KANSAS CITY, Mo. — SPP’s Markets and Operations Policy Committee endorsed a rule change to address member concerns that the Integrated Transmission Planning (ITP) Manual doesn’t appropriately capture purchase power agreement (PPA) pricing in the adjusted production cost-benefit metric.

RR276 removes the PPA pricing from the variable operations and maintenance (VOM) methodology language in the ITP Manual and replaces it with a VOM cost of $0/MWh for all wind and solar units. The Economic Studies Working Group (ESWG) had proposed a VOM cost of $8/MWh but revised the number following stakeholder discussion.

The ESWG said RR276 better captures the “benefits of incremental transmission investment when reducing economic curtailment or congestion costs associated with transmission customer purchases from renewable generation resources under ‘take or pay’ power purchase agreements.”

The MMU said the zero VOM cost is a “much closer reflection” to the actual number based on its review of all mitigated offers resources have applied for in the SPP market.

“We were sort of surprised to see a number that high,” Collins said referencing the $8/MWh proposal. “It does not in any away affect the bottom prices we have on file. Zero is more reflective of the true number.”

The Nebraska Public Power District’s Tim Owens, the ESWG’s vice chair, said the revision request is necessary as the 2019 planning cycle begins. He said it is an interim solution to objections over proxy PPA pricing, and the group will continue to work with staff on improving the economic studies process.

“We are trying to address this one particular input,” Owens said. “We fully understand that this is not the end-all assumption. Setting it to zero or eight won’t in and of itself address all of these other issues. We’re just focusing on what we’re going to do for the 2019 ITP assessment.”

“I see the benefits of a zero VOM, but my major concern is fixing the process,” said Southwestern Public Service’s Bill Grant.

The measure cleared the two-thirds approval threshold at 68.3% in a roll-call vote. Transmission-using members (TUs) voted 36-7 in favor of the revision, overcoming a 9-8 split by transmission owners.

Members Hash out Charter Revisions by Working Groups

Members revised and endorsed a Transmission Working Group (TWG) charter revision to increase its membership, proposing that the group include all TOs and an equal number of TUs.

The TWG had proposed increasing its membership from 24 members to 26, with no more than 14 TOs or TUs at any one time. Several members expressed concerns about the group handling compliance issues without representation of all 17 TOs.

“It’s very important that the votes presented to MOPC are reflective of the full membership, and that MOPC has that guidance when they vote,” Grant said. “You don’t want the unintended consequences because of what that one person could come up with.”

Sunflower Electric Power Cooperative’s Al Tamimi pointed out his company is one of the TOs currently excluded from the TWG. “If I don’t get a seat, I don’t want this group handling compliance matters,” he said.

Other members pushed back against the membership expansion.

“If we’re going to do this for the TWG, what other groups now can be expanding their membership?” asked Oklahoma Gas & Electric’s Greg McAuley. “With the Mountain West coming with another potential 10 TOs, this group is going to be enormous. I don’t know what you’re going to get done.”

TWG Chair Travis Hyde, of OG&E, said the group’s proposal was a compromise as it tried to seat all 17 of the TOs listed under SPP’s bylaws. He said the TWG has tried to maintain a balance between TOs and TUs but has realized its attempt was becoming unwieldy.

“If we did, we’d get to [34],” Hyde said. “That’s too big for a technical group like we are.”

SPP COO Carl Monroe said the RTO’s bylaws require all stakeholder groups to be balanced, “unless your charters are accepted with some other requirement.” He said the organization uses TOs and TUs as “shortcuts,” in the absence of member-type definitions in the bylaws, but recommended the groups change their governing documents if they disagree with the shortcuts.

“You can change the charter, but all these changes have to go through the Corporate Governance Committee,” he said. “If we had half this many people in a room trying to make the decision, we wouldn’t have the issues we do as the MOPC together.”

Kansas City Power & Light’s Denise Buffington, a member of the CGC, clarified Monroe’s comments. “The bylaws don’t explicitly say stakeholder groups should be balanced. That’s just the way it’s always been interpreted,” she said.

The MOPC also endorsed a change to the charter of the Regional Tariff Working Group that gives all TOs representation, with an “up to” equal number of TUs. The RTWG said it has a longstanding policy that all TOs be represented, as their facilities are under SPP’s functional control “for the provision of transmission service, planning, interconnections and recovery of revenue requirements.”

Members did strike a provision that would have limited members with affiliated relationships to a single vote on the RTWG.

