[00:00:00] Speaker ?: Case number 18, act 1166, Missouri River Energy Services Petitioner versus Federal Energy Regulatory Commission. [00:00:08] Speaker 00: Mr. Anger for the petitioner, Mr. Fish for the respondent, and Mr. Booth for the respondent interveners. [00:00:17] Speaker 03: Good morning. [00:00:18] Speaker 03: May it please the court, I'm Lawrence Acker. [00:00:21] Speaker 03: I'm accompanied by my colleague, Philip Limone. [00:00:24] Speaker 03: While there are disputed legal issues in this case, and as hard as it may be to believe, the facts are relatively straightforward. [00:00:35] Speaker 03: And if you'll bear with me a moment, I can explain them in relatively simple form. [00:00:42] Speaker 04: If you have access... I think that's the funniest thing I've heard. [00:00:45] Speaker 03: I can understand that, Your Honor. [00:00:50] Speaker 03: And that's why I thought I'd take a moment at the outset to try and clear some of the underbrush away. [00:00:57] Speaker 03: But if you have access to the joint exhibit, page 363, it's a map that depicts the facilities that are involved in this controversy. [00:01:11] Speaker 03: Missouri River and Lincoln Electric have access to generation [00:01:17] Speaker 03: in the Missouri Basin Power Project, which is located on the green segment of the map. [00:01:25] Speaker 03: For more than 30 years, Missouri River received transmission service on facilities that are shown east of there in the red segment of the map under a 1977 contract now known as Agreement 496. [00:01:42] Speaker 03: From there to the delivery point at Grand Island, the red facilities that are owned by Nebraska Public Power connect to facilities owned by the Western Area Power Administration that proceed north through the states of – through the Upper Great Plains, through North Dakota, South Dakota, [00:02:09] Speaker 03: Minnesota and Iowa to deliver power to, among other things, the 33 communities that are served by Missouri River. [00:02:21] Speaker 03: In 2014, the Western area told Missouri River that it would terminate transmission service under its own tariff when it became a member of the Southwest Power Pool. [00:02:39] Speaker 03: And in 2015, the Federal Energy Regulatory Commission allowed [00:02:46] Speaker 03: the Western area to join the Southwest Power Pool, which then placed the delivery point – the point of interconnection between Missouri River and the Western Area Administration in the Southwest Power Pool footprint. [00:03:05] Speaker 03: The core dispute in this case pertains to whether Missouri River should end up paying on the transmission service. [00:03:12] Speaker 03: that it receives on the red portion of the line between the green area and the blue area, congestion charges as well as marginal loss charges. [00:03:29] Speaker 03: Article 10 of agreement 496 had provisions for losses and it provided for congestion management. [00:03:40] Speaker 03: in Articles 7 and Article 12. [00:03:44] Speaker 03: Those can be seen in the Joint Appendix at pages 308 and 314. [00:03:53] Speaker 03: Much of FERC's decision, its brief, its conclusions, was whether the Missouri River was able to evaluate its costs before joining the pool. [00:04:08] Speaker 03: We use that term also in our briefs. [00:04:10] Speaker 03: FERC uses it in its decision, it's prominent in the FERC's briefs, and it appears on the Power Pools website to encompass both ownership of becoming a transmission owner as well as becoming a transmission customer. [00:04:29] Speaker 03: As it happens, being a transmission owner has no particular bearing on being a transmission customer. [00:04:38] Speaker 03: As the pool and Nebraska Power pointed out in its brief, notwithstanding some criticism that I leveled at them about that. [00:04:50] Speaker 03: All that said, the legal questions then flow from that situation because [00:04:56] Speaker 03: When Missouri River became a transmission customer being served by the power pool, it was now being charged marginal losses and congestion charges, and our belief [00:05:13] Speaker 03: Missouri River's belief, is that they should have been exempt because they were covered by the same contract that covered Lincoln Electric service. [00:05:22] Speaker 03: Lincoln Electric has generation in the same green area and use the same Nebraska power pool transmission facilities proceeding from the generation area [00:05:36] Speaker 03: up to the