By Tom Kleckner

FERC last week directed SPP to make Tariff changes to allow fast-start resources to set clearing prices, saying its current rules are not just and reasonable (EL18-35).

The order wraps up investigations of several RTOs the commission began in December 2017 under Federal Power Act Section 206 and directs SPP to eliminate inflexible operating limits and other rules that the commission said are preventing prices from reflecting the marginal cost of serving load. (See FERC Drops Fast-Start NOPR; Orders PJM, SPP, NYISO Changes.)

FERC found SPP’s quick-start pricing practices to be unjust and unreasonable because they do not allow prices to reflect the marginal cost of serving load. It directed the RTO to make six Tariff changes that the commission said would result in acceptable rates:

• Modify the real-time energy market clearing process to execute the cost-minimizing dispatch solution followed by a pricing run; remove a screening run; and remove the option for enhanced energy offers that incorporate amortized commitment costs in the incremental cost curves.
• Modify the pricing logic so that commitment costs of quick-start resources (including all such resources even if they have not registered as quick-start resources) are reflected in prices, in both the day-ahead and real-time markets.
• Include in the definition of quick-start resources a requirement that those resources have a minimum run time of one hour or less.
• Allow for relaxation of all quick-start resources’ economic minimum operating limits by up to 100%, such that the resources are considered dispatchable from zero to their economic maximum operating limit in setting prices.
• Apply quick-start pricing treatment to both registered and unregistered quick-start resources.
• Include the quick-start pricing practices in the Tariff.

FERC said the changes will result in SPP “having a pricing mechanism that is similar to the pricing mechanisms in other RTOs/ISOs.” It noted that the RTO said it would be required to develop new pricing systems and software to gain compliance with the order, but it expected additional information to be entered into the record when “details on mitigation contained in the Tariff revisions are filed on compliance.”

The commission’s investigation led it to conclude SPP, PJM and NYISO did not adequately allow fast-start resources to set LMPs, resulting in prices that were not just and reasonable and that muted investment signals. In April, it issued a similar order that applied to PJM and NYISO. (See FERC Orders Fast-start Rules for PJM, NYISO.)

FERC found SPP’s approach to pricing quick-start resources to be “inconsistent with minimizing production costs.” It directed the RTO to submit a compliance filing by Dec. 31.