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FERC Order ON RTO Adder Incentive for The Dayton Power and Light Company

Paul Dumais's picture
CEO Dumais Consulting

Owner and CEO of Dumais Consulting (www.DumaisConsulting.com) which provides expert ratemaking services to energy companies. Dr. Dumais is a ratemaking and regulatory expert who specializes on...

  • Member since 2018
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  • Aug 27, 2020
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On August 17, 2020, in Docket No. ER20-1068, FERC granted the Dayton Power and Light Company the CWIP and Abandonment incentives for a suite of projects resulting from the PJM planning process or subject to Ohio state siting approval.  In addition, Dayton had requested the 50-basis point RTO Adder as it is a member of the PJM RTO and has turned functional control of its transmission assets to PJM.  FERC  accepted the RTO Adder part of request and suspended it for a five month period, subject to refund and the outcome of a paper hearing to explore whether  Dayton has shown that its participation in PJM or another RTO is voluntary, as required for it to be entitled to the adder, or if such participation is mandated by Ohio law.  Initial responses to the questions in the Appendix (see below) of this order are due within 60 days of the date of this order and reply comments to the initial responses are due within 30 days of the initial responses.  FERC requested that parties respond to the following two questions:
 
1.   Is there an arrangement under which Dayton could withdraw from an RTO and comply with the Ohio law, while not being eligible for an RTO Participation Adder?  If so, please describe that alternative arrangement.  If not, please explain why not.
2.   Explain how any alternative arrangement identified in response to Question 1 would comply with the Ohio Revised Code section 4928.12, but would not at the same time qualify for incentives for joining a Transmission Organization under section 35.35(e) of the Commission’s regulations, 18 C.F.R § 35.35(e) (2019).  As part of your answer, please: (1) explain why such arrangement would not qualify for an incentive under section 35.35(e) of the Commission’s regulations; and (2) address each of the 9 requirements for such an arrangement specified in Ohio Revised Code section 4928.12(B) and explain how the arrangement satisfies each such requirement.

Commissioner Glick dissented in part because he felt that the record FERC is clear that Ohio law requires The Dayton Power and Light Company (Dayton) to be a member of a Transmission Organization.  As a result, there is nothing for the Commission to incentivize by awarding an additional ROE for Transmission Organization membership.  Consistent with Commission precedent, that alone should be more than enough for us to reject this aspect of Dayton’s filing.  Commissioner Danly concurred in the ruling on the RTO Participation Adder, even though the issue set for hearing on the RTO Participation Adder is a legal question that likely could be resolved without a hearing.  Although he would have ruled on that question now, he acknowledged that it is within the Commission’s discretion to set the matter for hearing instead.  Further, if he were to join in Commissioner Glick’s dissent, that would cause a 2-2 split on The Dayton Power and Light Company’s request for the RTO Participation Adder.  It would then go into effect by operation of law without further consideration of the legal question being set for hearing.  By concurring in the decision to set the RTO Participation Adder for hearing, that outcome was avoided.

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