Wind energy is on track to be SPP’s No. 1 fuel source this year, executives said last week during the grid operator’s quarterly stakeholder update.

Wind production averaged 11 GW for the month of June and has accounted for 33.8% of the grid operator’s fuel mix halfway through the year. During the last three months, SPP has set footprint records for the amount of wind energy produced (18.3 GW on July 17) and the amount of wind in the fuel mix (73.2% on April 27).

“The wind continues to blow,” SPP CEO Barbara Sugg told stakeholders July 27.

Over the last 12 months, wind has provided an average of 31.2% of the fuel mix, compared to 29.8% and 26.6% for coal and natural gas, respectively.

That has caused Bruce Rew, the RTO’s senior vice president of operations, to reconsider his prediction of when wind energy would become the No. 1 fuel source.

“I used to say wind would be our No. 1 fuel in 2021, but wind should become our No. 1 fuel this year,” he said. “It seems to be happening quite a bit faster than we thought.”

SPP currently has 24 GW of installed wind capacity, a figure it expects to grow to 27 GW by the end of the year.

Rew said the RTO’s electricity demand had fallen as much as 8 to 10% below forecasts as the COVID-19 pandemic took hold. Load has since returned to normal, he said.

In her CEO’s report, Sugg said cancelling in-person meetings and stopping business travel in March is expected to result this year in the over-recovery of $12 million in system administrative fees. That could contribute to reductions in SPP’s 2021 net revenue requirement, she said.

Sugg assured stakeholders the RTO is committed to remaining affordable and will continue holding most of its meetings virtually next year.

“Cost containment is a big item for me,” she said.

Sugg spoke from an empty conference room at the company’s corporate center in Little Rock, Ark. “It’s much better wi-fi than at home,” she said.

The corporate center has been closed to most of SPP’s staff since March. Sugg said she is hopeful of allowing employees to voluntarily return after Labor Day but said the campus won’t be fully staffed until sometime next year, “hopefully earlier, rather than later.”

Complicating matters is that Arkansas has become one of the country’s COVID-19 hot spots. The state has recorded more than 43,000 cases and 458 deaths through Aug. 1, with cases still trending up.

“You can’t go anywhere else unless you quarantine first,” Sugg said. “It’s not something we’re proud of.”

SPP has had several positive cases but no hospitalizations. The operations staff remains unaffected, Sugg said.

“Our employees are able to work from home, and work effectively,” she said. “It’s a lot of strain on our company, but things are going really well.”

RSC Approves Tx Allocation White Paper

Meeting before the quarterly stakeholder update, the Regional State Committee narrowly endorsed the Cost Allocation Working Group’s (CAWG) white paper evaluating the RTO’s cost allocations for transmission projects between 100 and 300 kV that are primarily used to move power out of SPP’s local transmission pricing zones

The RSC signed off on the white paper 6-5, with commissioners from Arkansas, Louisiana, New Mexico, Oklahoma and Texas in opposition.

SPP refers to lower-voltage economic and reliability projects as byway projects, with 33% of the costs regionally funded based on member utilities’ load-ratio share and 67% funded by the facility’s transmission pricing zone. Projects above 300 kV are considered highway projects and regionally funded according to load-ratio share.

Following a year of work, the CAWG report recommends establishing a “narrow” cost-allocation review so that the revenue requirements for certain facilities with byway voltage levels can be fully distributed on a regionwide basis.

The group also recommended that the review process include new and existing Schedule 11 facilities and that the review criteria be based on the use or expected use of the transmission facility. Schedule 11 rates reflect the costs of facilities whose costs are shared in whole or in part on a regional postage stamp basis. The rest of the costs are allocated to the facility’s transmission pricing zone.

The CAWG’s recommendations would apply to facilities with notifications to construct issued after the 2010 implementation of SPP’s highway/byway methodology. The methodology includes an exception for base plan upgrades below 300 kV and associated with wind generation. In that instance, 67% of the upgrade costs are allocated to the region, and the remaining 33% are directly assigned to the transmission customer requesting service.

The white paper would allow affected entities to request a waiver from the allocation methodology. Directly assigned facilities would not be eligible. The CAWG used the Tariff’s language on dual-voltage transformer waivers, based on their usage, as a model for the byway cost-allocation waiver process, noting only four transformer waivers have been requested.

