DES MOINES, Iowa — SPP CEO Nick Brown last week told the Board of Directors and Members Committee that a recent FERC-NERC report on a 2018 cold-weather event confirmed the RTO’s position on MISO’s use of its system.

“I’m very appreciative of FERC and NERC inserting themselves in what was initially described as a contractual dispute,” Brown said during the July 30 meeting. “Significant clarification was needed, and we got that.”

MISO uses a tie line in the Missouri Bootheel to link its Central and South regions. Under terms of a 2015 settlement with SPP, MISO is free to transfer up to 1 GW without compensating SPP and other parties, but it cannot exceed 2.5 GW or 3 GW, depending on the power flows’ direction.

On Jan. 17, 2018, unusually cold weather led to numerous outages and derates in the South. Entergy alone lost 11.6 GW of capacity, leading MISO to declare a maximum generation alert for the region. During the event, MISO exceeded its 3-GW north-to-south limit by 1.3 GW.

“It was one of the most significant operating events I’ve seen in my career,” Brown said.

SPP General Counsel Paul Suskie said that with the large number of contingencies on the regional grid, the report uses the term “N-many,” something the RTO’s veterans had never seen before.

FERC last September opened an inquiry, just the third it’s ever conducted. It released a copy of the report, done in partnership with NERC, on July 18. (See FERC Orders Cold Weather Reliability Standard.)

The report corroborates SPP’s position that any energy above the 1-GW transfer limit should be non-firm and as-available, staff said. They said the report noted MISO incurred risk in assuming it could transfer more than 1 GW across the seam.

In the report, FERC staff recommended NERC develop a standard on generation weatherization, the second time it has made that suggestion.

That work has begun, Brown said, and SPP has been asked to sponsor the effort. “We readily accept that opportunity,” he said.

The report included 13 recommendations for SPP, MISO and the other parties to the RTOs’ agreement (Associated Electric Cooperative Inc., Southern Co., Tennessee Valley Authority, LG&E and KU Energy, PowerSouth Energy Cooperative, and NRG Energy). Nine apply to SPP. The RTO has addressed four of them: perform periodic impact studies, analyze real-time voltage stability, conduct capacity and energy emergency drills, and consider deliverability to avoid stranded reserves. (See related story, “MISO Says Winter Standards Reasonable,” MISO Reliability Subcommittee Briefs: Aug. 1, 2019.)

Directors Lower Exit Fee to $100K

The board approved a Corporate Governance Committee (CGC) recommendation to lower SPP’s exit membership fee to $100,000, a 67% reduction from the current level. Load-serving entities would also be subject to an additional fee based on their net energy-for-load share of the RTO’s financial obligations and future interest.

FERC in April found the fee’s provisions to be unjust and reasonable and a barrier to market participation by non-transmission owners. The commission directed the RTO to eliminate the fee for members who are not TOs or LSEs. (See FERC Tells SPP to End Exit Fee for Non-TOs.)

The change still leaves SPP as the only grid operator with an exit fee not based on charging exiting members to cover their open market positions.

“SPP is still unique in having an exit fee. In my mind, the problem with the exit fee is it’s divorced from the costs driven by membership,” said Enel Green Power’s Betsy Beck, referring to meeting costs and staff time.

Beck said market costs should be borne by all market participants and not just members. “I certainly agree membership is important, but as the market evolves, there need to be pathways for others interested in being engaged,” she said.

“Where SPP is different [is that] membership matters,” Suskie responded. “When you’re a member, you truly have influence over what comes before the board.”

When asked by Beck whether FERC would accept the $100,000 fee, Suskie noted that the commission approved its $300,000 fee in 2006.

“I’m sure your organization and others will protest,” he said.

The board also approved a recommendation that eliminates the exit fee as part of a compliance filing and language defining LSEs and non-LSEs. Staff proposed combining existing language in different Tariff sections to define LSEs as any member that satisfies either definition.

