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Case number 23-1264 et al.

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Sunflower Electric Power Corporation petitioner versus Federal Energy Regulatory Commission.

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Ms.

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Murphy for the petitioners, Ms.

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Banta for the respondents, Ms.

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Taylor for the interveners.

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Good morning, Ms.

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Murphy.

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You may proceed when you're ready.

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Thank you, Your Honor, and may it please the court, Erin Murphy, on behalf of the petitioners.

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The SPP tariff amendment at issue here was proposed to address a serious cost causation problem in parts of the region owing to certain wind rich zones.

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FERC recognized as much in its first set of orders addressing that amendment, where it expressly encouraged SPP's efforts to remedy the cost causation problem and ultimately accepted the amendment, subject to two minor tweaks, that it found would fully address any lingering concerns about the scope of the SPP board's discretion to approve alternative cost allocations for certain transmission facilities.

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Yet nine months later, FERC completely reversed course.

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Though nothing had changed in the interim save the commission's composition, a newly constituted FERC now concluded that the very same amendment that it had just found fully addressed any concerns about discretion and transparency somehow no longer did.

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That about face can't be reconciled with the FPA or with the APA.

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Under the FPA, FERC is required to address cost causation problems that it identifies, not sweep them under the rug, let alone reinstate them shortly after having accepted an effort to correct them.

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And under the APA, FERC has an obligation to adequately explain itself when it abandons earlier findings made on the exact same record and departs from its own precedent to boot.

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Yet FERC didn't even acknowledge its earlier express findings that the tariff amendment no longer posed any discretion and transparency concerns.

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And its efforts to distinguish past orders that approved exercises of far greater discretion with far less transparency by the SVP board are so flimsy as to border on pretextual.

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In short, FERC's orders smack of a result in search of a reason and can't be sustained.

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Why should we hear this case given that your client essentially got all the relief they could ever want and even more relief than they can get in this case in your other proceeding, the waiver application?

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So for two reasons.

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First, in the waiver application, while that proceeding is now final before FERC, it's very much still a matter of live dispute, because the same parties that are here as respondent interveners defending FERC's rejection of this tariff amendment have already filed petitions for review with this court challenging those proceedings and those orders before FERC.

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So we have a live dispute that still is ongoing in the courts, which is enough to dispel any concerns about mootness.

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But second and more broadly, what's your best case on that?

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I think the court's recent Norfolk Railway case deals with another dynamic where a case was still pending, there was litigation still pending.

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And the court said, it didn't matter whether it's likely or unlikely what the result in that litigation will be.

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It's enough that there was still litigation pending, so the dispute was still live.

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And don't get me wrong, we certainly think that FERC's orders were absolutely correct.

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And we fully intend to defend them before this court.

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But there is absolutely still a live dispute before this court about those proceedings.

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But even beyond that, what's different about those proceedings and this proceeding is actually

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those proceedings concern only a particular set of existing facilities and whether their costs should be reallocated.

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What's different about this proceeding is what the stakeholders we're all trying to do here is come up with a chair of amendment that would create a going forward fix so that when we have new facilities that come online or upgrades to existing facilities in regions that satisfy in the zones that satisfy this criteria, you could allocate their costs this way from the start rather than having to deal with this as an after the fact issue

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or go through a complete set of FERC proceedings to deal with it as each and every facility comes online.

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I'm sorry, I didn't mean to interrupt.

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No, no.

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I have a sort of a basic question, which is the costs that we're talking about here, these are the costs of constructing the transmission infrastructure or?

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I mean, the cost basically then gets spread over the lifetime of the transmission facility.

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So the costs of constructing that are amortized over the life.

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Constructing and maintaining.

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Exactly, exactly.

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cost of the actual transmission of the power, which is essentially that's why it's cost allocation is the concept of taking the costs that you kind of know will exist from the facilities and figuring out how they should be allocated among the region, which I think actually, you know, goes to why there's really not not a serious argument about standing here because

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But the petitioners are here and the respondents are here.

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We're all members of SPP who pay these costs.

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And so we all have a profound interest in what the allocation of the costs will be, both for existing facilities and as future facilities come online.

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Well, the question is, what future facilities?

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I mean, what imminent harm is there?

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Sure.

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It seems a little vague.

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In the factual presentation that we've gotten and the other petitioner, SPP doesn't identify any future facilities in their papers or in their briefs.

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Yeah.

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And I think it's fair to say that at the moment of these orders and this briefing, there weren't particular new facilities that had been planned to come online, but SPP plans on kind of a rolling basis.

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So you have new facilities come online.

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pretty much at any given year, they're going to be approving new facilities.

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It's my understanding they're actually, this isn't in the record because it's more recent, but proving the point that we expect there to be future facilities.

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There already is at least one facility planned in the Midwest region that could be a candidate for this kind of waiver.

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So I think the reason we're still here and the reason the respondent interveners are still here is everybody recognizes that there's going to be future transmission needs, particularly in the zones that satisfy

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that the first criteria here that SPP would have set up, because the whole reason we have this dynamic, this cost allocation problem, is because there's a very high volume of generation going on in these zones, this significant substantial increase in wind generation over the past decade that's continuing to increase.

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And as you have more generation come online, you're going to need more transmission, you're going to need upgrades to existing facilities,

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And the facilities in these regions are predominantly by-way facilities, which are the kinds of facilities at issue in the transmission in the proposed tariff amendment.

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Assume that what you said about possible future facilities coming online and being eligible for this, it would be enough to defeat mootness.

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I'd love to hear why, as a practical matter, you're opposing abeyance, which would allow us to consider this case along with the other.

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And as you know, the hearing order has already issued.

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It seems like.

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would probably be a delay of about another year.

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And it would allow the court to have all of these related issues before it.

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And it does seem, at least to my understanding, hard for you to say there's likely to be another facility in the next year that you're actually going to miss out on being able to pursue this for.

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Could you respond to that?

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Yes.

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So I think, from our perspective, this case is fully briefed.

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And this case is actually kind of

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broader than the other case.

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The issues are a little distinct, and this one is broader in that it deals with a fix for the whole SVP region.

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And so if anything, it makes more sense to be considering this case first, because we wouldn't have ever even needed the other case and gotten to those orders if this tariff amendment had gone into place.

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We would have just gone through the tariff amendment process

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rather than SPP needing to file a separate 205 for those particular facilities.

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So if anything, the order seems right to sort of start with the question of, okay, is this something that SPP can fix on a region wide basis?

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can it have an amendment here that allows for cost allocation consistent with the ex ante principle that the other side's bringing up here?

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You know, SDP is trying to do something consistent with that and say, let's put something in the tariff that tells everybody what the rules of the road are going to be.

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as new facilities come online.

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And it's important for planning purposes to know that.

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You know, everybody would rather know at the front end what it's going to look like.

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So I think it really does serve those principles and those planning that whole.

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But even if you prevail in this case, that only gives you an opportunity to essentially apply for a waiver.

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You don't necessarily get it.

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You might.

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Maybe, you know,

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The odds are that you will, but if it's denied, then you'd be challenging and you'd be back here challenging that, presumably.

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As for these four facilities, you've been granted that was the whole purpose of that process.

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And the papers talk about an upcoming facility that's unaffiliated.

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Which I presume means that it's not yours.

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What does unaffiliated.

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So I don't think there's any I mean we haven't at the time of the briefing we were not arguing that there's any particular facility that's coming online for.

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either of petitioners that would be beyond the four that are already dealt with in the separate proceeding that would be subject to seeking one of these waivers.

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But we absolutely do expect there to be facilities in both regions.

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And there was evidence about this before FERC about this.

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If you look at on JA 122 through 25, JA 137, 38, there were declarations from both Midwest and Sunflower explaining why they expect there to be future facilities,

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in the very near term that would satisfy this criteria.

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And so you're right that it's a right to apply for a waiver.

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We're not guaranteed to get one.

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But with the extremely narrow discretion that now exists under the amended version of this tariff amendment, it's pretty clear you'll be able to figure out if you satisfy the criteria.

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I mean, if you just take the example of what happened during the nine months that this tariff amendment actually was in place,

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only four facilities applied.

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The sunflower facilities are the only ones who apply.

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And if you wanted a reallocation, you had to apply during that period because there was a 180-day clock running once the tariff amendment went into place.

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And so once people had a chance to have this in place and look at the criteria and figure it out, there wasn't this enormous universe.

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There's more than 1,200 facilities in the SPP region, and only four of them thought they could satisfy this criteria.

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And as you can see from those separate orders, they satisfied it kind of running away.

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It wasn't even a close question.

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And so given the way the tariff amendment works, after the specific requests that FERC made to modify it, it says that SPUP's board, the only thing it can base its decision on is whether the three criteria are satisfied.

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So if they're satisfied, you're getting a waiver.

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And if they're not, you're not.

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And if you don't get one and they are satisfied,

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You're going to have a very powerful 206 application to FERC saying that the board didn't comply with the terms of the tariff.

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On the jurisdictional questions, I understand you don't represent SPP.

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But do you think there's an argument that SPP is differently situated?

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I mean, it seems like they are the direct object of this order.

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And in a practical sense, we're reviewing an order that removed an authority from SPP.

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Absolutely.

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I think that SPP has standing independent of petitioners here, and that that, of course, is sufficient basis for this court to resolve this case, if you had any doubt about petitioners.

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Because, of course, SPP has an interest in its authority under its own tariff.

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It is, as you say, the object.

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I mean, it's the object of FERC's action.

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And we are the objects in the sense of how the tariff operates, because we're the members of SPP who are going to pay the costs under the cost allocation.

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If neither SPP nor its members have interest in how it allocates costs, I'm not really sure how this court's ever supposed to be reviewing determinations about what the terms of an RTO or ISO's tariff are.

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And really, if you look at cases that have raised standing concerns, they haven't been in the context of people challenging or defending amendments to

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the tariff that applies throughout the region.

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They've been in the context of more specific things that only affected one facility or in the context of things where you didn't have final agency action, dynamics like that.

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This court has long reviewed cases where the members of the region and the RTO or the ISO are the parties who are here defending the tariff or the challenges to the tariff or attacking the

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But in looking at those cases, it seems like the RTOs that have standing, they can point to not just that they were the object of the regulation, but that there would be some cost that they would incur to

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Well, usually the cost is actually going to be borne by the members because the RTO or the ISO is just setting the rules of the road about how the costs throughout the region are going to be allocated among members.

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So in the petitioners, my clients are absolutely facing the costs.

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And that's then passed on to the rate payers?

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That's right.

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Yeah.

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So ultimately, all of this is about who's going to, you've got the entity who wants to be able to make the decisions about who can pay the costs.

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And then you've got the parties who actually have to pay the costs.

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So between us, we've basically got the universe of interested parties in this amendment.

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And if you can't kind of challenge this now, there's no way to do it.

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Because if you have to wait till you have a particular facility, sure, we could

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have, you know, try and get SPP to file a separate 205, but we're not going to be able to challenge what happened in these orders, which is the denial of SPP's effort to amend its tariff.

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Why is this cost allocation issue not better addressed through the RCAR?

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process.

[00:14:31] Speaker 06:
Yeah, FERC itself rejected that argument in the approval order and it never resuscitated it in the reversal and rehearing orders.

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So I don't think it's actually, I think there's kind of a tennery problem with respondent interveners making that argument.

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But as FERC explains, so this is not the same as the ex ante.

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There are separate issues.

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Yeah.

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So the RCAR, I mean, FERC explained this a lot more in the separate 205 proceedings, where it's a little bit more at issue.

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And in that rehearing order they submitted to the court a couple of weeks ago, it talks at a little more length about the RCAR.

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And how it's just a different process.

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It's not designed.

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It's at a higher level.

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It's at a zonal level rather than a facility level.

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It's done at a kind of a point in time.

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And so it's just not designed to deal with figuring out whether you have specific transmission facilities as to whom the costs that are being allocated face a cost causation problem.

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And so this argument, respondents impressed this argument all throughout the proceedings and FERC consistently rejected it.

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It's not one of the two narrow grounds that FERC offered in its reversal and rehearing orders for rejecting this.

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Now FERC did reference

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the ex ante issue in its orders.

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And I don't think that works for a couple of reasons.

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First, there's no ex ante issue at all as to the going forward tariff amendment.

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The whole point of this is to, consistent with the ex ante principles, say, let's change the rules now before new facilities come online.

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That's what ex ante is all about.

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And so to the extent there's any exing

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This is a little unclear to me, but ex ante could be before the construction of any new transmission, or it could be at the time of the overall regional planning process.

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And I take it you're arguing the former and that otherwise you can't have a tariff.

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Basically, I mean, you have XENT, the concept that order number 1000 back in the day when it said you should have this was getting at is let's set rules of the road now that will govern all facilities as they come online.

