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SECA Charges Which Killed Nascent Retail Markets Live On At FERC, Allocation To New Suppliers

September 17,2018



FERC granted, in part, a complaint filed by American Electric Power Service Corporation Midcontinent Independent System Operator, Inc. (MISO), claiming that MISO had failed to provide AEP and other PJM Interconnection, L.L.C. (PJM) transmission owners with $2.9 million in SECA payments ($4.8 million including interest) under a mechanism designed to recover revenues lost due to the elimination of through-and-out rates in the MISO/PJM region.

The complaint centers on the collection of SECA fees from three LSEs -- Nicor Energy, L.L.C (Nicor), Engage Energy America LLC (Engage), and New Power Company (NPC) -- that were defunct before being allocated SECA charges

AEP and MISO dispute how such charges should been treated given that the LSEs were defunct and what level of charges (specific or general) should have been allocated to replacement LSEs

FERC said that, "The replacement LSE serving the load associated with those sub-zones should have been assessed the generally applicable SECA charge for such load," as opposed to the sub-zonal SECA charges originally allocated to each specific defunct LSE

FERC noted that MISO’s supplemental answer in the proceeding indicates that MISO did not specifically identify replacement suppliers for the load originally served by Nicor, Engage, and NPC, and that MISO compensated PJM transmission owners for charges attributable to sub-zones that no longer existed through the generally applicable SECA mechanism. "Although MISO states that it provided PJM with access to accounting records which did not list Nicor, Engage, and NPC as Customers that paid sub-zonal SECA obligations, it is not clear from the existing record whether these three entities were treated as 'entities that do not exist' for the purpose of allocating the generally applicable SECA revenues among PJM transmission owners. If Nicor, Engage, and NPC were treated as 'entities that do not exist,' then the allocation method in Section III of Schedule 22 would have provided AEP with a larger share of the generally applicable SECA revenues than it would have received otherwise," FERC said

"Similarly, because MISO failed to identify replacement suppliers and assess them generally applicable SECA charges for the load they served during the transition period, we will set for hearing and settlement judge procedures the matter of the identity of the replacement suppliers for Nicor, Engage, and NPC, and how much, if any, additional generally applicable SECA charges should have been assessed and distributed to AEP and the other PJM transmission owners," FERC ruled

FERC set for hearing and settlement judge procedures the factual issues of the matter of the identity of the replacement suppliers for Nicor, Engage, and NPC, and how much, if any, additional generally applicable SECA charges should have been assessed and distributed.

See FERC's order for more details

Tags:
SECA   FERC   Wholesale   MISO   PJM   Pricing  

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