By Tom Kleckner

OKLAHOMA CITY — SPP told members last week it and its Market Monitoring Unit will file separate reply briefs in response to FERC’s December order that found the RTO was suppressing investment signals by not allowing quick-start resources (QSRs) to set LMPs.

The commission issued a Section 206 order requiring SPP to change its Tariff to address quick-start pricing (RM17-3). FERC said it found the RTO’s approach to the resources’ pricing to be “inconsistent with minimizing production costs” and suggested several changes it could implement. (See FERC Drops Fast-Start NOPR; Orders PJM, SPP, NYISO Changes.)

Under a 206 filing — “fairly new to SPP,” said Market Design Director Richard Dillon — FERC can unilaterally make changes to an RTO’s or ISO’s rates, terms or conditions. The reply briefs are due by Feb. 12, with a final order expected within six months of that. The MMU will file its brief after the RTO. Neither Dillon nor MMU Executive Director Keith Collins revealed what they will say in their briefs.

“A quick-start unit provides a product other [resources] can’t,” Dillon said. FERC “wants the value of the product to be reflected in the LMP itself.”

In the meantime, SPP staff said it will continue its work on three open revision requests addressing QSRs. Securing the Markets and Operations Policy Committee’s unanimous approval last week of a revision request that corrected and clarified a previous revision was a first step.

Staff developed RR 256 as it began working on the previous revision request’s implementation details. It said the revision addresses a market inefficiency “inadvertently” created in RR 116 and eliminates a potential gaming opportunity. RR 116 was approved in October 2015 but has yet to be filed with FERC. Two other quick-start related Tariff changes, RR 137 and RR 142, have also been approved by SPP stakeholders but not yet filed.

Dillon said the revision requests are built on top of each other and reflect stakeholders’ “desires and corrections,” but they will not be filed with FERC until the commission rules on the Section 206 docket.

• RR 116: Provides the primary language for the new QSR logic and replaces “quick-start resource” with “offline supplemental reserve resource” for those resources supplying offline supplemental reserve.
• RR 137: Updates previously removed enhanced combined cycle language referencing QSR limits and the Tariff’s Appendix G for QSR changes.
• RR 142: Clarifies that QSRs are ineligible to register as multiconfiguration combined cycle resources.

In its order, FERC said SPP should:

• Commit and dispatch QSRs in real time consistent with minimizing production costs, subject to operational and reliability constraints;
• Remove the option for enhanced energy offers for QSRs that incorporate commitment costs in the incremental energy curve; and
• Consider both registered and unregistered QSRs in quick-start pricing to ensure prices reflect the cost of the marginal resource.

Golden Spread Electric Cooperative’s Mike Wise said the revision requests are unresponsive to the FERC order and “come very short of the mark.” Dillon admitted the changes do not cover everything in the 206 order, “but they’re moving in the same direction.”

Dillon said addressing all of FERC’s directives in the 206 filing would result in significant market changes for SPP. He pointed out SPP’s pricing is ex ante (planned), and that an ex post market (actual outcomes) would require major software changes.

“We don’t know what the final order will look like,” he said. “When we get an actual order from FERC, we’ll have another RR incorporating additional direction from FERC.”

Oklahoma Gas & Electric’s Greg McAuley said his company would prefer SPP file the revision requests, rather than wait on FERC. “The concern is stakeholders have already indicated a willingness to do this. As an entity with brand new quick-start resources coming online and available, what we’ve been working on is very important to us.”

“A bigger issue is credibility,” Dillon countered. “We used to have a reputation of knowing what we were doing and being really sharp. If we make some filings inconsistent with the very 206 filing FERC gave us, that calls into question we know what we’re doing. We don’t want to dig that hole any deeper.”

Complicating matters is SPP does not yet have a definition for QSRs in its Tariff, as do the other RTOs. Stakeholders have suggested a minimum run time of one hour or less to qualify as a QSR.