“I am opposed to putting affiliate restrictions in any charter. They’re not in any other charter,” Buffington said. “What I fear is you put the restriction in one charter, then everyone is going to come here and ask for similar language.”

Monroe suggested it would be worth the governance committee’s time to discuss affiliate restrictions and the number of working group members.

“It’s not the number of people, it’s the chair getting organized and ensuring people express their opinions,” he said.

The MOPC also approved modifications to the Model Development Working Group’s (MDWG) charter. The stakeholder group said the changes reflect current practices and adds references to assignments from the TWG, MOPC and Board of Directors and the development of models for reliability standard TPL-007-1 (Transmission System Planned Performance During Geomagnetic Disturbances).

The MDWG reports to the TWG and is responsible for the coordination, development and maintenance of SPP’s transmission system planning models.

OG&E Raises Concerns over Third-party Tx Line Upgrade

Members voted to table a sponsored upgrade of an OG&E transmission line in northern Oklahoma, accepting the utility’s request to give it more time to work out legal issues.

The work would be sponsored by EDF Renewable Energy, which wants to upgrade terminal equipment and rebuild an 11-mile, 138-kV line near Ponca City and its 154-MW Rock Falls wind farm, which became operational in December. EDF has said it will seek cost recovery through SPP’s Attachment Z2 revenue crediting or incremental long-term congestion rights.

EDF presented the project to the TWG under SPP’s new transmission planning process. The TWG approved the project in March after determining there wasn’t a reliability impact. SPP Vice President of Engineering Lanny Nickell told members he was unsure whether the upgrade has ever been studied as an economic project in previous RTO planning studies.

OG&E pushed back against the project, saying it has engaged outside legal counsel to understand the consequences of having a third party pay to rebuild a line. McAuley noted his company is already recovering costs on the line through an annual transmission revenue requirement, but it is unclear what will happen to its depreciation or how to expense additional maintenance costs following the rebuild.

“At first blush, someone comes in and says they want to rebuild a line, you say, ‘Fine. What’s the big deal?’ That’s probably what the TWG said,” McAuley said. “We have an existing line with an ATRR that’s recovering revenue. What happens to that? This has opened up a broader set of legal questions we don’t have answers to yet.”

EDF did not have a representative in the room to participate in the lengthy discussion, but the company’s transmission strategy director, Omar Martino, was eventually patched in to answer questions. He said EDF understood the region is facing congestion issues, but that no one had committed to the upgrade.

“To the extent we can alleviate congestion and protect ourselves from congestion pricing, the upgrade would provide sufficient relief for the wind farm,” Martino said. EDF hopes to see the upgrade in place by June 2019.

“Bottom line, we have a whole lot of questions and not many answers,” McAuley said, suggesting a revision request be drafted if SPP’s Tariff doesn’t supply enough guidance. “I think it is precedent setting, and we might want to take a little bit longer look at it.”

SPP determined that while the vote was to determine MOPC’s endorsement, RTO staff still have the responsibility to bring the proposal to the Board of Directors for its approval. In the meantime, OG&E’s counsel will meet with SPP’s legal staff to resolve its questions.

Six members voted against tabling the proposal and two abstained.

Members did endorse a second sponsored upgrade, the addition by City Utilities of Springfield of a second 161/69-kV transformer at its James River Power Station. The upgrade has a June in-service date.

Members Approve Three-Stage Process for GI Requests

Members easily approved a task force’s white paper that overhauls SPP’s process for handling generator interconnection requests. BP Wind Energy North America abstained from the vote.

The Generator Interconnection Improvement Task Force’s (GIITF) paper outlines a three-stage process comprising a thermal and voltage analysis, dynamic stability and short-circuit analysis, and a facilities study.

An increasing security deposit is required before each step, beginning at $2,000/MW and escalating to 10% and 20% of allocated upgrade costs, respectively. A decision period follows each stage, allowing transmission customers to determine whether to proceed to the next step following receipt of study reports.

The GIITF’s work replaces the current convoluted process, which involves feasibility, interconnection and system impact, and facilities studies, bidirectional work flows, and mandatory and optional steps.

Tamimi, the task force’s chair, said the simplified process will be easier for SPP to administer and for customers to understand and navigate. He said most upgrades will be identified in the first stage, allowing customers to make informed decisions before committing to a lengthy and expensive stability analysis.