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So people know the rules as they're thinking about transmission planning for the region.

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And so what the principal is basically saying is have the rules of the road in place before

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facilities are coming online.

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So to the extent what this amendment is doing is dealing with those future facilities, far from posing an ex ante problem.

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So what about existing facilities?

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Now the question is as the existing facilities and what FERC has explained here and also separately in the 205 proceedings is ex ante, it's not a rule that says you can never change the allocation of existing facilities.

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And as FERC put it in the rehearing order that it submitted just a few weeks in the separate proceedings, it couldn't be a rule that says you can never change the reallocation because then the ex ante principle would be in conflict with FERC's mandate under the FPA that if rates are not just and reasonable on a forward looking basis, it needs to change them.

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And so we're not talking here about any retroactive changes.

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Nobody's trying to reallocate costs that were already paid.

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to change anything that has already happened.

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This is just a question for those existing facilities of whether the remaining costs that haven't been paid yet should be allocated differently.

[00:17:45] Speaker 02:
I guess I think FERC would say that they're we're making a little bit of a softer point in their order, which was you an aspect of the discretion

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that would be afforded here is it's both large in scope and it's at least in tension with the ex ante principle to the extent it would allow an RTO to have the discretion to change the rules of the road for an existing facility.

[00:18:09] Speaker 02:
And to that extent, maybe you would say that's not sufficient, but is that at least not coherent on its face?

[00:18:15] Speaker 06:
I mean, I suppose that's probably the best understanding of what they're trying to say.

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For one, it makes absolutely no sense as to the forward-looking issue.

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It just doesn't.

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Because at that point, you're saying we'd rather not have the tariff reflect what we're going to do, and we're going to deal with this in a one-off situation, which is contrary to it.

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As to the existing facilities,

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I think it's just not consistent with FERC's approach generally to all this.

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And it's not consistent with the approach FERC took now in the separate proceedings, where it said, this isn't some hard and fast rule.

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I mean, if ex ante meant you could never change the allocation at all, never have any reallocation, the ex ante principle would be even more aggressive than the filed rate doctrine, because you're allowed to change on a going forward basis rates under the filed rate doctrine.

[00:19:00] Speaker 05:
Well, and FERC approved

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the allocation with respect to the only ones that are, as you say, arguably ex ante.

[00:19:09] Speaker 06:
So exactly.

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And it dealt squarely with this in those separate orders and said, this isn't a problem because ex ante is not a hard and fast rule that says you can never change allocations going forward.

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And it specifically said, which I think is absolutely right,

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that to the extent you were to interpret ex ante that way, that principle, which is just a planning principle in a FERC order, would be essentially overriding the mandate of the FPA that you have to change rates when they're not just unreasonable and when they pose a cost causation problem.

[00:19:39] Speaker 06:
So I just don't think the ex ante argument really gets them anywhere, and the two can

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Can I ask about one of first other rationales, which is the benefit criteria and allowing two different metrics rationale for doesn't make that argument, but the intervenors do.

[00:19:56] Speaker 02:
And I'm wondering, apart from the fact that for change course, what is your argument that

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possibility that multiple metrics would be used couldn't lead to discriminatory results.

[00:20:10] Speaker 06:
The problem with that argument is there's nothing discriminatory about either of those options.

[00:20:14] Speaker 06:
They're both, as FERC said in the approval order, they're just two metrics that FERC itself has recognized are permissible ways to demonstrate

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what kind of the costs and benefits throughout the region are.

[00:20:26] Speaker 02:
And so... But it does raise the possibility that two otherwise similarly situated applicants would have different results if the metrics pointed in different directions, doesn't it?

[00:20:37] Speaker 06:
Well, I mean, the metrics... I'm not sure there's going to be a situation where the metrics kind of point in like completely different directions.

[00:20:45] Speaker 06:
I mean, essentially what seems to be contemplated is, look, you can put forward one or you can put forward two.

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I suppose somebody who's opposing it might try to say, you put forward this one because you don't satisfy that one.

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But I think the point that SVP was making in the tariff is, look, these are two metrics that FERC itself has repeatedly accepted as permissible metrics for figuring out if allocations are consistent with cost causation principles.

[00:21:10] Speaker 06:
And so accepting the same metrics and saying either one of them is going to get you to the same place just doesn't seem to be the kind of thing that

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Sure, I suppose you could say there's discrimination in some sense.

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But as this court has put it, the FPA requires undue discrimination.

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So you'd need to be treating entities differently that are really completely differently situated, not just it's a little easier for us to show it under this metric versus that metric, but they both show the same thing.

[00:21:36] Speaker 02:
One of the difficulties for me on this specific issue is that nobody seems to explain

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whether these metrics are ever going to lead to different results.

[00:21:46] Speaker 02:
It seems to assume they will.

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Your side seems to assume they won't.

[00:21:50] Speaker 02:
And one view would be we hold that against FERC for not explaining further.

[00:21:54] Speaker 02:
But another would be we hold it against you for not explaining why FERC is wrong.

[00:22:00] Speaker 06:
Yeah.

[00:22:00] Speaker 06:
And I suppose you anticipated what I was going to say, which is I would urge you to take the first path, which is if FERC thinks that's a problem, it needed to explain it.

[00:22:10] Speaker 06:
All it did is say there's two different metrics.

[00:22:12] Speaker 06:
And so therefore, that's a reason to reject it.

[00:22:15] Speaker 06:
I don't think that's sufficient.

[00:22:16] Speaker 06:
FERC has an obligation to explain why

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using two metrics that are FERC approved metrics FERC itself is used in the past is somehow going to pose some big problem the mere fact that you can look at two things I mean that in itself can't be the reason for rejecting and it's also completely inconsistent with how FERC has operated when it comes to other terms of SPPs tariff that allow for the exercise of discretion because if you look at both the base

[00:22:44] Speaker 06:
plan, a basic upgrade plan, waiver process, the transmission waiver process, the two that we talk about in the briefing.

[00:22:50] Speaker 06:
I mean, those don't even require, they don't limit the criteria the board can consider at all because they explicitly say they can consider what's in the tariff, including, but not limited to what's in the tariff.

[00:23:00] Speaker 06:
So for FERC to say, you've got this

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You set up this process that actually is way more constraining, but we somehow have a problem with you saying that you can prove it two ways.

[00:23:10] Speaker 06:
When in the past, they've said, we don't have a problem with any way you want to try to prove that you're entitled.

[00:23:15] Speaker 06:
I think they run into lack of reason explanation and a departure from their own past precedent.

[00:23:19] Speaker 05:
So I am struggling a little bit with, I think, the same thing that Judge Garcia is struggling with, which is sort of bringing this down to a more concrete level.

[00:23:26] Speaker 05:
So if there were two identically situated facilities, and they both thought, OK, for us, we're going to show that the first of the two benefit criteria, that that's the showing that they make.

[00:23:43] Speaker 05:
And they don't turn to the integrated market criterion.

[00:23:47] Speaker 05:
What if FERC says, OK, facility A has met that.

[00:23:53] Speaker 05:
Facility B, we're going to consider facility B only whether it's met the integrated market criterion.

[00:23:59] Speaker 05:
Is that possible?

[00:24:00] Speaker 05:
If not, why not?

[00:24:02] Speaker 06:
I think that would violate the terms of the tariff amendment, as I understand the tariff amendment, because the tariff amendment says the board has to, the only thing it can look at is whether the three criteria are satisfied.

[00:24:13] Speaker 06:
And the amendment specifically says, as to the third, the benefit criteria, that you can satisfy it through either path.

[00:24:19] Speaker 06:
Only those two paths, but through either path.

[00:24:21] Speaker 06:
And so if SPP's board has an application before it that satisfies the first criteria, the second criteria, and one of the two ways of satisfying the third criteria, I don't think it has discretion to say, well, we're going to make you prove it the other way, because the tariff amendment specifically says,

[00:24:37] Speaker 06:
that either one is sufficient.

[00:24:39] Speaker 06:
And so I think it makes clear that all you have is just two different ways of trying to prove the same thing.

[00:24:46] Speaker 06:
And owing to all the transparency that's built into this process leading up to the board's vote, you're going to have a very complete record to understand what the board was looking at, what evidence it had, whether it had a good basis to conclude that the criteria was satisfied.

[00:25:05] Speaker 06:
So I think all that goes back to why the discretion concerns for grades just really aren't grounded in reality since the tariff amendment explicitly says that the only thing that the board can base its decision on is whether the criteria are satisfied.

[00:25:18] Speaker 06:
So if the board's doing anything else, it's violating the criteria and somebody can file a 206 application and challenge that.

[00:25:24] Speaker 02:
I want to make sure I understand your position on the cost causation problem and 206.

[00:25:29] Speaker 02:
So am I right?

[00:25:31] Speaker 02:
You're not disputing that generally.

[00:25:34] Speaker 02:
Burke had its decisions whether to suesponte initiate a 206 proceeding are unreviewable.

[00:25:41] Speaker 02:
general matter.

[00:25:43] Speaker 02:
Instead you think there's something in this record that is sort of an affirmative finding that the existing method is unjust and unreasonable and that triggers the 206 obligation.

[00:25:52] Speaker 06:
I think it's fair to say, it's a product of the kind of unique procedural history of this, that you have FERC having made a finding in the approval order, an explicit binding at JA 326 paragraph 48 where they say

[00:26:06] Speaker 06:
that SPP's proposal will better align the allocation of costs here, that this is the better way to do it.

[00:26:12] Speaker 02:
And you think that's the tantamount to an affirmative finding?

[00:26:15] Speaker 06:
I think it's, and I mean, you know, Burke has certainly not taken issue with the proposition that the rates that would be produced under the waiver are just and reasonable.

[00:26:27] Speaker 06:
I take them to be conceding that and to really only be arguing about a risk of undue discrimination.

[00:26:33] Speaker 06:
And I think when you look at that, that history of them having acknowledged, encouraged, said, you know, we get it, there's an issue here, you need to address this issue, to then at the end of the day, just kind of throw up their hands.

[00:26:45] Speaker 06:
I mean, even just as a procedural matter,

[00:26:47] Speaker 06:
It seems like there needs to be more explanation as to why after encouraging this very lengthy stakeholder process, they just kind of say too bad.

[00:26:56] Speaker 06:
And I find it, you know, it's, I mean, the notion that you end up in the rehearing order with one of the commissioners writing separately to say, why don't you consider a stakeholder process?

[00:27:03] Speaker 06:
I mean,

[00:27:04] Speaker 06:
My goodness, there was a six year stakeholder process like that's that's what this was all about.

[00:27:09] Speaker 06:
So it just under the circumstance of this case, I think that what FERC had to offer about 206 just isn't enough to explain.

[00:27:16] Speaker 05:
The causation principle is, you know, it's helpful to your clients here, but it's not it's a rough and it has to be a rough principle.

[00:27:29] Speaker 05:
There's a lot of

[00:27:31] Speaker 05:
you know, cost sharing to people who are not enjoying the precise benefits that the cost they're paying go to.

[00:27:41] Speaker 05:
And that's just the nature of an energy system.

[00:27:45] Speaker 06:
That's absolutely right.

[00:27:46] Speaker 06:
But we're not talking here about a cost causation issue at the margins.

[00:27:50] Speaker 06:
The evidence before FERC was that rate payers in the sunflower and Midwest zones are paying as much as two to even more than three times

[00:27:58] Speaker 06:
more than ratepayers on average are paying in other zones in SPP.

[00:28:02] Speaker 05:
Do we know how much of the additional expense?

[00:28:05] Speaker 05:
I saw your brief.

[00:28:07] Speaker 05:
Your blue brief, you say Midwest Energy and Sunflower customers face 2022 byway costs of $814 and $1,430 per megawatt month, respectively, compared with a load-weighted average of $427 for other SPP zones.

[00:28:28] Speaker 05:
page 12 of your blue brief.

[00:28:30] Speaker 05:
Do we know how much of the additional expense is due to the fact that facilities in these zones transmit wind energy regionally?

[00:28:39] Speaker 06:
Well, I think that's basically what the criteria that SPP established were designed to kind of fair it out.

[00:28:45] Speaker 06:
So what they do is they start by saying, first you need to show that you have a way higher volume of generation in the zone than the zone

[00:28:55] Speaker 06:
itself uses than is needed to serve local load.

[00:28:57] Speaker 06:
It's like 100% higher than the previous year's needs.

[00:29:01] Speaker 06:
So that's where you start by identifying zones that have just a high, high volume of generation.

[00:29:06] Speaker 06:
that is serving the rest of the region.

[00:29:08] Speaker 06:
And then the second criteria, the flow criteria, looks at it at the facility level and looks at it about what's actually flowing over the transmission lines and asks, is there a high, high volume there of transmission of energy that is coming from that unaffiliated load within the zone, from the load that's not serving

[00:29:27] Speaker 06:
the local load, but is instead independent wind generation, whatever it may be.