Western Area Power Administration and then continuing past that. [00:05:40] Speaker 03: They had become members of the pool some time ago. [00:05:45] Speaker 02: So the commission says that there's a meaningful distinction between you and Lincoln Electric because Lincoln Electric was part of the pool [00:05:54] Speaker 02: before the charges came into effect, whereas you weren't? [00:05:57] Speaker 02: Correct. [00:05:58] Speaker 02: What's wrong with that? [00:05:59] Speaker 02: Why isn't that a meaningful distinction? [00:06:00] Speaker 03: It's wrong because what they said is that Lincoln Electric faced no government compulsion. [00:06:06] Speaker 03: They faced government compulsion when they were already a member, now the tariff changed and they were stuck with these costs. [00:06:14] Speaker 03: So the commission exempted them. [00:06:16] Speaker 03: We were outside the pool, and the commission approved the expansion of the power pool so that it encompassed the communities that we served, and particularly the interconnection between Nebraska Power's facilities and the Western Area Power Pool. [00:06:34] Speaker 03: We also had no choice but to take transmission service. [00:06:38] Speaker 02: And in fact... You had a legal choice. [00:06:42] Speaker 02: We did not. [00:06:43] Speaker 02: You might have been practically [00:06:46] Speaker 02: economically disadvantageous not to sign up, but you had at least a legal choice whether to sign up. [00:06:54] Speaker 03: It's at best a theoretical legal choice. [00:06:56] Speaker 03: We would have had to replicate some 9,500 miles of Western Area Power Administration's transmission facilities in order to remain independent of the power pool. [00:07:09] Speaker 03: In fact, the parties stipulated [00:07:12] Speaker 03: in the joint and their stipulation effect that Missouri River had no choice. [00:07:20] Speaker 03: They were required to take the service that appears in stipulation number 31. [00:07:25] Speaker 03: So while in theory we could have turned it down, in real life we could not. [00:07:31] Speaker 04: Council, what is our scope of review on this case? [00:07:37] Speaker 03: It's whether FERC's orders withstand an evaluation under the arbitrary capricious standard and whether they're supported by substantial evidence. [00:07:47] Speaker 04: So that just – well, is your argument an evidentiary argument or is it an arbitrary – is it a policy argument? [00:07:54] Speaker 03: No, it's an arbitrary capricious argument. [00:07:55] Speaker 03: The facts are not in dispute. [00:07:57] Speaker 03: All the facts appear in stipulation. [00:08:00] Speaker 04: It's just that as you observe, they're a little bit complicated and I need it to simplify. [00:08:15] Speaker 03: In particular, there were two things, there were two choices that the Commission had to make, whether to conduct a mobile Sierra evaluation. [00:08:27] Speaker 03: They said they didn't even touch it in their orders below. [00:08:31] Speaker 03: On the brief, they say, and the pool says, [00:08:36] Speaker 03: Well, they didn't have to because you're a non-jurisdiction customer. [00:08:41] Speaker 03: Of course, that's not the Mobile Sierra standard, and the FERC says that we're now taking new services. [00:08:49] Speaker 03: But we're taking the same services that we previously took under the Agreement 496. [00:08:56] Speaker 03: And there were provisions in that agreement that provided for how costs would be recovered and charges would be managed and congestion would be managed. [00:09:04] Speaker 03: And FERC never conducted the Mobile Sierra analysis that this court approved in Wisconsin Power. [00:09:13] Speaker 03: The other thing, I mean, they just never did it. [00:09:15] Speaker 03: The other thing is when they concluded that the tariff was ambiguous. [00:09:21] Speaker 03: We don't think it's ambiguous, but grant them that it's ambiguous. [00:09:25] Speaker 03: Now they did not use contraprofarentum as an interpretive method, they used extrinsic evidence as an interpretive method. [00:09:34] Speaker 03: They're both perfectly fine methods. [00:09:36] Speaker 03: I'm not quibbling about whether there's value in either of them. [00:09:39] Speaker 03: But when the commission chooses between two methods that they've used before, they need to explain how they made that selection. [00:09:48] Speaker 03: And they did. [00:09:49] Speaker 03: They just said, we