SPP stakeholders last week approved staff’s recommendation to withdraw a competitive transmission project that was opposed by the incumbent transmission owner, ending three months of ambiguity.

Staff said during the Board of Directors/Members Committee meeting April 27 that after re-evaluating the Butler-Tioga project, intended to replace aging 138-kV facilities in eastern Kansas, it was not the most cost-effective project and would actually increase congestion in the same corridor that supports SPP bulk system transfers.

“That creates some uncertainty around the options available in the area to create more value in the benefit-to-cost ratios,” Antoine Lucas, the grid operator’s engineering vice president, told the board and members.

SPP said that Evergy, the incumbent TO, was already rebuilding part of the original line and that a second new line along the same path would be redundant and likely costly to the region. It suggested that less costly transmission upgrade options should be evaluated within the RTO’s Integrated Transmission Planning (ITP) process.

The board approved the project in January as part of the 2020 ITP assessment over Evergy’s protests. The Kansas City-based utility said the project would collide with its use of the existing right of way to replace a 35-mile section of the old line, which was built in 1922 and has no shield wire.

Initially put forward as an economic project that would have required “wrecking out” the 99-year-old Butler-Altoona line, the project was removed from the portfolio for “further refinement.” When SPP determined it lacked regulatory authority to recommend the line’s retirement, staff instead recommended the Butler-Tioga greenfield project that bypassed the original line. (See “Board Approves Tx Project Soon to be Re-evaluated,” SPP Board of Directors/MC Briefs: Jan. 27, 2021.)

Evergy said it would immediately ask for a re-evaluation when the project went out for bids. That happened on Feb. 5. The board and members met again in early March and agreed to pause the selection process for the competitive update while staff restudied the proposal. (See “Butler-Tioga Order 1000 Project Paused,” SPP Launches Review of Storm Response.)

The Members Committee unanimously approved withdrawing the project. They had opposed the recommendation in January with their advisory vote, but the board differed.

Members also lent their unanimous support to — and the board approved — staff’s proposal to delay action on an ITP mitigation plan to relieve an engineering staff overloaded with three different transmission studies and several other high-priority initiatives.

Staff had originally proposed excluding public policy and economic assessments from the 2023 ITP’s scope. Because transmission planners are working on three different ITP studies at the same time, SPP said, that would help complete the 2021 assessment in the same calendar year. That study is three months behind schedule and in red status.

The Markets and Operations Policy Committee narrowly rejected the proposal earlier in April over concerns that the process, designed to study potential synergies between reliability and economic solutions, might overlook an economic project that could defer or replace a reliability project. (See “Overburdened with Tx Planning Work, Staff Looks for Help,” SPP MOPC Briefs: April 12-13, 2021.)

Joe Lang, with Omaha Public Power District, has since filed an appeal with the board, but it was not addressed during the meeting.

“This has not been something that’s been uncontroversial throughout the process,” Advanced Power Alliance’s Steve Gaw said. “This is a strategic matter that needs to be looked at in the scope of everything that SPP will be dealing with in the next few years — and is already dealing with.”

“We’re at a time in the industry where we don’t want to be in a position of having less information than more in long-term transmission planning,” ITC Great Plains’ Brett Leopold said. “It seems an inopportune time to reduce the scope of the ITP and take out economic planning with everything that’s happening in D.C. and the states.”

Lucas said the pause will allow staff to continue working on a mitigation option “that will gain a higher degree of stakeholder support” when it’s brought back to the MOPC and the board in July. The pause will require SPP to spend about $80,000 on consulting expertise, an amount that would grow to $425,000 if the delay extends to October.

“We’re comfortable that, if given some additional time, we can go back and work towards developing a solution that may gain more support from the stakeholder body,” Lucas said. “We’re more comfortable with that if it only extends to the July time period.”

Enel Green Power North America’s Betsy Beck recognized the planning team as “one of the hardest-working business teams in SPP” and asked whether management had considered bringing in more full-time staff.

“We’ve hired a number of new staff with the long-term goal of developing that staff to offset the consulting support,” Lucas said. “New employees might not have that same level of experience. When you’re doing a lot of training and development, it puts a strain on senior-level folks and experts, because they’re required to handle the work while also training the new hires. We believe we’ve hired the people we need to do the work; we just need to get them developed.”

Lucas said the process has been slowed by the number of employees working from home during the COVID-19 pandemic.

Pool Set for Order 1000 Selection Panel

The board and members approved a pool of 19 industry experts that would make up the five-person panels evaluating competitive projects under FERC Order 1000. Eight of the potential independent expert pool (IEP) candidates are new, and 11 are holdovers.

The new members included Jay Caspary and John Olsen, who retired last year from SPP and Evergy, respectively, and recent American Electric Power retirees Mark Workman, Bill Eakin, Joseph Hassink and Paul Johnson. That raised concerns among members about potential conflicts of interest.