[00:29:32] Speaker 06:
And so those two criteria are designed to say, OK, look, basically what the stakeholder process was about was saying, we know these costs are higher.

[00:29:40] Speaker 06:
Let's figure out why.

[00:29:42] Speaker 06:
And let's figure out in what circumstances we need to address that problem.

[00:29:45] Speaker 06:
And so those two really narrow it down.

[00:29:47] Speaker 06:
And once you take those two criteria, you have narrowed it down a ton.

[00:29:51] Speaker 06:
There's only three zones out of 18 that satisfy the first criteria.

[00:29:55] Speaker 06:
And two of those are Sunflower and Midwest.

[00:29:58] Speaker 06:
Once you get to the second criteria, you're down to 36 facilities of existing facilities out of more than 1,200.

[00:30:04] Speaker 06:
And then when you get to the third criteria of those 36, only four sought a waiver.

[00:30:09] Speaker 06:
So it's because the way these criteria work is to say,

[00:30:13] Speaker 06:
let's not just assume you know everything in that zone is is incorrectly allocated let's find the facilities that actually seem to be serving a much more regional purpose and reallocate causes to those and just to be clear I mean even when you if with the reallocation we're talking about which is

[00:30:32] Speaker 06:
to reallocate their costs 100% regionally.

[00:30:35] Speaker 06:
That doesn't mean Sunflower and Midwest customers pay nothing for those facilities.

[00:30:39] Speaker 06:
They're part of the region.

[00:30:40] Speaker 06:
So they just pay a regional cost allocation instead of having to bear the brunt, the 2 thirds cost that they currently do under the byways system.

[00:30:48] Speaker 05:
Are there other facilities other than Sunflower Midwest who could have but didn't make the application similarly situated that just didn't have the brainstorm and would be closed out?

[00:31:02] Speaker 05:
There's a window for existing facilities.

[00:31:04] Speaker 05:
And then as you say, there's going forward, any new facilities can benefit.

[00:31:10] Speaker 06:
I think as to the existing facilities, the logical inference and the inference that's consistent with my discussions with folks about this, there's nothing directly in the record about this, but is that they just determined they couldn't satisfy the third criteria.

[00:31:23] Speaker 06:
Or maybe there's a handful where they just had very little life left on the project or something like that.

[00:31:27] Speaker 06:
But more likely, I think there were just some.

[00:31:29] Speaker 06:
The third criteria is a separate criteria.

[00:31:31] Speaker 06:
And each of these criteria kind of windows it down a little bit more.

[00:31:36] Speaker 06:
And so they just were determinations

[00:31:38] Speaker 06:
Even if the first two were met, they couldn't satisfy the third one.

[00:31:42] Speaker 06:
And I do think that goes to show this notion that on a going forward basis, you're going to have some explosion.

[00:31:48] Speaker 06:
of facilities that are applying for these waivers and qualifying for these waivers, it's not consistent with the record evidence.

[00:31:55] Speaker 06:
But I would note that to the extent there really is some concern that there'd be a lot of facilities, that's hardly a reason to reject the amendment.

[00:32:05] Speaker 06:
If you think there's a substantial number of facilities whose costs are not really being allocated consistent with their benefits, that wouldn't be a reason to say, let's leave it alone.

[00:32:14] Speaker 06:
Because if anything, that'd be a reason to say,

[00:32:17] Speaker 06:
broader solution but I think the stakeholder process revealed this isn't a you know it's not a problem with the highway highway by way methodology on a whole such that the whole thing needs to be reconsidered or thrown out it's just a small problem that is serious where it occurs but isn't you know it's a small number of facilities and that's why SPP came up with what it called a surgical response doll

[00:32:40] Speaker 05:
Speaking of the highway byway system, this is another sort of basic facty question.

[00:32:45] Speaker 05:
Why is it that producing excess wind power doesn't require high voltage, whereas producing excess power in more traditional ways does?

[00:32:56] Speaker 06:
It's actually more just in nature that these zones where it's occurring, they had pre-existing transmission before they became these very big

[00:33:05] Speaker 06:
The sources of wind generation and the pre existing systems there are by way systems is they're not huge zones.

[00:33:11] Speaker 06:
And so you kind of work with what's already there.

[00:33:14] Speaker 06:
And so you're going to have upgrades to buy wave facilities, your connections are going to be to buy wave.

[00:33:18] Speaker 06:
So it's more just a matter of like, that was the existing infrastructure in the particular zones.

[00:33:23] Speaker 06:
that ended up kind of unanticipatedly being these very high wind-rich zones.

[00:33:28] Speaker 05:
Now, you know, I suppose... If you were to start from the beginning and you were building a place where there's a lot of excess wind generation, would that be a place where typically there would be some highway?

[00:33:39] Speaker 06:
I mean, I might think, like, you know, my sense is that seems like it might make sense, but it's probably all going to depend on a lot more than just that because you've got to look at the nature of the area, the grid, all of those things.

[00:33:50] Speaker 06:
But, you know, to the extent in the future,

[00:33:52] Speaker 06:
there were a determination that you needed some highway facilities in these zones, then this whole thing drops out because the highway facilities are already allocated regionally.

[00:34:02] Speaker 05:
I think I know the answer, but who determines where and whether to build additional wind power?

[00:34:08] Speaker 06:
So the generation is determined by generators and under state policies and all of that.

[00:34:15] Speaker 06:
So we as the transmission owners have basically no, we're not deciding what generation is going to be there.

[00:34:22] Speaker 06:
We're agnostic as to what's there.

[00:34:24] Speaker 06:
It's not kind of our doing that there's a bunch of wind there.

[00:34:28] Speaker 06:
It just happens to be there.

[00:34:29] Speaker 06:
And we have the transmission facilities.

[00:34:31] Speaker 06:
And so we're stuck paying for it.

[00:34:33] Speaker 05:
And who determines where and when to build new transmission facilities?

[00:34:38] Speaker 06:
So the transmission planning, the transmission planning, that's where SPP is much more involved in determining what the needs, as long as you're talking about things that are part of the grid.

[00:34:46] Speaker 06:
So it's going to be, and that's why we can't kind of just like tell the court, oh, we're going to build some new transmission.

[00:34:51] Speaker 06:
We don't get to decide that is a planning process working with SPP to determine where it thinks that needs are for upgrades and additional facilities and all of that.

[00:35:01] Speaker 06:
But that's why I think some of these, to the extent what was really going on underlying in these proceedings was some concern about spreading the costs of wind generation and that being unfair.

[00:35:13] Speaker 06:
I mean, we didn't set the policies, and neither did SPP, to have a bunch of wind generation in these zones.

[00:35:19] Speaker 06:
And so to the extent any of that is driven by policies of states, the whole point of the cost causation principle is,

[00:35:28] Speaker 06:
all that sort of drops out and the ultimate question is who's getting the benefits and who's paying the costs and whatever decisions may have been made by others about what energy should be generated where we're paying an outsized share of the costs without this amendment in place and without the approvals that FERC has made in the separate 205 proceedings for this existing sunflower facilities.

[00:35:52] Speaker 05:
And does the cost allocation scheme, which comes first?

[00:36:00] Speaker 05:
Highway, byway, cost allocation, or selection of facilities as part of the regional transmission plan?

[00:36:08] Speaker 06:
So the highway-byway methodology has been in place in the tariff since I think it was 2010.

[00:36:14] Speaker 06:
There were some different things before.

[00:36:16] Speaker 05:
A selection of something as highway or byway.

[00:36:19] Speaker 06:
So it's just dictated by the voltage of the facility.

[00:36:25] Speaker 06:
So the decision is made in the planning process about what kind of facilities you need.

[00:36:30] Speaker 06:
But basically, by default, the voltage of the facility is going to make it.

[00:36:34] Speaker 06:
either a highway or a byway facility, and that's going to dictate its costs.

[00:36:39] Speaker 06:
And so that's why, absent this amendment, just by default, just by virtue of being under 300, and 300 is the threshold to be highway versus byway, our cost would be allocated 2 thirds to the local zone and only 1 third to the rest of the region without the amendment, which allows the complete reallocation.

[00:37:02] Speaker 05:
And how often is there SPP regional planning?

[00:37:07] Speaker 06:
Yeah, I don't actually know exactly how often they make the planning determinations.

[00:37:14] Speaker 06:
FERC may be able to tell you that.

[00:37:16] Speaker 06:
But there's constantly, I mean, it's not just a matter of new lines.

[00:37:22] Speaker 06:
It's also upgrades to existing lines.

[00:37:23] Speaker 06:
So there's a lot of changes happening all the time, and especially a lot coming online in these regions that are

[00:37:30] Speaker 06:
that drove this problem precisely because they have such a high volume of generation as compared to the local needs and the local grid that was set up to serve them.

[00:37:43] Speaker 06:
Thank you.

[00:37:44] Speaker 06:
Any other questions?

[00:37:45] Speaker 06:
Thank you.

[00:38:01] Speaker 04:
Good morning.

[00:38:02] Speaker 04:
I'm Carol Banta for the Commission.

[00:38:04] Speaker 04:
And I do want to talk about standing, but I think I'll begin with

[00:38:11] Speaker 04:
Just a quick discussion of the 205 versus 206 questions.

[00:38:16] Speaker 04:
We can't refer to the allocation orders proceeding as the 205 proceeding, because this is as well.

[00:38:23] Speaker 04:
Every order in front of the court, the rejection order from the previous proceeding, the three orders from this proceeding, the two orders in the allocation, all of these are 205.

[00:38:32] Speaker 04:
There has not been a 206 complaint by

[00:38:35] Speaker 04:
petitioners or I believe anyone else challenging the existing highway by way cost allocation, which has been in place since 2010.

[00:38:42] Speaker 04:
That is the lawful rate.

[00:38:44] Speaker 04:
It was approved or the lawful tariff cost methodology.

[00:38:48] Speaker 04:
It was approved by the commission.

[00:38:49] Speaker 04:
Then it is still in place.

[00:38:51] Speaker 04:
It is still just and reasonable until the commission decides in a two of six proceeding that it is not.

[00:38:57] Speaker 04:
It has not done that and hasn't even been asked to do that in

[00:39:01] Speaker 04:
these orders in the in the tariff order in particular and then in the allocation orders of the commission did agree.

[00:39:07] Speaker 04:
that reallocating the costs of some of these facilities outside that cost methodology might better align the costs.

[00:39:15] Speaker 04:
That's true.

[00:39:17] Speaker 04:
But as Judge Pillard, as you said, cost allocation is rough.

[00:39:22] Speaker 04:
It is roughly commensurate.

[00:39:24] Speaker 04:
The Supreme Court long ago referred to it as a zone of reasonableness, just because it is true that a better alignment of these costs is just unreasonable, as the commission found in the allocation orders.

[00:39:34] Speaker 04:
That doesn't mean it's the only one.

[00:39:36] Speaker 04:
In fact, if the commission said there's a better way, therefore the existing way is not just unreasonable, we've been reversed by the court for doing that in a case called Ameramain.

[00:39:47] Speaker 04:
The commission just because there might be a better way doesn't mean the existing way is unlawful.

[00:39:52] Speaker 04:
So just so we're clear that the existing cost allocation methodology continues to be just unreasonable and that these are both 205 proceedings.

[00:40:03] Speaker 05:
I will explain why applying the tariff amendment would violate the ex ante principle, the commission's order denying rehearing says,

[00:40:17] Speaker 05:
that SPP's proposal would provide the SPP board with discretion to change which cost allocation method applies to specific byway facilities after they have been selected as a byway facility.

[00:40:30] Speaker 05:
What is not ex ante about it if we're talking about facilities that are being constructed going forward?

[00:40:39] Speaker 05:
You'll basically have three categories, a byway facility that is

[00:40:45] Speaker 05:
charge to local zone, a byway strength or voltage facility that is charged zonally, and a highway voltage facility that is charged zonally.

[00:40:57] Speaker 05:
What's wrong with that under ex ante, under the ex ante principle?

[00:41:01] Speaker 04:
I think if, now the ex ante principle, which comes from order 1000,

[00:41:09] Speaker 04:
happens pre planning and the idea is if you have these rules in place, cost allocation in place before planning, then the planning can be driven by knowledge of who's bearing the costs and who benefits.

[00:41:23] Speaker 04:
And that goes to what order 1000 was designed to address, which was that facilities weren't being planned because there weren't rules in place and the people or the entities considering the planning couldn't see into the future who was going to have to pay for them necessarily.

[00:41:38] Speaker 04:
So that's where the principle in order 1000.

[00:41:41] Speaker 04:
It is true.

