSWER OF SOUTHWEST POWER POOL, INC. Pursuant to Rule 213 of the Federal Energy Regulatory Commission s ( Commission ) Rules of Practice and Procedure, 18 C.F.R , Southwest Power Pool, Inc. ( SPP ) submits this Answer to the Motion to Intervene and Comments of Manitoba Hydro ( Manitoba ) 1 filed in response to SPP s January 8, filing in this proceeding. SPP has discussed directly with Manitoba the issues raised in the Manitoba Comments, and offers this Answer with the intent to address Manitoba s concerns and aid the Commission in its decision making process. 1 2 Motion to Intervene and Comments of Manitoba Hydro, Docket No. ER (January 29, 2016). See Manitoba Comments at 1. Manitoba is a Canadian Crown corporation created pursuant to The Manitoba Hydro Act, R.S.M. 1987, c. H-190, and engages in the generation, transmission and distribution of electricity to customers in the Province of Manitoba, Canada and also engages in the sale of electrical capacity and energy to wholesale customers in the United States ( U.S. ). Submission of Tariff Revisions to Clarify the Point of Sale for Market Transactions between the U.S. and Canada of Southwest Power Pool, Inc., Docket No. ER (January 8, 2016) ( January 8 Filing ).

2 I. MOTION FOR LEAVE TO ANSWER SPP respectfully requests leave to answer the Manitoba Comments filed in this proceeding to aid the Commission s decision-making process. 3 The Commission permits answers to protests for good cause shown, and the Commission has held that answers are permitted when they ensure a more accurate and complete record or provide useful and relevant information that will assist the Commission in its deliberative process by correcting errors and clarifying the issues. 4 Here, the Commission should accept SPP s answer because it provides useful and relevant information that will help the Commission s review of the January 8 Filing. II. BACKGROUND On January 8, 2016, SPP proposed new language to its Open Access Transmission Tariff 5 to stipulate the point-of-sale for market transaction between SPP and a Canadian entity to be at the border between the U.S. and Canada. Such recognition of the point-of-sale for market transitions is being proposed consistent with the vernacular utilized in the Tariff that employs the concept of point-of-delivery and point SPP s silence on other conclusions or statements contained in the Manitoba Comment should not be considered SPP s agreement or acquiescence to those conclusions or statements. 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 decisionmaking 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). Southwest Power Pool, Inc., Open Access Transmission Tariff, Sixth Revised Volume No. 1 ( Tariff ). 2

3 of-receipt for energy transaction as the point where energy is delivered by the market to sale to a receiving entity. Under the Tariff and the SPP market protocols, a schedule is the evidence of a sale for purposes of settlement. Under Attachment AE of the Tariff, 6 three schedule types may be impacted by a market transaction involving SPP and a Canadian entity as the Market Participant: an Export Interchange Transaction, 7 an Import Interchange Transaction, 8 and a Through Interchange Transaction. 9 Additionally, SPP s stakeholders specifically required the Tariff revisions to stipulate that the point-of-delivery for market transactions must be located at an interconnection between a transmission facility under the functional control of SPP and a transmission facility operated by a Canadian transmission service provider (i.e., at an interconnection between an SPP transmission facility and the Canadian Entities transmission facility). 10 As stated in the January 8 Filing, the legal recognition of the Attachment AE of the Tariff contains the terms and conditions of the Integrated Marketplace. Tariff at Attachment AE, Section 1.1 Definitions E. Export Interchange Transaction is defined as [a] Market Participant schedule for exporting Energy out of the SPP Balancing Authority Area. Tariff at Attachment AE, Section 1.1 Definitions I. Import Interchange Transaction is defined as [a] schedule for importing Energy into the SPP Balancing Authority Area. Tariff at Attachment AE, Section 1.1 Definitions T. Through Interchange Transaction is defined as [a] Market Participant schedule submitted between two External Interfaces for use in the Day-Ahead Market or Real-Time Balancing Market for moving Energy through the SPP Balancing Authority Area. See January 8 Filing at Proposed Tariff. 3

