SPP has launched a comprehensive review of its response to the recent severe winter storm that swept through its footprint, leading to the first rolling blackouts in the grid operator’s 80-year history.
“You will hear me use the term ‘unprecedented’ a lot today,” COO Lanny Nickell told the RTO’s Board of Directors and Members Committee Tuesday as he reviewed the mid-February events leading up to the controlled outages.
True to his word, Nickell referred to the “unprecedented” energy imports from neighbors, the “very cold, unprecedented” temperatures in its footprint and the “unprecedented” event as a whole.
With nearly 35 GW of generation capacity unavailable, SPP twice reached Level 3 energy emergency alerts and called for load sheds totaling nearly 3.3 GW Feb. 15-16 over a four-hour time period. The RTO reduced its EEA levels and returned to normal operations on Feb. 20. (See ERCOT, MISO, SPP Slough Load in Wintry Blast.)
While SPP’s experience paled in comparison to ERCOT’s, it recommended to the board that staff and stakeholders work together to review the grid operator’s performance during the event. The Members Committee was unanimous in endorsing the recommendation, which the board also approved.
“Staff will learn from this. There’s no doubt in our minds that our best can be better next time,” CEO Barbara Sugg said, “not only because we identified opportunities for SPP to improve, but we can improve those improvements.”
Sugg complimented SPP member collaboration with the RTO, especially when issuing conservation calls. She also said the grid operator wouldn’t have succeeded in minimizing the controlled outages without energy imports from MISO and PJM.
“Being a part of the Eastern Interconnection absolutely paid off for us,” Sugg said. “[The imports] were absolutely critical to us.”
The review is intended to assess SPP’s performance, transparently engage with stakeholders, find operational and market issues, develop recommendations for future improvements and raise “our joint capabilities.”
Nickell will chair the newly-formed Comprehensive Review Steering Committee overseeing and coordinating a process broken into five focus areas: operational, financial, regulatory, communications and a review of market pricing by the Market Monitoring Unit. The group will provide a final assessment and recommendations to the board in July.
The financial review will likely be of most interest to those concerned about SPP’s market performance, as numerous offers exceeded the RTO’s $1,000/MWh cap and prices peaked at $4,274/MWh during the event. Legal staff received FERC approval for two expedited tariff filings: an up to three-day delay to post settlement statements for the Feb. 13-16 operating days (ER21-1185) and a limited two-week waiver for load-serving entities’ collateral calls, normally required within two days (ER21-1193).
The commission noted SPP’s extreme weather conditions, operating challenges, EEA alerts and the potential for repricing in approving the requests.
“We’re very well aware of the settlement issues,” Sugg said.
CFO Tom Dunn will lead the team that reviews the settlement and credit issues and looks at make-whole payments.
The Monitor held a pair of calls last week to discuss the energy offers above the $1,000/MWh cap, which fall under FERC orders 831 and 831-A. The orders require that energy suppliers receive a reasonable opportunity to recover their actual costs of providing energy. The MMU will verify and calculate actual cost reimbursement for energy offer curves above $1,000/MWh.
Market participants have up to 35 days after the operating day to submit documentation for verification and the Monitor has up to 45 days after the operating day to evaluate the information, resolve questions and approve or reject the offers.
SPP is also the subject of a joint inquiry by FERC and NERC into the grid’s operational issues in the Midwest and South and a Midwest Reliability Organization review. (See “FERC, NERC Announce Joint Inquiry,” Slow Storm Restoration Sparks Anger in Texas, South.)
Missouri’s Public Service Commission is among the state regulators that have opened an investigation into the event and the resulting rolling blackouts and “extreme” natural gas price spikes. Staff will look into utilities’ preparation for the event, using analysis from RTOs, FERC, NERC, market monitors and other bodies.
Butler-Tioga Order 1000 Project Paused
The board and Members Committee also approved pausing the selection process for a competitive upgrade in southeastern Kansas while SPP staff completes a re-evaluation of the project.
The board in February authorized the 138-kV project over protests from Evergy, the incumbent transmission owner. The Kansas City utility has said the project will collide with regional planning efforts and requested a restudy Feb. 5, shortly after SPP issued a request for proposals. (See SPP Board to Consider Controversial Kansas Project.)
After reviewing Evergy’s request, staff determined a pair of transmission upgrades “germane” to the area were not included in the assessment that initially identified the upgrade.
“In consideration of those projects, do we know the [competitive project] is still an appropriate economic project to move forward?” Antoine Lucas, SPP’s engineering vice president, asked. “Based on the magnitude of the two upgrades, we have determined those are material modifications to the system and specific to the system that would be served by the transmission upgrade. We think there’s more assessment to do.”
Staff will re-evaluate the need for the Butler-Tioga project in fewer than 30 days, applying the same economic models used to identify the upgrade after adding the two omitted upgrades and new costs.
Lucas said staff would bring a final recommendation before the board during its April 27 meeting.
The RFP submission deadline will remain Aug. 2.