[00:41:41] Speaker 04:
I think the Commission in these orders, considering this discretionary process for SPP to decide cost allocation, the Commission focused on the ex ante aspect.

[00:41:54] Speaker 04:
I think with respect to the concern about reallocating existing facilities, I don't know that the Commission was really speaking to the concern about potential future facilities that hadn't even been planned yet,

[00:42:06] Speaker 05:
very much was that's going to the other 205 proceeding that's not before us.

[00:42:12] Speaker 05:
Well, no, but but they were they were they weren't they were part of they were parties here.

[00:42:16] Speaker 04:
But no, not just that, your honor.

[00:42:18] Speaker 04:
Sorry to interrupt.

[00:42:19] Speaker 04:
But I interrupted you.

[00:42:20] Speaker 04:
I apologize.

[00:42:21] Speaker 04:
The process that SPP proposed here was going to allow reallocation of existing facilities.

[00:42:28] Speaker 04:
And when it proposed that

[00:42:29] Speaker 04:
it didn't yet have maybe this is the only application that was submitted for an existing facility.

[00:42:36] Speaker 04:
Um, and I'm not sure the commission didn't really discuss the 18 month, whether that was an all time limit that no one else could ever come in.

[00:42:44] Speaker 04:
Um, if, if in fact, as the petitioners contend, this process will help going forward as new wind energy is built.

[00:42:53] Speaker 04:
I don't understand why the

[00:42:55] Speaker 04:
owners of existing facilities wouldn't be seeking reallocation when that happens, just as a sunflower did.

[00:43:02] Speaker 04:
But the process that SPP proposed did allow it to reallocate for existing facilities

[00:43:07] Speaker 04:
in addition to whatever it might do for future ones.

[00:43:11] Speaker 04:
So that's why the commission discussed the ex ante concern that you would be changing the rules of the road through this process.

[00:43:17] Speaker 04:
And that was only one of several concerns.

[00:43:19] Speaker 04:
One place I'll point in particular on JA 501 and 502.

[00:43:23] Speaker 04:
In paragraph 37 of the second rehearing order, the commission really kind of summarizes the several concerns that together

[00:43:33] Speaker 04:
it found it couldn't approve this process.

[00:43:36] Speaker 04:
One was the discretion, the amount of discretion given to the board.

[00:43:40] Speaker 04:
One was the concern about undermining the ex ante cost allocation method.

[00:43:45] Speaker 04:
One was the scope because sure, maybe not every facility would actually be able to meet the test, but the eligibility was open to numerous facilities region wide and not

[00:43:58] Speaker 04:
inherently limited the way a couple of other processes that SPP already had were.

[00:44:03] Speaker 04:
And fourth, the concerns about transparency because the board wouldn't have to articulate its reasons.

[00:44:08] Speaker 04:
So this is where the commission puts all those things together.

[00:44:10] Speaker 04:
So ex ante was one part of it.

[00:44:13] Speaker 04:
Now, when we get to the allocation orders that we just focus on ex ante for just one more second, I think.

[00:44:19] Speaker 02:
But petitioners would say is something like these orders treat that principle as if it's inviolate.

[00:44:25] Speaker 02:
And in fact, it's not and can't be as your, you know, recent orders in the other proceeding show.

[00:44:30] Speaker 02:
And that's what I was about to write.

[00:44:32] Speaker 02:
So it seems a little bit inconsistent.

[00:44:35] Speaker 04:
Well, here is one factor.

[00:44:36] Speaker 04:
And again, this here we're letting the SPP port board make the decision without going to FERC.

[00:44:41] Speaker 04:
So that so it was one of the factors, in addition to the others, I just named that the commission found

[00:44:46] Speaker 04:
concerning because it would, it would undermine the certainty of ex ante cost allocation to change it later.

[00:44:52] Speaker 05:
But that really, I mean, and that's what I thought FERC was saying.

[00:44:55] Speaker 05:
The ex ante is really a subsidiary to the concerns about transparency and discretion.

[00:45:01] Speaker 05:
If transparency and discretion are really fully resolved, then FERC in approving the tariff amendment has given its blessing.

[00:45:12] Speaker 05:
And the SPP is then legitimately exercising its role in determining which facilities meet the standards.

[00:45:27] Speaker 04:
I don't think the concern about ex ante.

[00:45:29] Speaker 04:
I don't think that answers the concern about ex ante.

[00:45:31] Speaker 04:
Because if the commission approved this SPP process, they would be changing the allocation of existing facilities.

[00:45:40] Speaker 04:
And it would undermine the certainty of when you're at the planning stage and you're thinking about what facilities to do and you look at the rules of cost allocation, who's going to pay for them.

[00:45:54] Speaker 04:
And that goes into the decision.

[00:45:56] Speaker 04:
of who supports building the facilities, et cetera.

[00:45:59] Speaker 04:
And then that has changed later.

[00:46:00] Speaker 04:
It does undermine the certainty that was the point of Order 1000.

[00:46:04] Speaker 05:
So can you be more concrete about that?

[00:46:06] Speaker 05:
Because as I understand it, what's happened is there was approval of certain highway facilities and certain byway facilities with the understanding that zonal service, most of the zonal transmission was going to occur under highway facilities, through highway facilities, and most of the more

[00:46:26] Speaker ?:
Thank you.

[00:46:27] Speaker 05:
Did I say zonal?

[00:46:27] Speaker 05:
The regional was going to go through the highway facilities and the zonal would go through byway.

[00:46:33] Speaker 05:
Then when you get up and running and the byway facility is being used for zonal distribution, it would seem that the even more fundamental ex ante principle is that those who benefit roughly should be those who pay.

[00:46:51] Speaker 05:
And when that's really out of kilter, the very assumption behind

[00:46:57] Speaker 05:
selection of some as byway and some as highway is, is no longer really accurate.

[00:47:05] Speaker 04:
Well, I don't think the commission has answered that question because I don't think that's how the commission would look at it.

[00:47:10] Speaker 04:
The commission would look at the facts had changed us to that facility.

[00:47:13] Speaker 04:
And that's where we come to the allocation order.

[00:47:15] Speaker 04:
And the awkward thing, as we've said, these orders should be considered together because if petitioners are arguing this whole case about the cost causation,

[00:47:23] Speaker 04:
And the cost allocation issue.

[00:47:25] Speaker 04:
It's not even in these orders because but but let me explain to you what the commission found in the allocation proceeding because there the commission itself is approving a reallocation of the costs.

[00:47:36] Speaker 04:
It's not something that the SPP board is doing.

[00:47:39] Speaker 04:
on its own.

[00:47:40] Speaker 04:
This is a Section 205 filing.

[00:47:43] Speaker 04:
You're talking about the other case.

[00:47:44] Speaker 04:
The other case.

[00:47:45] Speaker 04:
Yes, exactly.

[00:47:46] Speaker 04:
That Section 205 filing.

[00:47:49] Speaker 04:
That's the other petition that's not before us.

[00:47:51] Speaker 04:
Exactly.

[00:47:52] Speaker 04:
For the four.

[00:47:53] Speaker 04:
Exactly.

[00:47:55] Speaker 04:
Which, since the rehearing order has done that, we'll move to briefing soon.

[00:48:01] Speaker 04:
We've asked to have the abeyance continued to February 4th, just so we can get any more petitions for review.

[00:48:06] Speaker 04:
But you were going to say, in the allocation proceeding, when the firm did.

[00:48:09] Speaker 04:
So when the commission is looking at it itself, under Section 205,

[00:48:14] Speaker 04:
Then, of course, some parties said, well, what about what you said about X anti-cost allocation?

[00:48:19] Speaker 04:
And the commission didn't disown X anti-cost allocation, but it said that's a policy.

[00:48:23] Speaker 04:
Order 1000 is a policy.

[00:48:25] Speaker 04:
But when you come to the commission itself with a Section 205 filing and you make the showing that your proposal is just and reasonable and that it's

[00:48:35] Speaker 04:
that the cost allocation, the benefits are roughly commensurate with the costs, we have to approve that under section 205.

[00:48:42] Speaker 04:
And the fact that it would undermine certainty with regard to ex ante, that's a policy and the policy cannot override the statute.

[00:48:51] Speaker 04:
So when the commission itself is making the decision, then the ex ante becomes a secondary concern that doesn't win the day.

[00:48:58] Speaker 04:
But here, we're not talking about the commission making a rate determination, we're talking about the SPA

[00:49:04] Speaker 04:
the SPP board making the rate determination.

[00:49:06] Speaker 04:
So the commission's ex ante policy, it did find it one of several factors, not the deciding one, not the only one, but one of several factors that listed for why it had concerns about the discretion given to the board.

[00:49:17] Speaker 05:
Why do you say SPP not FERC is making the rate decision since it would be FERC approving this tariff as it initially did?

[00:49:25] Speaker 05:
That is FERC.

[00:49:25] Speaker 04:
But it's not a filing made with the commission to reallocate the costs.

[00:49:30] Speaker 04:
It would be allowing.

[00:49:33] Speaker 05:
systems were always sort of, there's a formula, there are principles, and then... It would be approving a process.

[00:49:41] Speaker 04:
And I think that's just why the commission treated it a little differently with regard to the concerns about ex ante.

[00:49:47] Speaker 04:
It has the same concerns throughout, but it finds they're overridden in the allocation proceeding because it can't deny the Section 205 filing by SBP to reallocate the costs on the basis of a policy when it meets the standards of the statute.

[00:50:03] Speaker 05:
That's how it explained it.

[00:50:04] Speaker 05:
And again, if I have all the orders.

[00:50:05] Speaker 05:
I probably should ask this of Murphy too, but if the byway facilities are already constructed and they were constructed on the assumption that they would be serving zonal load,

[00:50:22] Speaker 05:
Why is it that there are higher expenses associated with regional transmission over facilities that were built and budgeted as zonal facilities?

[00:50:38] Speaker 05:
I guess it's sort of the inverse of the question that I had for Ms.

[00:50:42] Speaker 05:
Murphy about why is it that traditional generation, fossil fuel generation, tends to do zonal service through highway, whereas

[00:50:51] Speaker 05:
these wind facilities are serving the zone through byway facilities.

[00:50:57] Speaker 05:
I'm not sure I completely understand the question.

[00:51:02] Speaker 05:
In the blue brief, there is a discussion of how Midwest and Sunflower customers are paying much higher byway costs.

[00:51:15] Speaker 05:
I don't.

[00:51:16] Speaker 05:
And other zonal customers elsewhere.

[00:51:20] Speaker 05:
And I guess I'm just wondering what the, if each byway facility is just constructed as a 300 megavolt facility, why would it become more expensive if it's being used for?

[00:51:36] Speaker 04:
It is not.

[00:51:39] Speaker 04:
Right.

[00:51:39] Speaker 04:
It's not my understanding that it has become more expensive.

[00:51:44] Speaker 04:
is there in order and I think I think and I don't want to speak for them, but my understanding of the issue isn't that.

[00:51:53] Speaker 04:
I don't think it's that they have more costs, although maybe more by way facilities are being built to accommodate that generation.

[00:51:59] Speaker 04:
That's possible, but certainly they're saying of the costs of that facility.

[00:52:05] Speaker 04:
We don't think the people in our zone should be paying 67% of it because, right.

[00:52:11] Speaker 04:
That's common.

[00:52:13] Speaker 04:
Unless more are being constructed because the need for more interconnections, that might be it.

[00:52:21] Speaker 04:
But if it's the same byway facility, I can't imagine it gets more expensive when it's connected to- Right.

[00:52:27] Speaker 04:
But I think Ms.

[00:52:27] Speaker 04:
Murphy will.

[00:52:28] Speaker 04:
Yeah.

[00:52:29] Speaker 04:
Charlie answers.

[00:52:29] Speaker 04:
Kind of, of course.

[00:52:30] Speaker 04:
Kind of guessing in that regard.

[00:52:32] Speaker 04:
I do want to touch on the benefit criteria point.

[00:52:35] Speaker 04:
To be clear, the commission has not abandoned that argument.

[00:52:39] Speaker 04:
It's not only the interveners that made it.

[00:52:42] Speaker 04:
The commission in the orders in the first rehearing order, paragraph 52, I believe, and the second rehearing order, paragraph 41, talked about that.

[00:52:50] Speaker 04:
And it is true, as it said in the tariff order, that both of these metrics are fine.

[00:52:56] Speaker 04:
The commission itself has approved

[00:52:58] Speaker 04:
uh, rate filings based on both metrics.

[00:53:02] Speaker 04:
So the commission said it's fine to use one or both is one, the other or both.

[00:53:07] Speaker 04:
Um, the problem as the commission described it impaired in the, in the two paragraphs I just cited is, is not that they're, uh, inappropriate to use.

[00:53:17] Speaker 04:
It's the, it really goes to the board's discretion and the transparency question.