The CAWG said that in some zones with more generation than load, upgrades identified through SPP’s transmission-planning process “are being used regularly on a more regional basis.”

“In such cases, allocating 67% of the cost of an upgrade may not be roughly commensurate with the benefits received and thus it may be more appropriate that such lines be regionally cost allocated,” the group said in the white paper.

“I keep hearing it’s a surgical approach and that not very many people will apply, but that’s only an assumption,” said Oklahoma Commissioner Dana Murphy, asking for more time to build consensus.

Texas Public Utility Commission Chair DeAnn Walker said two of her state’s three largest utilities have concerns with the issue and questioned whether they had been heard during the stakeholder process.

“I don’t disagree … that there has been a lot of work on this and that it has high potential,” she said. “I know concerns have been voiced to me that people believe a lot of entities will end up applying for this. I would like to see language added to try and make sure the words ‘narrow process’ are truly that.”

Al Tamimi, vice president of transmission planning and policy for Sunflower Electric Power, has spent the last several years pushing to resolve the issue facing utilities in wind-rich areas, like his in western Kansas. He applauded the CAWG’s white paper, which includes a Sunflower presentation, and noted the importance of revising allocation ratios based on “the ratio of power exported to other zones versus local-zone usage.”

“It’s actually the right solution at this moment,” he said. “We have pricing zones sitting out there in generation-rich areas that export three to four times their load through byway facilities. We’ve been working for three years on this. We brought data and we brought facts to come up with this conclusion. This process helps sustain the highway/byway methodology as it is.”

Albrecht Honored for 6 Years of Service

Stakeholders gave former Kansas Commissioner Shari Feist Albrecht a virtual send-off after six years on the RSC. Albrecht, having served eight years, cycled off the Kansas Corporation Commission after her term ended in March.

“I’m humbled and honored by the recognition. My success can only be measured [by] and credited to the people I was surrounded by,” said Albrecht, who presided over the RSC in 2018. “I found myself to be a much better commissioner, a better-informed commissioner, as a result of my service on the RSC.”

Walker, who has replaced Albrecht as the RSC lead on the liaison committee working with MISO regulators to resolve seams issues between the RTOs, put on her best Bear Bryant impression in honoring her former colleague. (See MISO, SPP Regulators Mull Seams Recommendations.)

“I agreed, reluctantly, to step into her shoes. I don’t think I’ll do as good a job as her, but I will try,” she said, borrowing a page from the legendary football coach and his equally legendary propensity for “poor-mouthing.” (“Bryant … elevated it to such an art that listeners would wink and smile at his dire pregame evaluations,” Sports Illustrated wrote in 1994.)

Albrecht’s RSC seat has been filled by Andrew French, who was appointed to the KCC in June. A commission staffer for five years, French has worked with the CAWG and RSC.

“He has SPP blood in his veins,” said SPP Board Chair Larry Altenbaumer.

Two Revision Requests Approved

In other business, the RSC endorsed a pair of revision requests and approved a clean audit of the committee’s 2019 budget.

RR373 includes base plan funding for transmission upgrades identified by SPP’s generator retirement process. The process includes screening criteria to filter out resources that do not require analysis before retirement. Resources that meet the criteria would be assessed by both planning and operations staff to identify potential system impacts.

The Transmission and Operating Reliability Working Groups agreed during the July Markets and Operations Policy Committee meeting to modify the measure’s language for a planned filing at FERC in October. (See “Work Continues on Resource Retirement Process,” SPP MOPC Briefs: July 15-16, 2020.)

Murphy addressed the use of reliability must-run policies that would keep a generator operating. She noted utilities tend to follow regulatory orders requiring a shutdown.

“Given a choice between breaking the law and breaking SPP’s rules, they’ll break SPP’s rules,” Murphy said.

RR404, previously approved by MOPC, defines the requirements for demand response programs and behind-the-meter generation to ensure their availability for meeting resource adequacy requirements and winter season obligations. The change addresses whether the resources are treated strictly as an offset of a load-responsible entity’s load or as a resource with capacity, specifying which resources can or cannot reduce load.

RSC President Dennis Grennan of the Nebraska Power Review Board said Arkansas’ Kim O’Guinn will chair a nominating committee that will bring the RSC’s 2021 officer candidates to the October meeting. Murphy and New Mexico’s Jeff Byrd will also participate on the committee.