SPP‘s Board of Directors last week approved a staff recommendation that resolves six months of uncertainty over the weighting of futures in the 2021 transmission planning assessment.

Staff said a 50/50 weighting of the two futures in the 2021 Integrating Transmission Planning (ITP) study would acknowledge the lack of consensus over each future’s relative probability. They also suggested that any project that could not be justified under a 60/40 weighting be highlighted for further consideration.

The Markets and Operations Policy Committee earlier in July rejected the 50/50 weighting and two other suggestions during its third fruitless attempt to approve an issue that left stakeholders flummoxed. (See “Members Unable to Agree on Weighting Futures in 2021 Tx Plan,” SPP MOPC Briefs: July 15-16, 2020.)

The Economic Studies Working Group (ESWG) in January recommended a 60/40 split between Future 1 and Future 2, respectively. The “business-as-usual” Future 1 reflects current trends, while the “emerging technologies” Future 2 case assumes that distributed generation, demand response, energy efficiency and energy storage will have a major effect on load and energy growth rates.

The Members Committee approved the recommendation 13-5, with a mix of transmission owners and users in opposition.

Stakeholders have struggled over Future 1’s assumption of 32 GW of installed wind capacity in 10 years and where the primarily renewable resources would be sited. SPP has said it will have 27 GW of wind capacity by the end of this year.

Oklahoma Gas & Electric’s Greg McAuley, one of five members to oppose the motion, advocated for a 70/30 weighting of the futures that leans more toward uncertainty.

“If you assume solar begins to expand at the same rate wind has over the last 10 years, is it reasonable to assume that expansion will take place in similar locations or be closer to load?” he asked. “These assumptions about resources, without associated firm transmission, kind of leaves us exposed. We will have built transmission to accommodate resources no longer available to the market.

“If you put transmission in the ground, we’re committed to it. Our customers will be paying for those facilities for a long time,” McAuley said.

SPP Vice President of Engineering Antoine Lucas pointed out that either weighting would not have affected the last three ITPs’ project portfolios.

“The best way to address this is to focus more on the sensitivity analysis of individual projects and the assumptions that drive the benefits for those projects,” he said. “If [a project] says more wind [will result], we believe we should run sensitivities around it and test the assumptions. We already do that, whether it’s the amount of wind or fuel prices.”

“What staff has proposed is to basically provide all of us with a bit of a safety net,” said Board Chair Larry Altenbaumer during the July 28 web meeting. “If there is something that is justified in the 50/50 weighting, but not in the 60/40, that allows us to dig into more detail to understand the ramifications, [then] this has taken us a step in the right direction, while recognizing there are more steps we need to take.”

Agreement on Competitive Project’s Path Forward

Stakeholders were able to reach an agreement over the suspension of a competitive project that SPP agrees would provide numerous benefits to the eastern edge of its footprint, where congestion remains a problem.

Several members wanted to lift the suspension and issue a request for proposals. However, staff cautioned the move would open a seven-day window during which they would have to issue the RFP. The RTO would also be within an 18-month window to issue funds for the project.

The 345-kV Wolf Creek-Blackberry project in Kansas and Missouri with Associated Electric Cooperative Inc. (AECI) was approved by the board last year and was included in the 2020 SPP Transmission Expansion Plan passed in January. Part of the 105-mile project, projected to cost $152 million, would be on the AECI transmission system and constructed by the cooperative. SPP cannot allocate funds to AECI without FERC approval.

The board in April suspended the project, pending negotiations with AECI and FERC’s approval of a cost-and-use agreement. Staff said AECI has reached a verbal agreement but has not yet provided SPP a signed document. (See “Directors Suspend Competitive Upgrade,” SPP Board/Members Committee Briefs: April 28, 2020.)

General Counsel Paul Suskie said several risks preclude lifting the suspension. “First, whether or not we can reach a timely agreement with AECI,” though he admitted an agreement is expected within days.

Other risks include FERC’s perspective after a pre-filing meeting with commission staff and potential protests that could delay a final order, Suskie said.