[00:53:22] Speaker 04:
other parties need to understand what was the deciding factor, which criterion or combination of the two criteria mattered in this case, because you need to that concern would make sense if we had a reason to believe the two metrics would sometimes or often or maybe point in different directions.

[00:53:43] Speaker 02:
But if we don't know that,

[00:53:45] Speaker 04:
Well, I think the reason the commission has seen them both is because parties will sometimes do one or the other and not both.

[00:53:54] Speaker 04:
So I don't know that we have the data on, if you meet the first one, do you always meet the second one?

[00:53:58] Speaker 04:
It's more of a flexibility in how can you prove your case.

[00:54:01] Speaker 04:
Both of these prove something.

[00:54:03] Speaker 05:
I would really appreciate more clarity in terms of concreteness, the specific case you're imagining.

[00:54:09] Speaker 05:
Because if you have two different parties who have made the same kind of showing,

[00:54:14] Speaker 05:
I can't imagine a situation in which the SPP would treat them differently.

[00:54:19] Speaker 05:
For example, if both of them say, we're only going to do the integrated market placement, and they only make us showing us that.

[00:54:31] Speaker 05:
I mean, it would be arbitrary for and violate at least what we do when people make showings.

[00:54:38] Speaker 05:
We don't say, well, you made that showing, but we wish you'd made this other one.

[00:54:42] Speaker 05:
I mean, I don't think that's...

[00:54:44] Speaker 05:
That's a case in which SVP would treat them differently.

[00:54:48] Speaker 05:
So maybe one makes both showings and the other only makes the first.

[00:54:54] Speaker 05:
And if the first is inadequate as to both applicants and only the second makes the case, then people have made different showings.

[00:55:04] Speaker 05:
So the one who made the more robust showings should prevail in a way.

[00:55:08] Speaker 05:
There's nothing arbitrary about that either.

[00:55:10] Speaker 04:
Well, for one thing, we don't end up knowing

[00:55:13] Speaker 04:
What was decisive for the board?

[00:55:15] Speaker 04:
What did the board think?

[00:55:16] Speaker 05:
What they've submitted because you've had all this public know what was recommended to them.

[00:55:21] Speaker 05:
No, it was recommended.

[00:55:22] Speaker 05:
What was in their their application?

[00:55:24] Speaker 04:
I don't know what they were persuaded by ultimately, and they don't have to explain it.

[00:55:28] Speaker 04:
So the next party that comes along is not able to say that utility showed X percent under this metric or Y percent under this metric.

[00:55:38] Speaker 04:
And so do we.

[00:55:39] Speaker 04:
So we should be treated the same.

[00:55:40] Speaker 04:
They can't even make the case because what they proposed is public.

[00:55:45] Speaker 05:
So yes, black box or not, you can say we were similarly situated in every respect and we got treated differently.

[00:55:52] Speaker 05:
That would be a very strong 205 petition, wouldn't it?

[00:55:55] Speaker 04:
It would it would be useful.

[00:55:57] Speaker 04:
But but I think that the commission here was just the final decider.

[00:56:02] Speaker 04:
Can't be a black box.

[00:56:03] Speaker 05:
I mean, I'm not following and it would be really helpful if you could explain sort of a situation

[00:56:11] Speaker 05:
in which there's this kind of showing, and then a similarly situated applicant makes the same kind of showing and is treated differently.

[00:56:20] Speaker 05:
I'm having trouble even envisioning this coming up.

[00:56:24] Speaker 04:
Well, I think the problem for the commission is that in approving the process, the commission didn't think it could allow a process where it was theoretically possible.

[00:56:37] Speaker 04:
We don't have a concrete example because we only have one entity that went through this process at all.

[00:56:43] Speaker 05:
algebraic concrete, a hypothetical.

[00:56:45] Speaker 04:
And I'm afraid I don't think we have that because the commission likes to be flexible in how parties can show benefit.

[00:56:51] Speaker 04:
And that's why it has allowed different metrics in different cases, because that's what the party brought and the commission was able to look at it.

[00:56:59] Speaker 04:
But in setting up a flexible process where the SPP board could consider one or the other or both, say you don't quite make what the commission might have allowed under metric one,

[00:57:11] Speaker 04:
or quite what the commission might've allowed our metric to, but you think you can make a case based on both of them.

[00:57:16] Speaker 04:
You're allowed to do this, but we need to understand what happened so that the next party that comes along can understand what happened.

[00:57:25] Speaker 05:
So let me just ask, you're not asserting that the board would review an application under a methodology that the applicant didn't use.

[00:57:37] Speaker 05:
So they would review the showing that the applicant made and the applicant's choice.

[00:57:42] Speaker 04:
Well, they might have multiple showings in the recommendations from the staff.

[00:57:45] Speaker 05:
That's not what I'm asking.

[00:57:46] Speaker 05:
But they wouldn't say, oh, you've used the first methodology, and we prefer to look at your application under the second.

[00:57:56] Speaker 04:
We don't know.

[00:57:56] Speaker 04:
I mean, there are.

[00:57:58] Speaker 04:
Is that a possibility?

[00:58:00] Speaker 04:
As written, yes, I think so.

[00:58:03] Speaker 04:
And again, the commission may not think that's actually going to happen, but the commission is being asked to approve a process, an open-ended process that might be different in different cases.

[00:58:12] Speaker 04:
And if we're talking about extended into the future, the commission has a responsibility to judge the process itself.

[00:58:20] Speaker 04:
Right.

[00:58:21] Speaker 05:
So if it had said the APC methodology is preferred,

[00:58:27] Speaker 05:
So everyone has to try to show that.

[00:58:30] Speaker 05:
And if you think either that that may be inadequate or that you also want to use the integrated market methodology, you may do that.

[00:58:42] Speaker 05:
Would that create the undue discretion if you have a clear one, two priority so that we know everyone's being considered for whether they clear hurdle one

[00:58:56] Speaker 05:
And then if they've chosen to show.

[00:58:59] Speaker 04:
I think ultimately we just don't know what the decider thought of it.

[00:59:03] Speaker 04:
It's as though you went through an entire commission proceeding.

[00:59:06] Speaker 04:
Our whole docket is public except for rare exceptions of something that's privileged for some reason.

[00:59:11] Speaker 04:
The whole docket is public.

[00:59:12] Speaker 04:
Maybe we have technical conferences that are public.

[00:59:15] Speaker 04:
All sorts of filings by everyone.

[00:59:17] Speaker 04:
And then the commission doesn't issue an order.

[00:59:19] Speaker 04:
Now, we don't have that option because under the Administrative Procedures Act, obviously we have to, but you could say the entire commission process was public and all the suggestions that were made, all the evidence that was put in, everything was public, but the commission vote took place behind a closed door and we didn't issue a written decision.

[00:59:39] Speaker 04:
I mean, that's the difference.

[00:59:42] Speaker 04:
You know, when the commission makes a decision like this, everyone can look at it and we can come to court and people can say that we're wrong and the court can decide whether we were arbitrary and capricious.

[00:59:52] Speaker 04:
The next party that comes along can cite that as precedent and say, well, in that case, here's what the commission did.

[00:59:57] Speaker 04:
It's open, it's transparent, it's explained, it's... Did the SPP board vote by secret ballot on the base plan upgrade?

[01:00:09] Speaker 05:
Yes.

[01:00:10] Speaker 05:
And on the transformer waiver process?

[01:00:12] Speaker 05:
Yes.

[01:00:13] Speaker 05:
And why wasn't that an issue?

[01:00:16] Speaker 04:
Well, and the way the commission explained it in several places, and one actually is before this proceeding and the previous and the right rejection proceeding.

[01:00:23] Speaker 04:
So it's at J 34.

[01:00:25] Speaker 04:
But then it also said the same thing in our orders.

[01:00:28] Speaker 04:
And it talked about the base plan upgrade waiver process and the transmission waiver process.

[01:00:33] Speaker 04:
The commission said basically that it's a matter of scope, both the number of facilities that might be affected and the amount of costs.

[01:00:42] Speaker 04:
Because we're talking about potentially a number of facilities, and they're pretty large facilities, even by way facilities or not.

[01:00:49] Speaker 04:
Small so it's a lot of costs with the base plan upgrade waiver process and the transformer waiver process.

[01:00:54] Speaker 04:
They're both inherently limited by who's even eligible to think about it.

[01:00:59] Speaker 04:
The base plan upgrade waiver process has something to do with a review that SPP does that comes up with a very small universe.

[01:01:05] Speaker 04:
of projects that are affected.

[01:01:06] Speaker 04:
So the commission said it's limited in scope.

[01:01:09] Speaker 04:
The transformer waiver process narrowly pertains to dual voltage facilities.

[01:01:14] Speaker 04:
They're necessarily limited because there aren't that many dual voltage facilities and it's obvious to everyone what they are.

[01:01:20] Speaker 04:
And they tend to only be in certain places where one voltage meets another.

[01:01:23] Speaker 04:
So the commission said there are significant restraints on the scope.

[01:01:27] Speaker 04:
So, and again, that goes to the paragraph I had mentioned earlier in

[01:01:32] Speaker 04:
at J 501 502 of the different factors, including the ex ante issue.

[01:01:37] Speaker 04:
The commission again cited scope.

[01:01:39] Speaker 04:
The difference is scope.

[01:01:40] Speaker 02:
Why doesn't everything you just said apply to this?

[01:01:43] Speaker 02:
If we went through this and we learned that of all the many facilities for thought they were eligible.

[01:01:49] Speaker 04:
Well, because we're we're talking about a process that any by way facility could apply for.

[01:01:56] Speaker 04:
Maybe they wouldn't all get it, but we're also extending it into the future.

[01:01:58] Speaker 04:
So the commission and their larger and more expensive than

[01:02:02] Speaker 04:
These dual voltage facilities are talking about under the transformer today.

[01:02:05] Speaker 02:
It was something like 1% of facilities thought they could apply for a waiver.

[01:02:10] Speaker 02:
So going forward, 1% of all new facilities apply for a waiver just doesn't sound like well, we don't know that because the eligibility is more open than that.

[01:02:19] Speaker 04:
That may be how it plays out in practice, but the commission is having to approve a process that would be in place even if it turned out that that was wildly wrong and it was many more.

[01:02:28] Speaker 04:
Um, so the commission is, is very much looking at the process.

[01:02:33] Speaker 05:
And again, it's up to, it's up to the Southwest power pool to determine whether where and when, uh, new generation can be built that generate new transmission transmission.

[01:02:47] Speaker 04:
Yes.

[01:02:48] Speaker 04:
Not the gen the generation is driven by companies making their own decisions and then asking to interconnect

[01:02:53] Speaker 05:
and then SPP and its various members respond to that by building the transmission facilities that would have no concern if, for example, a wind field were constructed and SPP said, OK, let's build a highway transmission line from there.

[01:03:12] Speaker 04:
I mean, if they went through their planning process that's in their tariff, we have no reason to question that if they did it according to their process.

[01:03:23] Speaker 05:
Yeah.

[01:03:26] Speaker 05:
And in terms of the other two waiver processes, timing of those and any ex ante concerns that they raise, why are they different?

[01:03:40] Speaker 04:
I don't know as much about those processes, candidly.

[01:03:50] Speaker 04:
I think that they, I don't think they involve existing facilities as I understand them.

[01:03:57] Speaker 04:
They are facilities that are going to be built.

[01:04:02] Speaker 04:
If I'm wrong about that, it's just not in the orders, but the way it's described in the orders, it does seem to me that it's something that happens at the outset and not something that happens later.

[01:04:15] Speaker 05:
I had assumed otherwise because they're referred to as other waiver.

[01:04:18] Speaker 05:
processes.

[01:04:19] Speaker 04:
And waivers not waiver is a tricky term.

[01:04:22] Speaker 04:
But but I mean, even at the planning, you have something that's designated as highway or byway at the planning stage.

[01:04:28] Speaker 04:
So my understanding would be these would be saying, okay, we look like a byway because we're 100 to 300.

[01:04:34] Speaker 04:
But please treat us differently, because we fit this category.

[01:04:37] Speaker 04:
That's my understanding of how those because you again, if I'm wrong, I'm not aware of something in this record that that discusses that.

[01:04:46] Speaker 04:
So that was my understanding.

[01:04:49] Speaker 02:
Do you know if there's any decision for which SPP does have to issue a written decision and explain its rationale?

[01:04:56] Speaker 04:
Well, I mean, I don't know, but no, I don't know of one.

[01:05:02] Speaker 04:
But also, what was unusual here is that they don't usually determine cost allocation.

[01:05:09] Speaker 04:
Right.

[01:05:10] Speaker 04:
So I think to the commission, that was the difference, because we do have this section 205 responsibility to have

[01:05:18] Speaker 04:
Cost allocation decisions be transparent so that you don't end up with disparate outcomes.