really like extrinsic evidence. [00:09:53] Speaker 03: That's the one we're going to use. [00:09:54] Speaker 03: And that's the defense that was mounted in the commission's brief to this court as well. [00:10:00] Speaker 03: There's no explanation of the choice. [00:10:03] Speaker 03: So that's why we think those are the two most salient aspects of the arbitrary compression standard. [00:10:10] Speaker 03: And then, you know, there are others where they concluded that we are not similar to Lincoln Electric. [00:10:17] Speaker 03: because of the timing of the decision to enter the pool and the fact that we did not face government compulsion. [00:10:27] Speaker 03: Our view is that we faced every bit as much government compulsion as Lincoln Electric did. [00:10:32] Speaker 03: Lincoln Electric was already there when the tariff changed. [00:10:36] Speaker 03: We weren't interested in joining the pool. [00:10:38] Speaker 03: The pool, in essence, joined us. [00:10:40] Speaker 05: You had become a customer and not a member? [00:10:43] Speaker 05: I'm sorry? [00:10:44] Speaker 05: Could you have become a customer and not a member? [00:10:46] Speaker 03: We could have. [00:10:47] Speaker 05: We made a choice to become a member. [00:10:49] Speaker 05: And then you wouldn't have had to pay the charges. [00:10:51] Speaker 03: No, that's not correct. [00:10:52] Speaker 03: We would have been subject to the charges because they are charges on transmission service, not on membership. [00:10:59] Speaker 03: So membership is not a relevant factor. [00:11:13] Speaker 03: The Commission also said that we misplaced our reliance on statements that the pool made [00:11:26] Speaker 03: early on in 2012, 2013. [00:11:28] Speaker 03: Our view is that whatever alliance we placed on it, the facts had changed by the time the Commission got to make the decision that affected us. [00:11:41] Speaker 03: And the Commission knew that we were put into the pool. [00:11:44] Speaker 03: They had a stipulation that said we were required to take service, that it was necessary for us to take service from the pool. [00:11:54] Speaker 03: I don't understand the Commission's logic, but that's their logic. [00:12:00] Speaker 03: If the Court doesn't have any other questions, that's about what I intended to say, and I'll reserve it for the rest of my time. [00:12:08] Speaker 03: Thank you for your consideration. [00:12:09] Speaker 05: All right, we'll hear from the Commission's logic now. [00:12:30] Speaker 00: Good morning, Your Honors, and may it please the Court, Jared Fish, for the Commission. [00:12:33] Speaker 00: I will be dividing my time with interveners responding. [00:12:37] Speaker 00: I disagree with opposing counsel that the facts are relatively straightforward. [00:12:41] Speaker 00: I think the facts are a bit complicated, but the legal issues are indeed relatively straightforward. [00:12:46] Speaker 00: Here, the Commission reasonably drew a line between existing members of the Southwest Power Pool at the time congestion and marginal loss charges were assessed, members of the pool, [00:12:57] Speaker 00: and prospective nonmembers like Missouri River that joined the power pole after those charges were assessed. [00:13:05] Speaker 00: That distinction is rooted in several factors. [00:13:07] Speaker 00: First, it is rooted in the commission's own precedent in the dairy land orders. [00:13:12] Speaker 00: It is rooted in the express terms of the 2013 carve-out settlement and implementing tariff revisions related to this proceeding that expressly reject carve-out treatment for Missouri River. [00:13:23] Speaker 00: It is rooted in equitable considerations that Missouri River pay its fair share of costs of administering the Southwest Power Pool Transmission Service. [00:13:34] Speaker 00: And it is also consistent with the Commission's longstanding policy of reducing carve-outs over time in favor of uniform grid administration under regional transmission organizations like the Southwest Power Pool. [00:13:48] Speaker 00: I'd like to pick up on... Incidentally, how much money is at stake? [00:13:51] Speaker 00: I'm not sure, Your Honor. [00:13:54] Speaker 00: I'm not sure how much money is at stake. [00:13:56] Speaker 00: We are talking about congestion and marginal loss charges on this. [00:14:01] Speaker 04: Yes, I know, but I was just wondering how much was involved. [00:14:04] Speaker 00: I'm not