On March 27, 2025, FERC approved Southwest Power Pool, Inc.’s (SPP) tariff revisions to remove the opportunity for resources that self-commit during the Reliability Unit Commitment Process (RUC) to avoid contributing to RUC system-wide make-whole payments. In doing so, FERC found the revisions are consistent with cost causation principles.
On January 27, 2025, SPP filed tariff revisions to address the calculation of system-wide make-whole payment distribution amounts. In its filing, SPP clarified that the current tariff assesses a system-wide make-whole payment distribution amount, calculated at each settlement location for each asset owner, to fund RUC make-whole payments. SPP highlighted that the existing language only includes two categories of self-committed resources: those not offered in the day-ahead market and self-committed after its close, and those offered but not cleared in the day-ahead market and self-committed after the day-ahead RUC. However, it omits self-committed resources offered but not cleared in the day-ahead market and self-committed resources before the day-ahead RUC, thus excluding them from the charge calculation. SPP proposed to revise its tariff to include all self-committed resources following the close of the day-ahead market, regardless of their initial offer status. SPP argued that the revisions ensure that all self-committed resources are subject to the make-whole payment distribution amount calculation when dispatched at or below their minimum limit.
FERC accepted SPP’s proposed tariff revisions, finding that allocating make-whole payment responsibility to self-committed resources aligns with cost causation principles because resources that self-commit this way can increase the need for make-whole payments. Further, FERC found that without the revisions, the current language creates an exemption from the RUC make-whole payment distribution amount for resources that were offered but not cleared in the day-ahead market and then were self-committed between the close of the day-ahead market and the day-ahead RUC. By removing the exemption from the RUC make-whole payment distribution, FERC determined that SPP’s proposed tariff revisions would allow for costs to be effectively allocated and reduce incentives for resources to self-commit after the day-ahead market.
FERC’s order, issued in Docket No. ER25-1063 can be found here.