[01:05:25] Speaker 05:
And nothing would stop FERC if it wanted to, if it thought this scope was going to be a problem, it could open a 206 proceeding and address this.

[01:05:34] Speaker 05:
It has the discretion to do that, but yes.

[01:05:36] Speaker 05:
I know nobody can force you to, but I mean, in terms of the concerns that maybe we're going to have a whole

[01:05:44] Speaker 05:
you know, it's going to upend the assumptions on which the planning was conducted in the first place.

[01:05:51] Speaker 04:
Right.

[01:05:51] Speaker 04:
And I mean, SPP isn't here to speak for itself, but I would think if there were many, many facilities that were actually applying for this, you would think that they would revisit their own cost allocation methodology.

[01:06:04] Speaker 04:
But yes, the commission would have that power.

[01:06:08] Speaker 04:
And that brings me, I do just want to make a couple points about standing, because of course, SPP did not petition for review.

[01:06:15] Speaker 04:
This is SPP's tariff, so if there were a party that was the object of this proceeding, it was SPP.

[01:06:21] Speaker 02:
Aren't they an intervener?

[01:06:23] Speaker 04:
They're an intervener, but they didn't seek review.

[01:06:24] Speaker 04:
So I'm just saying, if we're talking about standing,

[01:06:28] Speaker 02:
We have cases, including one called Amarin, in exactly the situation where the RTO comes in as an intervener, and we find they have standing.

[01:06:37] Speaker 02:
We don't even need to address the actual petitioners.

[01:06:40] Speaker 02:
So do you have an argument that SPP lacks standing?

[01:06:44] Speaker 04:
Well, we don't know, because they didn't really talk about harm.

[01:06:47] Speaker 04:
I mean, they're the object of the proceeding, but that doesn't necessarily mean that they incurred an Article III cognizable harm.

[01:06:56] Speaker 04:
They weren't even given argument time to explain, so I don't know.

[01:06:59] Speaker 04:
But so the argument we made on standing, I mean, the clearest argument we made on standing is just that this court has been saying in numerous cases for a couple of decades that you have to explain it in the opening brief.

[01:07:13] Speaker 04:
And the court has had cases where it said you didn't explain it in the opening brief.

[01:07:17] Speaker 04:
We're not going to let you do it later.

[01:07:19] Speaker 04:
and make up for it.

[01:07:20] Speaker 05:
But all your arguments about the potentially tremendous scope of this and the disruptive potential of it, that seems to at least undermine the standing concern.

[01:07:31] Speaker 05:
There's a lot of import to this going forward.

[01:07:35] Speaker 04:
Well, there could be, but we don't have any explanation of why these petitioners were harmed.

[01:07:42] Speaker 04:
An intervener.

[01:07:44] Speaker 04:
It didn't.

[01:07:45] Speaker 04:
I mean, it said that it was its tariff.

[01:07:48] Speaker 04:
that could be.

[01:07:50] Speaker 04:
But of course, the only, as we've discussed, the only facilities that anyone applied for, at least when this was in effect, have been reallocated by the commission itself.

[01:08:01] Speaker 04:
And given how much discussion we've had of the cost causation and

[01:08:09] Speaker 04:
the roughly commensurate and all of that.

[01:08:11] Speaker 04:
At a minimum, if the court were going to delve into those issues, we really should do it when all the orders are before the same court.

[01:08:19] Speaker 04:
Consolidate all the cases, because this is the process side, and that- You didn't file a motion to consolidate.

[01:08:25] Speaker 03:
You didn't file a motion to hold this case in abeyance.

[01:08:28] Speaker 04:
Well, we proposed a motion for abeyance to the petitioners, and they wouldn't consent to it.

[01:08:33] Speaker 04:
And since briefing was already underway, we knew that the court would defer it to the merits panel.

[01:08:37] Speaker 04:
We didn't think that filing an opposed motion when briefing was underway would be a useful exercise.

[01:08:43] Speaker 04:
So we proposed in our brief that it should be in abeyance.

[01:08:46] Speaker 04:
Because the first allocation order did come down after they had filed their opening brief.

[01:08:51] Speaker 04:
So briefing was already underway.

[01:08:53] Speaker 04:
But we certainly would support consolidating them.

[01:08:55] Speaker 04:
And we did want in late July, early August, we wanted to put it into abeyance then before the rest of us filed all our briefs and the court took its time today.

[01:09:06] Speaker 04:
But we couldn't get agreement on that.

[01:09:09] Speaker 05:
So I just wanted to circle back, because I was asking about the base plan upgrade waiver process and whether that had the same problem of disrupting patients that were established through the regional transmission

[01:09:25] Speaker 05:
cost allocation planning process.

[01:09:27] Speaker 05:
And in the commission's order denying rehearing, the commission says both the base plan upgrade waiver process and SPP's proposal in this proceeding relate to regional transmission cost allocation and bestow discretion upon the SPP board to grant a cost reallocation request.

[01:09:50] Speaker 05:
So it seems from that, and I'm looking at JA 499 paragraph 33,

[01:09:56] Speaker 05:
It sounds from that like the base plan upgrade waiver process would affect prior regional transition planning.

[01:10:02] Speaker 05:
And I guess I'm trying to understand.

[01:10:05] Speaker 05:
You said you think it's dealing with a more finite group of facilities.

[01:10:11] Speaker 05:
But it doesn't seem to be distinguishable in terms of ex ante or not.

[01:10:16] Speaker 04:
It is distinguishable in terms of ex ante for a different reason.

[01:10:20] Speaker 04:
And I apologize that I didn't pick up on that there.

[01:10:24] Speaker 04:
But two paragraphs previous.

[01:10:25] Speaker 04:
in paragraph 31.

[01:10:27] Speaker 04:
The commission does say that the base plan upgrade waiver process isn't subject to order 1000 rules regarding ex ante cost allocation because those are not facilities that are selected in the regional plan under the order 1000 process.

[01:10:47] Speaker 04:
They're selected for different reasons and are they based plan upgrades.

[01:10:51] Speaker 05:
I mean, in a way, it sounds a lot like what we have here.

[01:10:54] Speaker 04:
Um, there.

[01:10:56] Speaker 04:
I truly don't know.

[01:10:57] Speaker 04:
There's something different and more limited and they aren't planned as part of the regional planning.

[01:11:02] Speaker 04:
And these facilities are.

[01:11:04] Speaker 04:
And I wish I did know more about them.

[01:11:07] Speaker 04:
I'm sorry that I don't, but the commission did find them kind of a weird little category that it's on its own.

[01:11:13] Speaker 04:
They're identified in a particular study that SPP does that has nothing to do with all the rest of this.

[01:11:19] Speaker 04:
So they're kind of a quirky little, and that's why they have their own waiver process that I think no one- It might be helpful given how much the, you know, this is an issue.

[01:11:28] Speaker 05:
If you would submit a letter or something on that, just to explain.

[01:11:33] Speaker 05:
Okay.

[01:11:34] Speaker 05:
It's not clear.

[01:11:36] Speaker 05:
Okay, sure.

[01:11:37] Speaker 05:
I appreciate the reference to paragraph 31, but I think the paragraph 33 is somewhat in tension with that.

[01:11:45] Speaker 04:
Okay, yeah, yeah.

[01:11:48] Speaker 04:
Of course, 33 does emphasize the scope point, but I take your point on that.

[01:11:53] Speaker 04:
We'll submit something.

[01:12:03] Speaker 04:
report has nothing else.

[01:12:05] Speaker 04:
Thank you.

[01:12:32] Speaker 01:
I was told it should be chin height, so I apologize.

[01:12:39] Speaker 01:
OK.

[01:12:40] Speaker 01:
Thank you.

[01:12:42] Speaker 01:
Charlotte Taylor for intervener supporting respondent.

[01:12:46] Speaker 01:
I wanted to talk about standing briefly and then a couple more thoughts on the ex-ante cost allocation as it relates to the discretion that SPP's board has.

[01:12:56] Speaker 01:
Um, so on the standing issue with respect to these four transmission facilities, though the fate of those is going to be conclusively determined one way or another in the separate proceeding that is also before this court.

[01:13:11] Speaker 01:
It's not a case where this could go one way and there would still be a live controversy or another way, and the controversy will be terminated because the outcome of that is going to be either

[01:13:22] Speaker 01:
It is just unreasonable to reallocate the costs for constructing those facilities and running them on a regional basis, in which case Sunflower will have achieved all of the relief that it is seeking for any concrete controversy that's currently presented.

[01:13:35] Speaker 01:
Or the outcome will be it is not just unreasonable to reallocate, in which case I don't see any world in which it would be appropriate to go back to SPP and use the black box waiver process to seek reallocation of costs for the same facilities that has already been determined by FERC

[01:13:51] Speaker 01:
and potentially affirmed by this court would not be just and reasonable.

[01:13:55] Speaker 01:
So then standing would have to be based on the prospect of future use of this waiver process.

[01:14:02] Speaker 01:
I would note that SPP at Joint Appendix 546 has specifically said it does not foresee another future filing similar to the proposal before the commission.

[01:14:12] Speaker 01:
It also did not join any argument with respect to standing in future facilities in its own brief that it filed in reply.

[01:14:20] Speaker 01:
So SPP has not come forward saying we do think that there's going to be future use of this waiver process that justifies

[01:14:27] Speaker 01:
this court, Article 3 standing in this court, rendering a decision.

[01:14:32] Speaker 05:
You're speaking in terms of standing, but it seems clear that at the outset there was standing.

[01:14:36] Speaker 05:
And so the question really is a question of moodness.

[01:14:40] Speaker 05:
And the reason that's important, as you well know, is that the burden is on the defending parties to establish that the dispute is moot.

[01:14:51] Speaker 01:
So in the cases that say that there's a burden, a heavy burden to show mootness, those are cases where it's the defendant or respondent who's saying, you know, now we voluntarily cease the offending conduct.

[01:15:01] Speaker 01:
This is not that case.

[01:15:02] Speaker 01:
What's made this mood is that SPP with sunflower sort of in tandem went and initiated another proceeding in which all of that relief is going to be sought.

[01:15:11] Speaker 01:
So I don't think that there's I think, you know, this would be in the sort of typical mootness analysis where it's just standing in a time frame.

[01:15:18] Speaker 01:
And with respect to those four facilities, there's no longer standing because they've been sort of, you know, split off and there's going to be an up or down decision at the end of the day about reallocation for those.

[01:15:28] Speaker 01:
So then any standing would have to depend on the future use of this waiver process.

[01:15:34] Speaker 01:
And there, I think, Lujan has its very well-worn, but I think very helpful admonition that someday intentions without any description of concrete plans does not support a finding of an actual or imminent injury that the Supreme Court's cases require.

[01:15:49] Speaker 01:
And that's all that there is.

[01:15:51] Speaker 01:
In the record excerpts at Petitioner's site, if you look at that,

[01:15:54] Speaker 01:
you know, affidavit saying, you know, it is reasonable to expect that there are going to be future invocations of this waiver process, but there's no actual, you know, concrete case in which that would be, you know, that we know about that's coming down the road.

[01:16:09] Speaker 01:
And that's just not enough for Wuhan and for the purposes of standing.

[01:16:13] Speaker 01:
In the cases where the intervener, I recognize that SPP has intervener, if it has standing, then that would be sufficient for Article 3 purposes.

[01:16:22] Speaker 01:
But if you look at those cases, there's at least something that the RTO or similarly situated entity would have to do.

[01:16:29] Speaker 01:
So, for example, in the Ameren case that we cite in our brief for this proposition,

[01:16:34] Speaker 01:
The relevant RTO is going to have to go amend its tariff, right?

[01:16:37] Speaker 01:
But here we just have the rejection of a tariff amendment.

[01:16:40] Speaker 01:
So SPP will be not in a position to do anything.

[01:16:43] Speaker 01:
It just will not use this thing that was proposed.

[01:16:45] Speaker 02:
Why is that the way to look at what happened here as opposed to there was an amendment to the tariff allowed and the order on review now strips that authority out of the tariff?

[01:16:57] Speaker 01:
Because it was never finally approved, right?

[01:17:00] Speaker 01:
So there was sort of the

[01:17:03] Speaker 01:
that interim order said, you know, make this amendment and then, you know, we think it'll be okay.

[01:17:10] Speaker 01:
Then we sought rehearing of that and made arguments and others, right?

[01:17:14] Speaker 01:
And made arguments for why it was inappropriate for it to change its mind, but it was never accepted.

[01:17:18] Speaker 01:
And in other cases, such as the New Jersey versus EPA case that's cited, New Jersey was able to say, you know, on an ongoing basis, we're harmed by these record keeping requirements.

[01:17:27] Speaker 01:
There's upstream pollution that is affecting us.

