By Tom Kleckner

KANSAS CITY, Mo. — SPP’s Markets and Operations Policy Committee last week failed to endorse a revision request that would have required non-dispatchable variable energy resources (NDVERs) to register as dispatchable variable energy resources (DVERs) within a multiyear transition period.

The Market Working Group’s (MWG) recommended revision request (RR272) will likely be appealed to the Board of Directors for its April 24 meeting.

A roll-call vote resulted in 62.3% of members favoring the measure, short of the necessary two-thirds majority. Transmission-owning members Western Farmers Electric Cooperative and Westar Energy, last in alphabetical order, cast the final two votes opposing the change to seal its fate, at least temporarily.

“I’m not saying I’m going to submit one, but I have a feeling there will be [an appeal],” said American Electric Power’s Richard Ross, who chairs the MWG.

NDVERs converting to DVERs would need to ensure they have the proper communication systems in place and the technical capabilities to reduce their output.

Ross said the Tariff change will increase market efficiency through the reduction of manual out-of-merit energy orders to mitigate constraints. The addition of dispatchable resources will only increase reliability, he said.

“Any time you’re taking actions out of market, you are creating inefficiencies,” said SPP’s David Kelley.

The Market Monitoring Unit expressed strong support for the Tariff change, saying it would help reverse the recent growth of negative real-time pricing. The Monitor’s recent quarterly report noted the frequency of intervals experiencing negative prices increased from 2.6% in 2015 to 7% through November 2017. (See SPP Market Monitor: Negative Prices May Require Rule Changes.)

“Negative pricing is a significant issue in our market,” MMU Executive Director Keith Collins reminded members. “Something that increases flexibility is at a premium, which we will highlight in our next report. Having non-dispatchable resources becoming dispatchable is an important piece of that recommendation.”

Collins said an SPP operations study revealed that “the more flexibility you have, you end up increasing [energy market] pricing” by reducing the magnitude of negative prices.

“All resources will benefit from that change, which will allow the integration of more and more variable resources in the system,” he said.

But Westar said the change would hurt SPP’s “market reputation.”

“NDVERs were a condition of several [market participants] agreeing to transition from [the Energy Imbalance Service to the Integrated Marketplace],” the company said in written comments. “If we go back on our word, will other [market participants] lose confidence in the stability of SPP tariff grandfathering and agreements made to prospective balancing authorities, asset owners and market participants considering the benefits of [joining] SPP as a stable settlement and market platform?”

Members accepted a friendly amendment to the revision, extending the registration deadline to January 2021.

The revision request exempts about 2,000 MW of resources without direct interconnection agreements with SPP or registered as qualifying facilities under the Public Utility Regulatory Policies Act. That drew concerns from members over whether Mountain West Transmission Group entities would be able to acquire similar exceptions.

“If the current language excludes those, it does appear to leave questions about those who joined SPP with a previous interconnection agreement, but not one with SPP,” said The Wind Coalition’s Steve Gaw. “Will they have to comply with this [requirement], or does the language exempt them, including the generators in the Mountain West region?”

“That’s exactly right,” said Oklahoma Gas & Electric’s David Kays. “When you’re being prospective about anyone coming in afterwards … I think it creates a hole in the Tariff, and I’m not sure that’s something we should be doing intentionally.”

Ross said there is no specific provision to carve out the Mountain West entities. “They’ll have to be prepared to comply with these requirements when they’re integrated into the SPP system,” he said. The MWG fashioned the change so that “anyone who wants an exception can make a [Federal Power Act Section] 200-whatever filing from that [requirement] at FERC,” he added.

Kelley pointed out that ISO-NE and CAISO have gone through similar conversions. He said the revision would help a grid that has “grown exponentially in size” with new wind resources and continues to hit new wind-penetration peaks.

“I go back to the overall problems we’re trying to address, which is overall market efficiency and reliability,” Kelley said. “When you hit those [constrained] situations, it’s imperative that the operators and markets have the tools to make the most efficient decisions on a systematic basis, rather than take out-of-market actions.”

The vote followed one of several vigorous discussions that livened up what staff and members had expected to be a perfunctory MOPC meeting.

“If you’re not careful, you’ll have an MWG meeting break out,” Ross joked.