sure, Your Honor. [00:14:06] Speaker 00: I don't know. [00:14:07] Speaker 00: Judge Srinivasan, I'd like to pick up on your question getting at whether there was a choice or not for [00:14:14] Speaker 00: Missouri River to pay these charges and take Southwest Powerful Transmission Service. [00:14:19] Speaker 00: The commission made very clear in the rehearing order, paragraphs 48 through 50, that the operative legal distinction is not about whether there is some choice in vacuo. [00:14:31] Speaker 00: It matters who is doing, who is compelling the entity to pay those charges. [00:14:36] Speaker 00: And in Dairyland, the commission stated that it is – the distinction is based on the fact that original transmission owners that joined a newly formed regional transmission organization were subject to new market rules that were effectively foisted upon them by the regional transmission organization. [00:15:01] Speaker 00: And that separated those entities from prospective nonmembers of that organization that joined later. [00:15:08] Speaker 00: It matters who is forcing them to make that choice, the regional transmission organization or other entities. [00:15:17] Speaker 00: When the Commission makes this clear in Rehearing Order of Paragraph 50, any compulsion on Missouri River to take transmission service was by its business partners to the 1977 contract, Heartland Basin Electric Western Upper Great Plains Region. [00:15:33] Speaker 00: It had nothing to do with the Southwest Power Pool. [00:15:37] Speaker 00: And think of it another way, there's a difference, a reasonable distinction between a regional transmission organization telling its members [00:15:45] Speaker 00: We're now going to implement tariff changes that are going to force you to pay charges that you did not contemplate when you joined the organization. [00:15:54] Speaker 00: And an outside party coming in after those tariff changes are in effect saying, we're going to join you, but we're going to have a veto over the rules that you apply to us. [00:16:06] Speaker 00: That's effectively what Missouri River is attempting to do here. [00:16:10] Speaker 00: And that also makes equitable sense. [00:16:12] Speaker 00: If this court were to mandate that the commission reverse its policy, Missouri River would be the only entity of its kind that joins the Southwest Power Pool after these charges took effect under the integrated marketplace that would receive this exemption. [00:16:28] Speaker 00: And there are costs to that decision. [00:16:30] Speaker 00: That would mean that other entities in the pool that similarly benefit from Southwest Pool Transmission Service would have to absorb those additional costs of operating the system. [00:16:42] Speaker 00: And that is a distinction that this court has recognized in its 2007 decision, East Kentucky Power, and also its 2004 decision in Midwest ISO. [00:16:54] Speaker 00: And there the court recognized that [00:16:59] Speaker 00: that when a party, even a party to a grandfather agreement that continues to pay a rate under that grandfather agreement, benefits from a new service that includes benefits beyond the limited mandate of those grandfather agreements, [00:17:16] Speaker 00: then there is no entitlement to a carve-out. [00:17:20] Speaker 00: The benefit is from having an expanded network, as Missouri River now enjoys. [00:17:26] Speaker 00: It is now part of a much larger transmission organization than it was prior to integration in 2015. [00:17:33] Speaker 00: And this court, just two years ago in its decision in State Corporation of Kansas, recognized those benefits. [00:17:41] Speaker 00: Increased reliability, enhanced efficiency, and cost savings of $334 million over 10 years for all those members of the pool who take transmission service, as Missouri River does. [00:17:54] Speaker 00: That finding maps directly onto the findings in East Kentucky Power, where [00:18:03] Speaker 00: the court found, and I quote, benefits of enhanced reliability, increased efficiency, and more effective management of grid congestion. [00:18:13] Speaker 00: And it was those benefits that the court found as positive to determining that the cost that those parties to grandfather agreements were being charged were for a new service, and therefore there was no entitlement to a carve-out. [00:18:31] Speaker 00: Not only was there no entitlement to a carve-out, but there was no mobile Sierra