[01:17:29] Speaker 01:
And so that's the kind of harm that that supported standing for sort of the

[01:17:33] Speaker 01:
you know, equivalently situated party.

[01:17:36] Speaker 01:
On the merits, on the X, I'm happy to talk more.

[01:17:41] Speaker 02:
So what would the practical result of that be?

[01:17:43] Speaker 02:
It would be SPP doesn't have this authority.

[01:17:47] Speaker 02:
So when there is another facility on the horizon, even if it's not enough, wouldn't be enough for standing, then they have to come and reinitiate this whole proceeding, or would they even be able to mount a collateral attack on?

[01:18:03] Speaker 01:
Well, I mean, first, I would just note that it's pretty well established that just because if you don't have standing now, the fact that that might frustrate review eventually doesn't create standing in the current controversy.

[01:18:15] Speaker 01:
But again, SVP doesn't believe that there is going to be such a case.

[01:18:19] Speaker 01:
And I think that's very relevant to the standing inquiry.

[01:18:22] Speaker 01:
But yeah, I think that the result would be that this waiver process would not exist.

[01:18:28] Speaker 01:
And it wouldn't be used in future.

[01:18:29] Speaker 01:
And so it would not be challenged on the merits.

[01:18:31] Speaker 01:
But that's a fact.

[01:18:34] Speaker 01:
You know, in large part because SPP did not come forward and say, yes, as regulator, we, you know, can we anticipate that this will be used and here's and here's why.

[01:18:42] Speaker 01:
On the question of the ex ante allocation on the black box.

[01:18:47] Speaker 01:
I just wanted to sort of take a step back and

[01:18:49] Speaker 01:
Think about how this is going to look.

[01:18:51] Speaker 01:
So if you go back to order 1000, the reason why that was adopted was already because there was anticipated expanded use of renewable energy sources and there was going to be a need for this kind of regional planning process.

[01:19:03] Speaker 01:
After that, we have SPP institutes, the highway by way methodology that is designed to take into account of precisely these types of considerations that there's going to be, you know, some facilities are going to be

[01:19:18] Speaker 01:
long-distance transmitting power.

[01:19:22] Speaker 01:
And everybody engages in a planning process with the highway-byway methodology in mind.

[01:19:28] Speaker 01:
Up above a certain threshold, it's a highway.

[01:19:30] Speaker 01:
In the middle, it's a byway.

[01:19:32] Speaker 01:
And it'll be allocated this two-thirds one-way.

[01:19:34] Speaker 01:
And then locally, it will be allocated for the lower voltage transmission projects.

[01:19:39] Speaker 01:
It will be allocated locally.

[01:19:41] Speaker 01:
Then everybody goes through that.

[01:19:43] Speaker 01:
We get to a result where something is allocated to be a byway facility, and SPP approves construction of it.

[01:19:51] Speaker 01:
Then you have a, I mean, who knows what this process is going to look like in terms of the amount of consensus, because there's so many different moving parts, right?

[01:19:59] Speaker 01:
So the SPP staff issues a report and recommendation.

[01:20:02] Speaker 01:
That goes to the SPP board and the RSC.

[01:20:09] Speaker 01:
The Cost Allocation Working Group issues a separate report and recommendation that goes to the Regional State Committee.

[01:20:16] Speaker 01:
All along the way, stakeholders are submitting comments on these public recommendations and are very likely to have disparate views about whether the factors are met.

[01:20:27] Speaker 01:
And then you get to the SPP's final determination.

[01:20:30] Speaker 01:
And it doesn't have to say why it came out one way or another.

[01:20:36] Speaker 01:
That's the process that in back, if you go back to ex ante, the sort of, you know, the planning, people won't know what's gonna be the outcome of ultimate cost allocation for the byway facilities.

[01:20:47] Speaker 01:
So that's why this sort of discretionary black box method undermines that key principle in order 1000.

[01:20:54] Speaker 05:
When did the allocation, when did the regional planning take place and how often does that occur?

[01:21:01] Speaker 01:
Um, so the regional planning process, I don't know this precise timelines, but that is the way in which new construction of new facilities, like the need is identified and then they are approved through this collaborative planning process.

[01:21:13] Speaker 05:
You don't know how often it takes place when this occurred.

[01:21:17] Speaker 01:
I think, I mean, I know I don't on an ongoing basis or certainly I mean, it's a regular the purpose.

[01:21:24] Speaker 01:
I mean, one of the main functions of SPP and under order 1000 is to identify the need for

[01:21:30] Speaker 01:
that we're going to be able to do.

[01:21:34] Speaker 03:
Transmission projects.

[01:21:35] Speaker 03:
How discretionary is proposed?

[01:21:38] Speaker 03:
Um.

[01:21:39] Speaker 03:
Tariff amendment anyway.

[01:21:41] Speaker 03:
I mean, it uses.

[01:21:43] Speaker 03:
Um you know, directory mandatory language.

[01:21:48] Speaker 03:
Senate.

[01:21:50] Speaker 01:
So it says that the three criteria, the only criteria that S P P is supposed to consider, but it

[01:22:00] Speaker 05:
Oh, yes, it does.

[01:22:01] Speaker 05:
It has to be decided based on the three.

[01:22:03] Speaker 05:
And therefore, if they're met, it has to be approved.

[01:22:05] Speaker 05:
If they're not met, it has to be rejected.

[01:22:07] Speaker 05:
That's why I read it.

[01:22:09] Speaker 01:
I mean, I think it doesn't say if they're met, it has to be approved.

[01:22:12] Speaker 01:
If they're not met, it doesn't get approved.

[01:22:16] Speaker 01:
It says it shall be based on those three criteria.

[01:22:17] Speaker 03:
If you say that's a clear reading of it, and we think that that's the way it should be read, then doesn't that solve the problem?

[01:22:23] Speaker 01:
Well, I think you still then have the problem of the fact that we're just really not going to know.

[01:22:27] Speaker 01:
So it's not going to be a scenario where the SPP staff makes a report and recommendation says, here's why we think the three criteria are met.

[01:22:35] Speaker 01:
And then the SPP board sort of votes yes, right?

[01:22:38] Speaker 01:
It's going to be a much more messy contested process in which you have a couple of different reports and recommendation and also input from all of these different stakeholders.

[01:22:48] Speaker 01:
So even if we assume, I think

[01:22:50] Speaker 01:
Then we get to the problem of, so what do you do with that?

[01:22:52] Speaker 01:
Even if we assume that SPP only considered those factors, it's going to be a contested factual question as to whether they were met, which study to rely on, why they were met.

[01:23:03] Speaker 01:
And then that's not what administrative process is supposed to look like.

[01:23:08] Speaker 01:
I think that then you get to the other side of it.

[01:23:10] Speaker 01:
It's like, well, why did SPP conclude that the benefit criterion was met?

[01:23:15] Speaker 01:
And we just don't know.

[01:23:17] Speaker 05:
The application and its analysis and the SPP staff's response to that is all in public record and there's a hearing at which stakeholders can show up.

[01:23:32] Speaker 05:
So the entire record indicating which way that points is transparent.

[01:23:39] Speaker 01:
But the reasons why, so again, as my colleague said, it's as if, you know, FERC went through the entire process of having everybody participate and file briefs and make a record, having a technical conference, and at the end of the day it just, you know, said sort of, you know, thumbs up, thumbs down.

[01:23:55] Speaker 02:
That's not the hypotheticals basically there's a staff recommendation and everything in the record seems to show all three criteria are met and all you get from spp is denied.

[01:24:06] Speaker 02:
And then not only do the current parties not know but future parties can't compare themselves to whatever happened in that proceeding in any intelligible way.

[01:24:14] Speaker 02:
Is that basically the point?

[01:24:15] Speaker 01:
Yeah, that's right.

[01:24:16] Speaker 01:
And that also undermines the predictability.

[01:24:19] Speaker 01:
So even if, in theory, you could then bring a 206 challenge to the outcome and say this is not just unreasonable, that's not how this is supposed to work.

[01:24:27] Speaker 01:
You're supposed to know in advance at the planning stage how any individual cost allocation is going to go.

[01:24:37] Speaker 01:
And then to the extent that there are

[01:24:40] Speaker 01:
overarching cost allocation or cost causation problems, then that's where 206 comes in again.

[01:24:45] Speaker 01:
And I think that's something that petitioners really sort of are sidestepping, which is, you know, there's not, there has never been a demonstration that the existing highway byway methodology is not achieving the rough approximation that cost causation requires in the aggregate.

[01:25:01] Speaker 01:
And in fact, the RCAR process, which just, you know, wound up didn't show any overall imbalance.

[01:25:09] Speaker 01:
So it may be permissible in the separate proceeding.

[01:25:14] Speaker 01:
There's a request to refer to approve as just and reasonable, a sort of specific fine tuning of that.

[01:25:23] Speaker 01:
But the overall process has to be presumed to be achieving appropriate cost causations.

[01:25:28] Speaker 01:
And even if you don't want to presume that, you can look at the RCAR analysis that just took place.

[01:25:34] Speaker 05:
Where is that when you say the RCAR analysis that just occurred?

[01:25:38] Speaker 05:
That's regional planning.

[01:25:40] Speaker 01:
So that's a that's built into the highway by way framework and it says every six years there has to be overall assessment.

[01:25:47] Speaker 01:
It looks at costs and benefits for each zone and comes up with a ratio that ratio gets out of whack.

[01:25:52] Speaker 01:
Then there's a process to apply for some relief.

[01:25:56] Speaker 01:
But so far that page number for.

[01:25:59] Speaker 05:
to support what you were just saying about how that showed there was no cost causation imbalance?

[01:26:06] Speaker 01:
Well, let me grab that for you at the end.

[01:26:15] Speaker 01:
So I think that isn't directly, I mean, we're not claiming that the RCAR

[01:26:25] Speaker 01:
analysis is directly at issue.

[01:26:28] Speaker 01:
In this record, though, here, the commission appropriately decided that this is just too discretionary, too uncertain.

[01:26:39] Speaker 01:
It's not going to create enough guidance.

[01:26:41] Speaker 01:
And so it is intentioned and trumped by the need for ex ante cost allocation determinations.

[01:26:49] Speaker 01:
In the other proceeding, I think you will hear more about the RCAR

[01:26:55] Speaker 01:
And I apologize, I'm not able to find in my notes the page number for the ARCAR description.

[01:27:00] Speaker 05:
Didn't the other waiver provisions that were mentioned in the papers before the commission and to us also get approved by secret ballot by the SPP board?

[01:27:15] Speaker 05:
Yes.

[01:27:16] Speaker 05:
And that's not problematic in terms of excess discretion because?

[01:27:20] Speaker 01:
So I think for slightly different reasons.

[01:27:23] Speaker 01:
First, I think both of them are much, much narrower in scope than the potential applications of this.

[01:27:29] Speaker 01:
This applies to any byway facility.

[01:27:31] Speaker 01:
It doesn't have to be linked to renewable generation.

[01:27:33] Speaker 01:
It doesn't have any temporal limitations.

[01:27:37] Speaker 05:
But it has the first two factors, which show an effort to identify which byway facilities are really serving zonal load.

[01:27:49] Speaker 01:
Right, but any byway facility is eligible.

[01:27:52] Speaker 01:
And just as a practical matter, the costs of constructing new transmission just far outweigh the costs for the transformer waiver.

[01:28:02] Speaker 01:
That's a very narrow subset of, it's just a smaller piece of equipment that connects a low voltage to a high voltage facility.

[01:28:08] Speaker 01:
And then for the base plan upgrade waiver process, again, that is not part of this regional

[01:28:16] Speaker 01:
planning process that is specifically subject to Order 1000's ex ante cost allocation principle.

[01:28:22] Speaker 01:
And so for that reason, it was not arbitrary and capricious for the commission to decide.

[01:28:27] Speaker 01:
When it's not even part of the Order 1000, it's not even under that umbrella.

[01:28:33] Speaker 01:
Or when it's in practical terms, a very, very small, not very relatively expensive subset of applications,

[01:28:41] Speaker 01:
It's not going to be, you know, overall problem in terms of our ex ante cost allocation policy to allow SPP to exercise some, you know, discretion and have that, you know, secret ballot sort of similar procedural requirements.

[01:28:56] Speaker 01:
But when it's something as potentially significant,

[01:28:58] Speaker 01:
as regional cost allocation for these very expensive transmission projects, then we do need to conclude that this is just too much discretion.

[01:29:06] Speaker 01:
And I would also just underscore that petitioners are trying, you know, they say, well, this is all that's changed is the composition of the commission.

[01:29:13] Speaker 01:
The composition of the commission was just that Chairman Glick stepped down, but it was the same.

[01:29:18] Speaker 01:
Two of the commissioners just thought it over and changed their mind, right?

