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Farmington council adopts revised wholesale transmission rate tied to SPP RTO transition
Summary
Farmington Electric Utility staff recommended and the council adopted changes to wholesale rate 11 to align with the utility’s planned entry into SPP’s regional transmission organization, lowering the reservation charge and adjusting line-loss assumptions with estimated revenue impacts and a pending FERC filing.
Farmington Electric Utility System staff told the City Council the utility’s move to participate in the Southwest Power Pool (SPP) regional transmission organization requires recalculating wholesale transmission cost recovery for a small set of embedded wholesale customers.
Hank Harris presented the analysis and recommended revising wholesale rate 11. Harris said the recommended revision would reduce the reservation charge from $3.26 per kilowatt-month to $0.25 per kilowatt-month and reduce line-loss assumptions for those embedded segments; in his presentation he said line-loss assumptions should move from 2% to “one-half of 1%.” Harris described a consultant’s estimate that joining the RTO could produce an annual transmission revenue recovery on the order of several million dollars; the presentation included a consultant figure of roughly $4.7 million in capital recovery for transmission assets outside the RTO and an estimated reduction of about $500,000 in direct revenue from the two wholesale customers, yielding a simplified net improvement near the presenter’s $4.2 million figure once other market costs are considered.
Harris cautioned that the Federal Energy Regulatory Commission (FERC) will evaluate the filed rate of return and that the exact outcome depends on FERC’s review of the SPP filing. He said the utility had filed recommended recovery levels with FERC and that the SPP filing was submitted to FERC the same day. The presentation proposed making the rate changes effective April 1, 2026—the expected RTO go-live date—and noted a 60-day notification requirement to affected customers.
Councilors asked whether FERC approval was likely; Harris said consultants had tested the approach and the utility felt confident but could not guarantee FERC’s outcome. Councilor Logan moved to adopt the resolution updating rate 11 with a clerk-provided effective date of April 1, 2026; the motion passed on voice vote.
The council adopted the resolution. The presentation and resolution did not alter existing contracts directly; Harris said affected customers will receive formal notice within the required period and that the ultimate revenues depend on the FERC decision and market congestion costs.
