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SWEPCO asks for extension to answer lawsuit

by David Specht

Southwestern Electric Power Company (SWEPCO) has requested a two-week extension to answer a lawsuit filed by the City of Minden over its Power Service Agreement (PSA), according to officials at the city.

Minden filed the lawsuit with the Federal Energy Regulatory Commission (FERC) Feb. 28 seeking relief from “unjust and unreasonable” terms of the City’s Power Supply Agreement (PSA) with the company.

The lawsuit seeks for the FERC to issue the following judgments:

Reduce SWEPCO’s Return On Equity (ROE) from 11.1 percent to no higher than 8.20 percent. The lawsuit states the 11.1 percent ROE, a guarantee not subject to any market forces, is “unjust and unreasonable.”

Enforce the PSA’s requirement that SWEPCO “implement the effective hedging strategy for congestion charges for transmission service to Minden from SWEPCO’s location in the Southwest Power Pool.” Due to changes which took place in 2014, Minden is located in Midcontinent Independent System Operator Inc. (MISO) service area. Additionally, if the PSA does not require SWEPCO to implement the effective congestion hedging strategy, the PSA should be terminated, the lawsuit said.

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