“Once an agreement is signed and filed at FERC, we’re in a much better position when we see whether any protests are filed,” he continued. “The risks are further minimized as we move further out on the timeline.”

Altenbaumer suggested members wait until the agreement is executed and filed with FERC “as soon as possible.” That would open a 20-day period for any protests, during which time SPP staff could prepare the RFP.

“One thing I’m concerned about is if challenges are made to that filing, and not knowing what those objections are or FERC’s action on that filing, and how they could undercut the AECI agreement,” Altenbaumer said. “We will then have been out there with an RFP that would not be a viable RFP.”

By late August, he said, “we’ll know … more information than where we are with the FERC filing.”

“We can work with you on trying to find a path forward,” said Evergy’s Denise Buffington, who helped pen a letter from four member utilities asking that the suspension be lifted. “Keep in mind this project is likely to be delayed even if the RFP is issued by Oct. 1. We are looking for an outside date of Oct. 1, and the path you have outlined will accommodate that.”

Evergy was joined by American Electric Power, Liberty Utilities and City Utilities of Springfield (CUS) in asking the directors to issue the RFP no later than Oct. 1. The signatories said the suspension’s initial rationale was that the cost of the AECI Blackberry termination point was unknown and noted that “these costs are now known, negotiations are complete, and the [agreement] … is about to be filed.

“Because of the critical importance of the proposed line and the benefits provided to SPP customers, the board should not further delay the RFP process,” the companies wrote.

“We own the Wolf Creek substation. It will take a minimum of four years to get work done inside the substation. The longer the delay on the NTC, the less likely we will get that in time,” Buffington said during the discussion. “We’re also worried there will be protest … we think the FERC proceeding should run in parallel with the RFP. All the information needed to issue the RFP is available to SPP today.

“As the letter points out, there are a bunch of reliability issues at stake,” she said. “This project was very, very close to being a reliability project. If it gets restudied, it could be a reliability project.”

Board OKs 4 HITT Recommendations

The board and members approved four recommendations stemming from last year’s Holistic Integrated Tariff Team report, bringing the total of completed recommendations to eight out of 21.

The board sided with MOPC and the ESWG’s recommendation to keep the ITP’s benefit/cost ratio for economic projects at 1.0, rather than increase it to a range between 1.05 and 1.25. Members approved the recommendation by a 15-5 vote.

Golden Spread Electric Cooperative’s Mike Wise, one of those opposed to the 1.0 B/C ratio, said transmission buildouts are “problematic” going forward when looking at benefits and costs.

“The costs are well-known ahead of time. The real issue here is [that] the benefits are estimated and not well-known,” he said. “[The benefits] are engineering estimates 40 years into the future. It’s really difficult to grasp the benefits that come from this.”

Wise found support from McAuley and Oklahoma Municipal Power Authority’s (OMPA) David Osburn.

“This is yet another example of where we are, as Mike would put it, doing this as usual, when business is anything but usual,” McAuley said. “At what point do we stop building transmission, so our transmission rates stop going up?”

“I want to stress the point [Mike] made is very valid,” Osburn said. “We make these decisions and invest in 40-year assets. We’re spending consumers’ money here, and I think they would like to see a benefit-to-cost ratio much greater than one, and one that doesn’t take 40 years to get there.”

While Dogwood Energy’s Rob Janssen and NextEra Energy Resources’ Holly Carias supported the motion, they agreed the motion warrants further analysis.

“Greg made a good point about looking out at the future and looking at economic projects more broadly,” Janssen said.

“I can’t disagree with Mike Wise and Greg that we’re in a different scenario,” Carias said. “We need to reconsider benefits.”

The board also signed off on the Cost Allocation Working Group’s white paper that evaluated SPP’s cost allocations for transmission projects between 100 and 300 kV that are primarily used to move power out of the local transmission pricing zones.

The Members Committee approved the motion to accept the white paper by an 11-5 vote. CUS, OG&E Transmission, OMPA, Public Service Co. of Oklahoma and Xcel Energy’s Southwestern Public Service Co. (SPS) opposed the motion.

The Regional State Committee earlier voted to endorse the white paper by a 6-5 margin.