problem. [00:18:36] Speaker 00: Now, first of all, to take a step back, really moving to whether the commission modified or abrogated the 1977 contract, the mobile Sierra standard only comes into play when we're talking about public utilities and jurisdictional contracts. [00:18:53] Speaker 00: Now, in our brief, we basically assume for purposes of argument that perhaps mobile CR would apply if it was aggregation or modification. [00:19:02] Speaker 00: In reality, as Missouri River correctly contends, this is a non-jurisdictional contract between non-public utilities. [00:19:11] Speaker 00: So really the only question is, was there any modification? [00:19:14] Speaker 00: Because the commission itself has said that we don't modify, we don't think we can modify, because we don't have jurisdiction, non-jurisdictional contracts. [00:19:24] Speaker 00: And there was no modification here. [00:19:25] Speaker 00: First of all, Missouri River has waived this argument because they do not articulate in their opening brief which part of the 1977 contract has actually been abrogated or modified. [00:19:37] Speaker 00: Second, East Kentucky River, there's no contract. [00:19:44] Speaker 00: That decision found there was no contract abrogation. [00:19:47] Speaker 00: where the payments were attributed to a new service that could not be provided under the limited mandate of the grandfather agreement. [00:19:56] Speaker 00: So there's simply no, and furthermore, Missouri River mentions, actually relies on this court's decision in Wisconsin public power, where the court affirmed the commission's decision to carve out certain grandfather agreements in the Midwest Operator Regional Transmission Organization. [00:20:16] Speaker 00: But there, that was a distinct situation where there was a direct clash between the scheduling terms under the grandfathered agreements and the scheduling terms under the revised tariff provisions in the Midwest operator. [00:20:29] Speaker 00: There was no way to accommodate both. [00:20:31] Speaker 00: One had to give. [00:20:32] Speaker 00: And therefore, the court found that because of this clash, this collision between the two provisions, a carve out was necessary. [00:20:41] Speaker 00: There is no clash here. [00:20:42] Speaker 00: In fact, Missouri River itself acknowledges that it is continuing to perform under the 1977 contract. [00:20:48] Speaker 00: It continues to pay the costs of infrastructure. [00:20:52] Speaker 05: I asked you to go back to the discrimination argument for a moment. [00:21:05] Speaker 05: Their argument is effectively they had no choice. [00:21:09] Speaker 05: Is that correct or not correct, economically effectively, not a question of compulsion? [00:21:15] Speaker 00: Once Western upper-grade – this is in the stipulated facts – once Western upper-grade plains region terminated integrated system service, then [00:21:24] Speaker 00: Yes, Missouri River needed to take service from the Southwest Power Pool because it was now integrated into the pool and everyone was taking Southwest Power Pool service. [00:21:34] Speaker 00: But the key here is [00:21:37] Speaker 00: We're talking about apples and oranges a bit. [00:21:40] Speaker 00: The 1977 contract is a contract for infrastructure upgrades. [00:21:45] Speaker 00: The rate that's paid on an annual basis is for maintenance and operating expenses. [00:21:50] Speaker 00: That was not a transmission service contract. [00:21:53] Speaker 00: Transmission service was provided to Missouri River by the integrated system. [00:21:58] Speaker 00: And that service was never grandfathered in under the Southwest Pool Tariff. [00:22:03] Speaker 00: So effectively, Missouri River is attempting to bootstrap a contract that is unrelated to transmission service as a way to get an exemption from congestion and marginal loss charges. [00:22:17] Speaker 00: Was that not done for Lincoln? [00:22:20] Speaker 00: Well, Lincoln was... It's the same contract, wasn't it? [00:22:24] Speaker 00: It was the same contract, Your Honor, but that was a negotiated settlement that was ultimately uncontested. [00:22:30] Speaker 00: And Missouri River could have contested that settlement. [00:22:34] Speaker 00: They were part of that proceeding, but they didn't. [00:22:37] Speaker 00: They had intervened and they didn't protest the settlement. [00:22:40] Speaker 00: So we don't actually know what went on behind closed