4 U.S./Canadian border as the point of sale for the impacted market transaction types will allow Canadian entities to participate in the Integrated Marketplace. 11 Manitoba intervened and filed the Manitoba Comments on January 29, While stating support for the January 8 Filing, Manitoba expressed concerns that the proposed Tariff language in the January 8 Filing could inadvertently be interpreted to exclude assets that would not register as a Resource in the Integrated Marketplace; but would rather be an import of a Non-Resource Offer. Manitoba suggests the ambiguity could be resolved by exchanging the word Resource with source in two sections of SPP s proposed Tariff sheets: Sections 4.2.2(2) and 4.4(3) of Attachment AE of the Tariff. 12 With these two minor modifications, Manitoba requests the Commission accept the January 8 Filing. 13 III. ANSWER As stated in the background section above, the Manitoba Comments suggest that the proposed Tariff language contained in the January 8 Filing could be revised to avoid any unintended consequences that might exclude from the market a Canadian entity that cannot pseudo-tie its assets into the SPP Balancing Authority Area. Specifically, with regards to Import Interchange Transactions and Through Interchange Transactions, Manitoba suggests that the term Resource should be simplified to source to recognize generation assets that are located in Canada and which will not register in the Integrated Marketplace. SPP has reviewed Manitoba s suggested approach and believes such a January 8 Filing at 4. Manitoba Comments at 3-4. Manitoba Comments at 6. 4

5 change would not undermine SPP s stated intent of the January 8 Filing, i.e., to provide Tariff language that stipulates the U.S./Canadian border as the point of sale for market transactions. SPP has spoken directly with Manitoba regarding its concerns, and understands that each Canadian utility is subject to its own provincial requirements when applying to transact with entities in the U.S. SPP would prefer that all external entities wishing to become a Market Participant would transact in the Integrated Marketplace by registering its assets as Resources or load; however, SPP recognizes that to do so would require external entities to pseudo-tie such assets into the SPP Balancing Authority, which may be an unavailable option due to the external entity s provincial regulations governing the external entity s participation in foreign markets. SPP developed the proposed Tariff language at issue in the Manitoba Comments through its stakeholder process in an open and transparent manner; and SPP filed the proposed language in good faith and with no intent to limit any entity s ability to participate in the Integrated Marketplace. Any entity, including Canadian utilities and power marketing groups, could have participated in SPP s process when developing the language. SPP prefers to address issues like those raised in the Manitoba Comments prior to a formal Federal Power Act Section 205 filing to place the proposal before the Commission. With regards to the term Resources at issue in the Manitoba Comments, SPP is of the opinion that the term Resources, as used in the proposed Tariff sheets, could be viewed as a subset of the generalized term source; and utilizing source in the identified Sections 4.2.2(2) and 4.4(3) of Attachment AE of the Tariff would not limit SPP s ability to administer the external transactions of non-pseudo-tied resources via 5

6 interchange schedules. As such, SPP would not oppose a Commission determination that the term source is a viable replacement for the term Resource; and SPP is willing to exchange the term Resource with source (in the manner requested by Manitoba) on compliance should the Commission so order. IV. CONCLUSION For the reasons set forth above, SPP requests the Commission accept this Answer for the record, consider SPP s comments herein in its decision making process, and accept the January 8 Filing as just and reasonable, subject to a compliance requirement should the Commission so order. February 16, 2016 Respectfully submitted, /s/ Matthew Harward Matthew Harward Southwest Power Pool, Inc. 201 Worthen Drive Little Rock, AR Telephone: (501) mharward@spp.org Attorney for Southwest Power Pool, Inc. 6

7 CERTIFICATE OF SERVICE I hereby certify that I have this day served the foregoing document upon each person designated on the official service list compiled by the Secretary in this proceeding. Dated this 16 h day of February, /s/ Michelle Harris Michelle Harris