SPS President David Hudson asked that the minutes reflect that the white paper “is a controversial issue.”

Kansas’ Sunflower Electric Power is among those that stand to benefit from the paper’s recommendation to establish a “narrow” cost-allocation review that regionally distributes the revenue requirements for the lower voltage levels. Sunflower CEO Stuart Lowry said that while the review would grant waivers from the methodology, “by no means is that a guarantee a waiver will be granted.”

“We would have to make that case before MOPC and the Board of Directors,” he said. “Bear in mind that action today does not mean byway cost-allocation relief will be granted to Sunflower or anyone else.”

Members unanimously approved two other HITT items, a staff report on essential reliability services (ERS) and other reliability services (ORS) and a revision request (MWG RR402) that improves the Integrated Marketplace by using near real-time economic dispatch to evaluate intraday reliability unit commitment for committing fast-start resources near real time.

The ERS/ORS report evaluated the region’s reliability challenges with a changing resource mix by conducting three separate engineering studies on reactive supply, primary frequency response and flexible capacity supply. The Market Working Group will now be asked to work on an ERS/ORS compensation mechanism.

Gaw’s Voice Becoming More Prominent

Advanced Power Alliance’s Steve Gaw, a ubiquitous presence at SPP meetings for more than 17 years, took some good-natured ribbing when his name mistakenly appeared on a Members Committee list as the board meeting began.

“Steve Gaw … that’s a strange name,” Altenbaumer said, taking a jibe at SPP’s newest member representative. “I’m not sure why he’s on the list, but we’ll let it go this time.”

A former chair of the Missouri Public Service Commission, Gaw was among the founding members of SPP’s Regional State Committee in 2003. He has since frequently voiced the wind industry’s concerns in stakeholder meetings, taking advantage of SPP’s practice of allowing non-members to add their input during discussions.

When Gaw commented during the ITP futures weighting discussion, he first asked whether he could be heard.

“I hear you fine. I’ve never had a problem hearing you, Steve,” Altenbaumer responded.

The APA, an industry trade association supporting renewable generation and energy storage in SPP and ERCOT, recently joined the RTO as its first alternative power/public interest member. As a member, the organization now has a vote and can officially join stakeholder groups. (See “Advance Power Alliance Now an SPP Member,” SPP Briefs: Week of July 20, 2020.)

SPP said a clerical error resulted in Gaw’s name being included among the Members Committee’s list of 21 names. The Corporate Governance Committee must first nominate Gaw as representing the alternative power/public interest sector and the nomination be approved before he can cast a vote.

“I can only speak, “Gaw said later, noting he was invited to the board and committee’s executive session.

No Virtual Roll Call

With more than 250 persons calling in to the webcast, SPP’s Dustin Smith, who facilitated the meeting, declined to take attendance through a roll call.

“That’s virtually impossible to do virtually,” he said.

Consent Agenda Passes

The board’s consent agenda included approval of:

• The Finance Committee’s 2021 operating plan, which includes developing a strategic plan for the next five years, implementing the HITT recommendations and completing generator-interconnection study requests from 2019 and before.
• MOPC’s approval of RR404, which further defines the resource adequacy requirements for demand response programs and behind-the-meter generation, and its recommendation for a $20.7 million cost reduction to Basin Electric Power Cooperative’s Multi-Kummer Ridge-Roundup project in North Dakota.
• A waiver of financial obligations under the membership agreement to East Texas Electric Cooperative for its transfer of transmission facilities and load from MISO to SPP and from SPP to ERCOT. The cooperative transferred facilities and load from MISO last year and is scheduled to transfer facilities and load to ERCOT between October and January. ETEC requested the waiver because it will wind up transferring more load into SPP than out, which would have triggered a partial termination.
• Staff’s recommendation for out-of-cycle re-evaluations for notifications to construct an Evergy Metro 161-kV project in the Kansas City area and an OG&E 138-kV project.
• Appointment of Omaha Public Power District’s Joe Lang to an open transmission owner’s seat on the Human Resources Committee. He replaces Nebraska Public Power District’s Tom Kent, who in March was promoted to CEO.