doors to determine that Lincoln Electric would [00:22:45] Speaker 00: get an exemption, but the point at the end of the day is, is there a reasonable distinction that the commission made between Lincoln Electric and Missouri River, and its distinction between existing members of the – So you don't agree with the argument made by the intervener at pages 7 to 8 of its brief that they weren't compelled to join? [00:23:11] Speaker 00: Well, so there's a distinction between being compelled to join an organization and being compelled to take transmission service as a transmission customer. [00:23:26] Speaker 05: Because I asked that question, and they said that there was no difference. [00:23:31] Speaker 05: Is that correct or not correct? [00:23:33] Speaker 05: Well, there is a difference. [00:23:35] Speaker 05: Are customers subject to the same charges? [00:23:37] Speaker 05: Yes, they are, Your Honor. [00:23:38] Speaker 00: So there isn't any difference. [00:23:40] Speaker 00: There's no difference, well, there's a difference because they actually receive additional benefits from membership. [00:23:46] Speaker 00: They receive hedges against their congestion and marginal loss charges that allow them to defray those costs. [00:23:51] Speaker 00: So there's a reason why I don't, I can speculate on why they would want to be members, but at the end of the day, the choice issue doesn't come down to whether they had a choice to become a member or not, or choice to become a transmission customer or not. [00:24:04] Speaker 00: It is a question of whether they were existing member being compelled [00:24:07] Speaker 00: by the organization they were part of to accept new tariff changes that they did not bargain for when they joined our flip transmission service. [00:24:17] Speaker 04: You're talking about Lincoln? [00:24:20] Speaker 04: Right. [00:24:21] Speaker 04: You were talking about Lincoln in that sense? [00:24:23] Speaker 05: Correct. [00:24:24] Speaker 05: Okay, we'll hear from the intervener. [00:24:27] Speaker 05: Thank you, others. [00:24:36] Speaker 01: Good morning, Your Honor. [00:24:37] Speaker 01: It's William Booth from Michael Best on behalf of the pool. [00:24:43] Speaker 01: I won't belabor the application. [00:24:45] Speaker 05: Can you address yourself for the question I was asking, which does not seem to be the basis for a FERC's decision on non-discrimination? [00:24:52] Speaker 05: One more time, Your Honor. [00:24:53] Speaker 05: Which does not seem to be the – you have an argument at seven to eight that the – that the Missouri River wasn't compelled to join. [00:25:00] Speaker 01: Correct, Your Honor. [00:25:01] Speaker 01: It wasn't compelled by the Southwest Power Pool. [00:25:05] Speaker 05: It might have – it might have just – Yeah, no, I took the argument to be – and maybe I misread it – that they had choices, they didn't have to include memberships, they could have just been a customer. [00:25:17] Speaker 05: But I take it that that's not likely to make a difference, or is it? [00:25:22] Speaker 01: I think it is, Your Honor, the advantage to becoming a transmission owner. [00:25:25] Speaker 01: And just to be clear, when a transmission owner joins a pool – [00:25:30] Speaker 01: and it's putting its transmission facilities under the pool's control, if that transmission owner serves the load, that transmission also is a transmission customer, which is why throughout all of the briefs, including opposing counsel's brief, the focus is on transmission owners and transmission customers. [00:25:46] Speaker 01: So I'm not quite sure why we're making the distinction here now during the oral argument. [00:25:53] Speaker 01: There are many benefits to pooling service. [00:25:55] Speaker 01: I'm not making a distinction. [00:25:56] Speaker 01: It's only because I thought you made the distinction. [00:25:58] Speaker 04: I didn't understand that point at all. [00:26:01] Speaker 01: Posing counsel is distinguishing transmission ownership and transmission customership. [00:26:08] Speaker 04: Right. [00:26:10] Speaker 04: And although I got the impression that the membership would give you certain benefits, it would offset your cost as a customer. [00:26:21] Speaker 01: Transmission ownership gives you benefits. [00:26:23] Speaker 01: For example, Missouri River is able to recover its transmission revenue costs from other customers in Southwest Power Pole. [00:26:33] Speaker 