[01:29:22] Speaker 01:
It's not a case where you had a sort of

[01:29:23] Speaker 01:
one new appointee and then it went from two, three to three, two, you had a very thoughtful concurrence from the commissioners Clements and Phillips saying, you know, they were on board, but then that's what rehearing is for.

[01:29:37] Speaker 01:
They, you know, they heard our arguments on rehearing and those of others who participated and they said, you know what, at the end of the day, as much as we supported this in theory, there's simply too much discretion for SPP for this to be permissible.

[01:29:49] Speaker 05:
It's hard to read the record and the background in terms of the amount of stakeholder involvement and think what's needed here is something with stakeholder involvement.

[01:29:58] Speaker 05:
It seems like there was many opportunities and, in fact, a great deal of stakeholder involvement.

[01:30:08] Speaker 01:
Yes, certainly, this is a process that everybody put a lot of thought into, but I think that was essentially saying, we appreciate that you've tried this, but when we finally got to the end and looked at how this was going to operate, it's simply not going to be allowable to do this where

[01:30:28] Speaker 01:
doesn't issue an opinion, doesn't provide any guidance.

[01:30:31] Speaker 01:
And so come up with something else, go back and work again with the stakeholders, and try again if you think that there's an overarching problem here.

[01:30:40] Speaker 01:
And meanwhile, there is the mechanism that's being used in the separate proceeding, which is that for individual facilities, if those are out of balance, then SPP can, as it did here, seek

[01:30:53] Speaker 01:
case by case, cost reallocation, show that it's just and reasonable.

[01:30:56] Speaker 01:
Of course, we disagree with that.

[01:30:58] Speaker 01:
But we're going to have that fight in the correct procedural posture, which is through presentation to FERC, which is the federal agency with congressionally delegated authority to make these decisions.

[01:31:10] Speaker 01:
And it can decide what's just and reasonable.

[01:31:11] Speaker 01:
And that will be reviewed by this court on a record that doesn't include a decision maker that didn't offer any explanation of its reasons.

[01:31:21] Speaker 01:
Thank you.

[01:31:28] Speaker 01:
Oh, sorry.

[01:31:31] Speaker 01:
For the RCAR, Carol, it's JA 235.

[01:31:34] Speaker 01:
Okay, thank you.

[01:31:37] Speaker 05:
Thank you.

[01:31:37] Speaker 05:
All right, does Ms.

[01:31:40] Speaker 05:
Murphy?

[01:31:41] Speaker 05:
She reserved no time, but we'll give her three minutes.

[01:31:43] Speaker 05:
Thank you.

[01:31:50] Speaker 06:
If I can make just a few points about standing and a few points about the merits.

[01:31:54] Speaker 06:
First on standing, I think it was quite clear in our opening brief that we had standing, we laid out not only that we are entities that are members of SVP, but also explained that Sunflower had sought those waivers while the existing process was in place and as

[01:32:10] Speaker 06:
And as we explained in our reply brief, there's not a moodness issue for the reasons we've already discussed on the existing facilities.

[01:32:28] Speaker 06:
don't take respondents to dispute that we have a live controversy there.

[01:32:31] Speaker 05:
She made a kind of a novel argument that this is not a case where FERC has said, oh, we're going to peel off these petitioners and resolve their problem and thereby moot the broader concern.

[01:32:48] Speaker 05:
It's a situation in which petitioners filed a separate petition.

[01:32:51] Speaker 05:
So in a sense, they peeled off.

[01:32:53] Speaker 05:
And then the question is, she, as I understand it, is saying,

[01:32:58] Speaker 05:
We shouldn't look at this as a situation in which the burden has shifted.

[01:33:01] Speaker 05:
The standing has sort of been gutted in this Section 205 proceeding by the petitioners getting the relief, the only pending relief that they are seeking in that other proceeding.

[01:33:13] Speaker 05:
And yes, that's not final, but apart from that, how would you respond?

[01:33:19] Speaker 06:
I mean, it is a novel argument that I don't recall seeing in their brief, but I'm not aware of any authority that really says that mootness is only your burden if you're a party who tried to affirmatively moot a case.

[01:33:30] Speaker 06:
In any case where you have mootness as an issue, it's always a high burden to satisfy mootness.

[01:33:35] Speaker 06:
I've never understood that to be a doctrine that's confined to circumstances involving something like, you know, voluntary cessation or whatever it may be.

[01:33:42] Speaker 06:
It's just a burden to demonstrate mootness because mootness

[01:33:45] Speaker 06:
is trying to essentially overcome the burden that's already been satisfied in the first instance of showing that you have standing.

[01:33:53] Speaker 06:
And I also heard a little bit different argument today about this idea that those 205 proceedings are kind of binary in the sense that they will definitively resolve this no matter what one way or another.

[01:34:05] Speaker 06:
I don't see how that seems right either, because it's absolutely open to challengers in that proceeding to make procedural arguments, not just substantive arguments.

[01:34:13] Speaker 06:
And they could easily be making arguments that they don't think FERC adequately explained its reasoning, whatever it may be, that could not definitively resolve the question of whether we're entitled to the relief.

[01:34:24] Speaker 06:
So those arguments are all on the table.

[01:34:26] Speaker 06:
That is all issues that can still be lied before this court.

[01:34:31] Speaker 06:
There's very much still a live dispute.

[01:34:33] Speaker 06:
Again, we absolutely think we got it right in those orders, but that's not the question for purposes of jurisdiction.

[01:34:38] Speaker 05:
Can I ask you why Sunflower or Midwest or SPP didn't file a 206?

[01:34:48] Speaker 06:
We think it makes sense that, given all of the stakeholder process that went into this, to first do what we believe we have a right to do, which is challenge FERC's rejection of this process, of this tariff amendment.

[01:35:01] Speaker 06:
I mean, it makes more sense to start with, let's defend

[01:35:03] Speaker 06:
the product of the stakeholder process, rather than throw all that out and go do a 206 and say, let's start from scratch and have FERC think about this differently.

[01:35:11] Speaker 06:
We absolutely have a right to come here.

[01:35:13] Speaker 06:
We've got here an effort to put in place a waiver process.

[01:35:17] Speaker 06:
We're the parties who would want to seek waivers.

[01:35:19] Speaker 06:
It makes a lot of sense for us to say, let's review whether FERC had adequate justifications for rejecting this process before we say, OK, let's kind of go at this through a completely different route, through a completely different set.

[01:35:33] Speaker 06:
of a different kind of petition in which you wouldn't be looking at all the work that was put into this to get where we are today.

[01:35:42] Speaker 05:
None of this came up in the RCAR process?

[01:35:47] Speaker 06:
Now, the RCAR process, I do want to make very clear.

[01:35:50] Speaker 06:
I mean, FERC explicitly rejected the reliance on this argument.

[01:35:55] Speaker 06:
And JA 331 in the approval order explained that the RCAR process is not something that was a basis to reject this.

[01:36:03] Speaker 06:
So that is not an argument that FERC has embraced.

[01:36:06] Speaker 06:
It never backed away from that.

[01:36:07] Speaker 06:
It doesn't make it in its brief.

[01:36:09] Speaker 06:
So really, there is a tannery problem with respondents introducing it in this particular proceeding.

[01:36:13] Speaker 06:
But again, as FERC explained in more detail in the separate

[01:36:17] Speaker 06:
allocation 205 proceedings involving the sunflower facilities.

[01:36:21] Speaker 06:
The RCAR process is just different.

[01:36:23] Speaker 06:
It's a six, you know, it's something that happens every six years.

[01:36:26] Speaker 06:
It's not something that requires there to be tariff change, amendment changes if you identify an issue.

[01:36:31] Speaker 06:
And it's looking at things at a different level.

[01:36:34] Speaker 06:
At the zonal level, it's not focused on identifying if there's particular facilities.

[01:36:38] Speaker 06:
who's costs aren't being adequately allocated.

[01:36:42] Speaker 06:
So I don't think it provides any basis to reject this order.

[01:36:45] Speaker 05:
I mean, I guess the question, another question is why wasn't that actively used by Sunflower Mubas SPP to

[01:36:54] Speaker 05:
to validate the results of this process?

[01:36:58] Speaker 06:
It's just not a process that looks at things the same way.

[01:37:00] Speaker 06:
It doesn't involve the same kind of criteria.

[01:37:03] Speaker 06:
It's just a process that's designed to kind of, the point of it is to be looking at on a going forward kind of 40 year basis is what is in place in the tariff kind of right from a big picture standpoint.

[01:37:15] Speaker 06:
It's not kind of looking at it at the detailed level that we're looking at here.

[01:37:18] Speaker 06:
And it only occurs on kind of a set

[01:37:21] Speaker 06:
timeline and all of that.

[01:37:22] Speaker 06:
So it just isn't designed to answer this question, which I think is why FERC has never accepted the argument that we should be doing this and kind of be constrained to do this through the RCAR process instead of by working through a proposed tariff amendment that identifies a cost causation problem and a solution to it that FERC has never denied would produce just and reasonable rates.

[01:37:46] Speaker 06:
And what I hear Burke saying today in defense of that, I mean, I think we're down to just transparency and discretion, because I understand Burke's argument to be that the ex ante concern is really only a byproduct of transparency and discretion, not an independent basis for rejecting this.

[01:38:03] Speaker 06:
And on the discretion point, as the questioning has gone through today, I mean, it's just not right to say that

[01:38:10] Speaker 06:
that the board doesn't have to grant a waiver if the criteria are satisfied or denied if they aren't.

[01:38:15] Speaker 06:
That's the necessary implication of saying your decision has to be based solely on whether all three criteria are satisfied.

[01:38:22] Speaker 06:
If you're acting on any other basis, you're violating the tariff.

[01:38:26] Speaker 06:
So what it seems to come down to is this whole kind of black box concept.

[01:38:30] Speaker 06:
But the problem with that argument is SPP's board does all voting in secret.

[01:38:36] Speaker 06:
That's part of its tariff.

[01:38:38] Speaker 06:
It was designed that way because FERC wanted SVP to ensure that the board had sufficient independence.

[01:38:44] Speaker 06:
That's why all votes on everything, including cost allocation issues under the other waiver processes we've discussed, are taken in secret without any kind of written explanation.

[01:38:55] Speaker 06:
And it's why I think if you look at the

[01:38:58] Speaker 06:
the reversal order.

[01:39:01] Speaker 06:
So this is the order where FERC's rejecting this.

[01:39:03] Speaker 06:
They nonetheless went out of their way to say, this is on JA 499 at footnote 62, that while the SPP vote board votes in secret, this feature of the board's governance is not an issue in this proceeding, nor do we suggest any deficiency in it.

[01:39:18] Speaker 06:
So they said they don't have a problem with the fact that the board votes in secret.

[01:39:23] Speaker 06:
And I don't really see how they could, since that's what the board does in every context.

[01:39:28] Speaker 06:
They've never taken issue with it.

[01:39:29] Speaker 06:
They've never said the board needs to issue any kind of opinion.

[01:39:33] Speaker 05:
And there's not really any problem with reviewing it in the same way that this court- They're not questioning it for what SVP appropriately does, but they're saying, and this is not the kind of thing that they should be doing.

[01:39:44] Speaker 05:
That's how I understand their argument.

[01:39:45] Speaker 06:
I mean, I just don't think it's not consistent with the history of how FERC has dealt with the SBCS board when they're exercising discretion in other contexts.

[01:39:55] Speaker 06:
And I don't think this argument that because they vote in secret, the whole process becomes a black box process really works in practice.

[01:40:03] Speaker 06:
I mean, just as this court, if a district court issues an opinion without a lot of reasoning,

[01:40:08] Speaker 06:
You don't just throw up your hands.

[01:40:10] Speaker 06:
You can look at a record and determine whether the decision is consistent with that record.

[01:40:16] Speaker 06:
And all of the transparency that was introduced into this process ensures that if you have the hypothetical scenario of everybody said the criteria is satisfied, there's nobody really even disputing it, and all of a sudden you get a denied ruling from the board, you're going to have an extremely powerful Section 206 application

[01:40:36] Speaker 06:
that's going to produce an opinion from FERC that says, it's actually 206 in that context, because if you're challenging the denial of the specific, how they acted on the specific cost, you'd go through that process.

[01:40:48] Speaker 06:
But you're going to get a FERC opinion that's going to say, no, no, the tariff says, if they're satisfied, you have to approve.

[01:40:55] Speaker 06:
And there's nothing in this record that gives us a basis to think it won't be.

[01:40:59] Speaker 06:
So I just don't think these concerns actually have any basis in reality.

[01:41:02] Speaker 05:
Thank you so much.

[01:41:03] Speaker 05:
All of you is a very helpful argument.

[01:41:07] Speaker 05:
Case is submitted.