SPP has requested a rehearing of FERC’s decision but was granted a compliance extension to Aug. 1.

“By making this filing, we’re not challenging the ruling,” Suskie said. “We still have an obligation.”

Staff met the deadline by making the new exit fee (ER19-2523), compliance (ER19-2522) and LSE-definition (ER19-2524) filings.

Altenbaumer Delivers VATF, SPC Updates

Board Chair Larry Altenbaumer told the board and members they will likely see final recommendations from his Value and Affordability Task Force (VATF) during the October cycle of meetings.

He said the task force is paying special attention to “SPP’s overall performance in providing value” and that it intends to bring everything together by October. “We’re trying to get some consensus,” said Altenbaumer, who chairs the group.

To that end, the VATF has been divided into three sub-teams that are meeting separately from the full group:

• Budget, led by Evergy’s Darrin Ives, focusing on budget, staffing and IT costs;
• Process, led by NextEra Energy Resources’ Holly Carias, engaged in project approval and prioritization processes; and
• Mission/Strategy/V, led by Golden Spread Electric Cooperative’s Mike Wise, concentrating on organizational group efficiencies and defining, measuring and communicating affordability.

The group, which was formed in January, is finalizing its definitions of affordability and value, determining the criteria for evaluating the sub-teams’ action plans, and updating communication plans on SPP’s value.

Altenbaumer also updated the board and members on the Strategic Planning Committee, which he also chairs. As part of its effort to develop a strategic vision, he said, the committee has used stakeholder feedback to draft a list of strategic initiatives that SPP should “actively pursue.”

Expanding the RTO’s footprint and implementing the Holistic Integrated Tariff Team’s (HITT) and the VATF’s recommendations top the list. Other proposed initiatives include adding services within SPP, focusing on cybersecurity and addressing energy storage technologies, integrating the rush of renewable energy and exporting renewables.

“At present, SPP doesn’t have a normal vision,” Altenbaumer said. “This is something we’d like a new consideration for the organization.”

Under its current timeline, the SPC will deliver its strategic plan to the board in July 2021.

SPP to ‘Beef Up’ Engineering Staff

CEO Brown said during his regular president’s report that SPP has decided to “beef up” its engineering analysis staff to address the backlogged generation interconnection queue, “one of the highest areas of discontent of our members and customers.”

“We have begun receiving numerous letters from congressmen and governors, begging us to do more and commit more resources,” Brown said.

He said recent changes to SPP’s interconnection process — a new three-phase study process and changes to eligibility for financial security refunds — have given the RTO pause to “look very hard at our resources.” (See FERC OKs New SPP Interconnection Process.)

“In this particular situation, the cost to the customer in the GI queue will go down, the administrative fee paid by members will go down [and] the administrative overhead will be spread over a larger group,” Brown said.

A side benefit will be increased customer engagement, Brown said, pointing to recent turnover in the engineering group. “They would rather do the technical work they were trained to do than manage the GI queue,” he said.

Brown also said the CGC he chairs will meet Aug. 22 to consider nominations for seven expiring seats on the SPC and Members, Finance and Human Resources committees. He said the incumbents had said they “desire to continue to serve” but welcomed additional nominations.

Basin’s Christensen Joins SPC

The consent agenda was passed without dissent. It will result in:

The approval of Basin Electric Power Cooperative’s Tom Christensen for the open TO position on the SPC. Christensen replaces Basin’s Mike Risan, who has retired.

The 2020 operating plan, which details SPP’s planned work for the upcoming calendar year after being vetted and approved by the Finance Committee and SPC. Next year’s plan focuses on providing market and reliability services in the Western Interconnection, implementing the HITT’s recommendations and developing a proactive response to known and emerging cyber threats.

Lowering a previously approved Missouri project’s costs from $40.4 million to $31.6 million. Evergy’s Kansas City Power & Light, KCP&L-Greater Missouri Operations and Westar Energy companies are responsible for the 345-kV voltage conversion project.

— Tom Kleckner