TULSA, Okla. — SPP is stepping up its bid to offer market services in the Western Interconnection, with interested participants approaching the RTO for more details on its proposal.

CEO Nick Brown told the RTO’s Board of Directors and Members Committee on Tuesday that “many” Western entities have asked SPP “to put very specific proposals on the table.” He said the requests are based on the RTO’s experience operating energy imbalance service and day-ahead markets.

“We have a model we believe is in the best interest of parties in the West,” Brown said. “Rather than go out and say, ‘OK folks, what is it that you want?’ — we’re going to take a much stronger leadership role to put a proposal on the table.”

SPP said last month it was asking Western utilities and other industry participants to help build a real-time market that would compete with CAISO’s Western Energy Imbalance Market. (See SPP Solicits Interest in Western Real-time Market.)

Rather than listen to proposals from Western entities, Brown said the grid operator is going to take a more proactive role.

“I’ve been asked by participants in the West to do that,” he said. “It’s a wonderful strategic opportunity.”

Brown also told the board and stakeholders that SPP faces three “concerning items” in the months ahead:

• FERC’s reversal of a previously issued waiver request allowing SPP to invoice transmission customers for Attachment Z2 credit payment obligations from the 2008-2016 time period. The commission has ordered SPP to refund approximately $200 million to members. (See SPP MOPC Briefs: April 16-17, 2019.)
• A Federal Power Act Section 206 complaint filed with FERC by the city of Springfield, Mo., over SPP’s highway/byway cost allocations (EL19-62).
• FERC’s recent elimination of exit fees for non-transmission-owning or non-load-serving entity members. (See FERC Tells SPP to End Exit Fee for Non-TOs.)

The board and members took up the Z2 and exit fee discussions during its executive session.

Brown said the Corporate Governance Committee will take up the exit fee issue “in greater detail” in the weeks to come. FERC on May 1 granted SPP’s request to extend the compliance deadline from June 17 to Aug. 1 (EL19-11).

General Counsel Paul Suskie told the Regional State Committee on Monday that two members have filed Section 206 complaints with FERC alleging SPP incorrectly calculated Z2 payments. Suskie said four additional TOs have told him they plan to file complaints because the RTO is not issuing refunds.

SPP MMU: Competitive Markets, Prices Up $2/MWh

A draft version of the Market Monitoring Unit’s 2018 State of the Market report finds the RTO’s markets are competitive, with average energy prices of $28/MWh, about $2/MWh higher than 2017 because of increased loads, transmission expansion, lower wind capacity factors and increased generator outages that offset lower gas prices and a “large and increasing” reserve margin.

The MMU has relied on a peak available capacity metric instead of a reserve margin in its last two reports. The metric uses a percentage of each resource’s average maximum capacity during July and August, divided by the resource’s nameplate capacity. For 2018, the peak available capacity percentage was 35%, up from 33% in 2017, nearly three times higher than SPP’s minimum required planning reserve margin of 12%.

MMU Executive Director Keith Collins has compared SPP to a “wind store,” it having added almost 7 GW of wind capacity over the past three years and expecting another 6 GW to come online over the next few years. SPP has more than 20 GW of available wind capacity.

Wind additions continue to outpace generator retirements, Collins said. He said members retired 1.9 GW of coal and gas capacity in 2018.

Collins said while the MMU is not making recommendations to address “imminent” issues, it is advising “more of a prepared approach” for future events.

“Be prepared and assess what the world will look like with changing prices, especially with transmission expansion,” he said.

The MMU is recommending parameter changes (ramp rates, run time, down time, etc.) to limit market power, improving credit rules to account for known information in assessments, developing a mechanism or product to pay for capacity that covers uncertainties, and improving the ability to assess a range of potential outcomes in transmission planning.

The report will be shared with FERC by mid-May, Collins said. A conference call to further discuss the report will be held shortly before the end of May.

2018 Annual Report, ‘Balance,’ Available

SPP distributed copies of its 2018 annual report, “Balance,” during the board meeting. The title alludes to the task of managing real-time operations, reliability, compliance, financials and developing carbon-free resources.

“We hold to a belief that reliability and economics are inseparable,” Brown writes in the report. “It’s our duty to ensure the reliable delivery of electricity to millions of people across our footprint, and every decision along the way has a financial impact to our members and their end-use customers.”

The report is posted as a PDF and an interactive website.

Directors, Members Recognize Retiring Stakeholders

Directors and members paid tribute to several retiring stakeholders who were attending their last board meeting: Mike Risan, Basin Electric Power Cooperative’s senior vice president of transmission; Jerry Peace, Oklahoma Gas & Electric’s vice president of integrated planning and development; and FERC’s Darrell Piatt, with the Office of Electric Reliability.

Brown said he goes back 30 years with Risan and credited him with helping drive the 2015 integration of the Integrated System.

Consent Agenda Includes GridLiance NTC

The board’s consent agenda, which passed with the Members Committee’s unanimous consent, approved several new stakeholder group members and handed GridLiance High Plains the assignment of a notice-to-construct for a Kansas Power Pool 69-kV rebuild project. The NTC’s potential assignment was the subject of some contention during the April Markets and Operations Policy Committee meeting but remained on the consent agenda. (See “SPP Proposing to Assign Kansas NTC to GridLiance,” SPP MOPC Briefs: April 16-17, 2019.)

The $3.6 million project, which would rebuild 4 miles of 69-kV lines in Winfield, Kan., is waiting on approval from the Kansas Corporation Commission (19-GLPE-338-ACQ). GridLiance and Winfield have agreed to a long-term partnership that includes investments in “reliability upgrade(s).”

GridLiance High Plains President Brett Hooton said the company is excited about the board’s approval. “We look forward to working through the Kansas Corporation Commission’s regulatory process,” he said.

The consent agenda’s approval also resulted in the withdrawal of several NTCs issued to Westar Farmers Electric Cooperative in 2008 and 2009. The proposed 69-kV upgrades are no longer needed because of subsequent 138-kV upgrades in the area.

Two other NTCs, previously awarded to Southwestern Public Service, were withdrawn in a separate vote following an out-of-cycle reevaluation of SPS’ Lamb County project. The project was identified as a regional reliability effort in the 2014 Integrated Transmission Planning near-term assessment, but SPS said it believes the project is no longer needed. Staff found no adverse effects by removing the project from the 2020 ITP, generator interconnection or transmission-service processes.

The board approved:

• Tri-State Generation and Transmission’s Duane Highley to the Human Resources Committee. Highley replaces himself after formally resigning from the committee when he left Arkansas Electric Cooperative Corp. to become Tri-State’s CEO.
• OG&E Controller Sarah Stafford’s appointment to the Finance Committee, replacing the retiring Peace.
• The Model Development Working Group’s charter revision that expands voting membership from 14 members to “up to” 24, allowing NERC-registered transmission planners to join.

The board also approved two revision requests:

• ORWG RR349: Requires responsible entities to use the reliability communications tool (R-comm) instead of telephones to communicate with the SPP balancing authority.
• TWG RR350: Eliminates language in the criteria that is already covered by NERC standards or other SPP standalone documents, minimizing inconsistencies or conflict with current and future NERC standards and revisions.

— Tom Kleckner