01: Missouri River is able to rely on generators that it doesn't own or have under contract. [00:26:38] Speaker 01: If its generator goes out of service, there's a multitude of other generators available. [00:26:42] Speaker 04: What about the question I asked Council? [00:26:44] Speaker 04: How much money is in state? [00:26:46] Speaker 01: I don't have the exact number because it depends on the number of transactions, but I can tell you it's greatly reduced because by being a grandfathered customer, by being a grandfathered customer, they will get transmission congestion rights, which is money given back to Missouri River to offset those costs. [00:27:08] Speaker 05: Presumably they wouldn't be here if it netted out to zero. [00:27:14] Speaker 01: It varies year to year, Your Honor. [00:27:16] Speaker 01: I think some regulated entities would rather be shielded completely from certain costs rather than run the risk that their congestion hedge might be too little. [00:27:29] Speaker 01: But I can tell you from my experience in RTOs, there are many circumstances in which a low-serving entity's congestion revenue actually results in a net surplus of revenue. [00:27:40] Speaker 01: Are there further questions from the bench? [00:27:42] Speaker 05: Thank you. [00:27:44] Speaker 05: Is there time left for petitioner? [00:27:52] Speaker 05: Thank you. [00:27:58] Speaker 03: If I may, let me start off by answering to Silverin's question. [00:28:03] Speaker 03: It costs Missouri River roughly $5 million a year to be stuck with these charges. [00:28:12] Speaker 03: There is a difference. [00:28:13] Speaker 03: I hope I didn't leave a misimpression. [00:28:14] Speaker 03: There is a difference between being a transmission service customer and being a transmission owner. [00:28:22] Speaker 03: The charges that are in dispute are only assessed on the transmission service contract. [00:28:30] Speaker 03: To give you some perspective, whether the contract is with a member or a customer. [00:28:38] Speaker 03: The transmission service contract is only with a customer. [00:28:42] Speaker 03: The separate contract of being a joint owner of the pool, dedicating your facility, allowing the pool to manage your facilities, is what accompanies being a member of the pool. [00:28:57] Speaker 03: The terms are [00:28:58] Speaker 03: kind of conjoined by the parties as well as on SPP's website, where the term join the pool covers just about everything. [00:29:07] Speaker 03: Is member the same thing as owner then, the way you're... Being a member means that you've given control over the operation of your facilities to the pool. [00:29:21] Speaker 03: It's not a change in ownership. [00:29:24] Speaker 03: The pool is a management organization, as it were. [00:29:28] Speaker 03: To put it in perspective, the 272-megawatt reservation that's an issue in this case, and it's the only issue in this case, represents roughly 0.5 percent [00:29:43] Speaker 03: of the peak load of the power pool's system. [00:29:49] Speaker 03: Now, it's not a direct comparison because that's not how you do the calculation, but it's the one that's prominent in the record. [00:29:55] Speaker 03: And when the integrated system joined the pool, [00:30:00] Speaker 03: It was represented to the Commission that that represented a $344 million savings to the existing pool members, not to mention any benefits, if there were any, to the people who were drafted into the pool. [00:30:16] Speaker 03: The statement that this was a decision of our business partners isn't a complete and accurate representation. [00:30:25] Speaker 03: First of all, they weren't business partners. [00:30:27] Speaker 03: They were transmission service providers, and the decision was made by the Power Pool and the FERC [00:30:35] Speaker 03: to allow this integration. [00:30:37] Speaker 03: And to say that the FERC had no role in this is to ignore the FERC's role in the regulation of regional transmission organizations. [00:30:46] Speaker 03: It's simply not correct. [00:30:49] Speaker 03: Unless you have any additional questions, I'm almost out of time. [00:30:54] Speaker 03: Do we have further questions? [00:30:55] Speaker 05: I guess we don't. [00:30:56] Speaker 05: Thank you very much for your consideration. [00:30:58] Speaker 05: Welcome, and we'll take the matter under submission. [00:31:00] Speaker 05: We'll take a brief break while the panels change.