Tying financial security to upgrade cost allocation will encourage customers to weigh the risks of proceeding at an earlier stage, reducing the number of requests that are withdrawn late in the process, Tamimi said.

The task force was created early last year to address SPP’s overloaded interconnection queue and requirements that could emerge from a rulemaking FERC opened in December 2016 to consider changes to its pro forma large generator interconnection procedures (RM17-8). (See FERC Proposes Changes to Interconnection Rules.)

The commission has not approved any changes in the rulemaking. Earlier this month, however, FERC staff conducted a two-day technical conference to examine how SPP, PJM and MISO coordinate interconnection studies on projects near their seams, after the commission said their practices may not be just and reasonable. (See Developers, Tx Providers Seek Direction on ‘Affected Systems’.)

The MOPC in 2017 granted the task force a one-year extension to develop a replacement for SPP’s current interconnection process.

Ciesiel Delivers Final SPP RE Report

Members gave Regional Entity President Ron Ciesiel a round of applause following what may have been his last update to the MOPC.

SPP’s RE has been dissolved and is in the process of transitioning its data and responsibilities to the Midwest Reliability Organization and SERC Reliability, where its 122 registered entities have been reassigned. (See NERC Board Approves Dissolving SPP Regional Entity.)

Ciesiel said he hopes to complete the work by July. He said 10 of the 17 remaining RE employees have found jobs within the RTO or elsewhere, noting cybersecurity personnel are “in great demand.” Two others have decided to retire.

McAuley complimented Ciesiel and his staff on their work, saying, “While we didn’t always agree with the audits, they were done well.”

Tx Planning Improvement Task Force Delivers Final Work

The Transmission Planning Improvement Task Force wrapped up three years of work by winning the MOPC’s unanimous endorsement of its 20-Year Assessment Manual, which now goes to the board for its final approval.

The assessment is intended to develop an extra high voltage (300 kV and above) transmission road map for the SPP region, with candidate projects helping inform shorter-term planning assessments. According to the manual, “The assessment will result in the identification of projects that economically deliver energy within the SPP region while addressing a reasonable range of future industry uncertainty.”

The manual lays out roles and responsibilities within the 20-year assessment, study process and data inputs. The manual has been approved by the task force, the TWG and the Economic Studies Working Group.

Unanimous Consent Agenda Includes 9 RRs

Members unanimously approved the consent agenda, which included the re-baselining of a Nebraska Public Power District 69- and 161-kV project, from $37.8 million to $27.5 million; removing OG&E remedial action schemes at the Centennial and Crossroads wind farms; and nine revision requests:

• GIITF RR267: Eliminates the “standalone scenario,” which considers each interconnection request by itself, from the definitive interconnection system impact study process. This will free SPP resources to focus on the binding cluster study results, permitting results to be available earlier than they currently are. Staff will provide the standalone equivalent study models through existing confidentiality provisions to customers seeking to conduct a stand-alone scenario of their own.
• MWG RR252: Assigns an out-of-merit energy (OOME) cap and/or floor, allowing staff to economically dispatch the resource down or up within the ranges.
• MWG RR259: Modifies the market settlement posting and dispute timelines being implemented with the new settlement system, reducing the number of resettlement postings and manual processes resulting from revisions to meter and bilateral settlement schedules.
• MWG RR273: Automates several the market settlement system’s charge types that are not yet part of revenue neutrality uplift processing, resulting in rounding/residual amounts that must be manually processed and distributed through miscellaneous charges. The new system is scheduled to go live in May 2019.
• MWG RR280: Clarifies the settlement system’s reserve sharing group (RSG) processing by modifying the RtImpExp5minQty field with an attribute indicating whether the import/export quantity was because of an RSG event.
• ORWG RR268: Clarifies or removes outdated language from the operating criteria, improving SPP’s ability to perform reliability coordinator, balancing authority, transmission service provider and reserve sharing group functions.
• ORWG RR269: Clarifies language and removes antiquated and redundant language in SPP’s operating criteria and describes the existence of multiple standalone documents.
• ORWG RR270: Converts the operating criteria Appendix OP-2 to a standalone document, clarifies language and adds formatting improvements.
• PCWG RR255: Revises business practice 7060 by adding triggers to stop the annual escalation of undefined baseline costs when a designated TO provides 1) SPP a letter of commercial operation, 2) notification that an upgrade is in-service, and 3) notification that an upgrade is complete.

— Tom Kleckner