Golden Spread Electric Cooperative’s Mike Wise opposed the motion, noting the presence of several IEP candidates that “happen to be from a competitor.” Southwestern Public Service’s David Hudson abstained.

The applicants are subject to the Oversight Committee’s established policy regarding the selection of recent retirees and the appearance of a conflict within a two-year cooling-off period.

“As part of the application process, the candidates have to disclose relationships with previous entities,” SPP’s Ben Bright said. “We do our best to get varied backgrounds. We don’t have any idea who will bid on a project when we seat the panels.”

Staff assured members that IEP candidates go through a second vetting process when a panel is chosen. Still, Oversight Chair Joshua W. Martin III said the committee would take offline feedback and return to the July board meeting with suggestions for improvement.

“The integrity of this process is critical. We need to tighten this up to the satisfaction of everyone,” Martin said.

SPP has completed two competitive project selections using its IEP process, most recently last year. The MOPC has charged a task force with reviewing and improving SPP’s selection process, as stakeholders did following the first competitive project’s award. (See Transource Tapped for SPP’s 2nd Competitive Tx Project.)

SPP to Issue Unsecured Notes

The Members Committee and board approved several Finance Committee recommendations, including the issuance of $28 million in senior unsecured term notes to fund capital expenditures in 2021 and extending the retirement date for a $30 million revolving credit facility to 2023.

Finance Chair Susan Certoma said the $28 million will help minimize an expected increase in administrative expenses. The fixed interest investment will require SPP to make regular interest payments and return the capital when the investment term ends.

Stakeholders also approved the committee’s recommendation to accept BKD’s 2020 financial audit, which found no material weaknesses, significant issues or audit adjustments, and to contribute $5.1 million to the SPP pension plan.

Separately, the board and members signed off on SPP’s new mission, vision and value-proposition statements, the first results from the Strategic Planning Committee’s effort to develop a five-year strategic plan.

The RTO’s mission is now “working together to responsibly and economically keep the lights on today and in the future,” while the vision statement calls for SPP to lead the industry “to a brighter future while delivering the best energy value.” (See SPP Strategic Plan Begins to Take Form.)

Edwards, Certoma to Stand for Re-election

Certoma and fellow Director Graham Edwards praised SPP’s new practice that has members of the board write letters of interest to serve another three-year term. The candidates then meet with the Corporate Governance Committee (CGC) in what amounts to an interview.

Edwards’ and Certoma’s terms expire this year, and they have both indicated a desire to stand for election.

“It really equipped us to be better able to re-elect them as board members,” CEO Barbara Sugg said.

“It made me, as a candidate, decide whether I wanted to apply for another term. It gave me a sense of how much I learned and how much I still have to learn,” Certoma said.

“I appreciate the confidence you have shown in me and Susan,” Edwards said. “Hopefully, we can live up to your expectations.”

Sugg said no decision has been reached on whether to conduct a search to replace Darcy Ortiz, who was elected in 2018 and is not seeking re-election.

Annual Report Goes Digital

SPP has made its 2020 annual report, which recaps the organization’s accomplishments, challenges and milestones over the last year, available in a digital format for the first time. The report highlights the RTO’s response to the COVID-19 pandemic and the February winter storm and its support to neighboring regions as they battled wildfires and hurricanes.

“They say crises don’t just build character … they reveal it, and we are immeasurably proud of what the challenges of 2020 revealed about our organization,” Sugg and Board Chair Larry Altenbaumer said in a letter to stakeholders.

“It’s really slick,” Sugg said of the report. “It’s showing we are embracing the technology that’s available to us today.”

L&O Joins the RTO

The board and members passed a consent agenda that included a CGC recommendation that SPP amend its membership agreement to accommodate L&O Power Cooperative, a member of Basin Electric Power Cooperative. L&O said it would sign the agreement, which would be identical to that of other Basin members that have joined the RTO, as soon as it was approved.

Other items on the consent agenda included:

• Evergy’s Jodi Hall to chair the Change User Forum for a two-year term;
• TWG RR435, which modifies the generator interconnection study process for upgrades required to mitigate every outage-based constraint;
• sponsored upgrade studies for East River Electric Power Cooperative projects involving a 3.6-MVAR capacitor bank, a tap replacement with a 115-kV substation and moving two 69-kV lines;
• a 26.3% cost reduction for a 115-kV SPS project, resulting in a $16.1 million baseline estimate;
• an 8.7% estimated cost increase, to $132.4 million, for Oklahoma Gas & Electric’s 345-kV Multi-Minco-Pleasant Valley-Draper economic project; and
• out-of-cycle re-evaluations of a 161-kV Evergy project for short-circuit breakers and Western Area Power Administration’s 115-kV Device-Devil’s Lake project.