SPP last week offered stakeholders a deep dive into a Brattle Group analysis of the RTO’s Western regional market that projects $49 million in annual savings for current and new members.
According to the study, utilities participating as full RTO members in SPP’s Western Energy Imbalance Service (WEIS) market, scheduled to launch in February, would receive $25 million a year in adjusted production cost (APC) savings and revenue from off-system sales. Members in the RTO’s Eastern Interconnection footprint will benefit from $24 million in savings because of the market’s expansion, transmission network and generation fleet.
Brattle said SPP’s expanded RTO footprint will allow market participants to sell power into Arizona, New Mexico, Utah and elsewhere in the Western Interconnection while only paying a single wheeling fee, “which creates opportunity for increased market sales.”
The study analyzed the benefits of WEIS market utilities and the SPP RTO interacting across the DC ties in two future scenarios: an expanded RTO and the WEIS market. It looked far enough in the future to assume recently announced renewable energy projects would be energized, staff said during the Dec. 9 call.
The expanded RTO study integrated WEIS utilities into SPP RTO over the DC ties, with a unified Tariff for the entire footprint and optimized day-ahead and real-time DC ties. Brattle found extending SPP RTO to the WEIS footprint would reduce APC by $33 million/year and generate over $16 million/year of additional wheeling revenues. WEIS members would experience an APC reduction of $8.5 million/year and receive the $16 million/year of additional wheeling revenues; current SPP members would receive an APC reduction of $24.2 million/year.
An increase in market sales, mostly sold off-system to neighboring entities in the WECC, would account for much of the APC reduction, the consulting firm said.
Under the WEIS scenario, Brattle staff allowed coordinated real-time trading over the four DC ties in the WEIS footprint. Increased flows of low-cost power from SPP into the WEIS footprint would reduce APC by $16.1 million/year in the combined footprint; $9 million/year would accrue to WEIS members and $7.1 million/year to current SPP members.
The cheaper power would allow WEIS members to reduce production from higher-cost resources. SPP members would benefit from making more sales across the DC ties, and WEIS members would be able to substitute high-cost production for lower-cost purchases from SPP.
Basin Electric Power Cooperative, Deseret Power Electric Cooperative, the Municipal Energy Agency of Nebraska, Tri-State Generation and Transmission Association, the Western Area Power Administration and the Wyoming Municipal Power Agency (WMPA) will participate in the WEIS contract. With the exception of the WMPA, the utilities have said they are interested in placing their Western Interconnection facilities under the terms and conditions of SPP’s Tariff and becoming RTO members. (See Western Utilities Eye RTO Membership in SPP.)
Also last week, WEIS market participants briefly discussed a list of service flow constraints (SFCs) that raised concerns with SPP’s Market Monitoring Unit.
Staff told the Western Market Working Group (WMWG) during its meeting Dec. 10 that a list of SFCs, to be posted online, will only include the constraint’s name, its rating limit and the shadow price. The data will be a direct output from the economic dispatch engine.
The Western Market Executive Committee remanded a revision request back to the WMWG when the MMU said it would be difficult to post “on-the-fly” SFCs in real time. (See “WMEC Approves 6 WRRs,” SPP WEIS Stakeholders OK Final Test.)
