By Tom Kleckner
KANSAS CITY — SPP’s Z2 credit project, years in development and the source of much member frustration, is on track to be completed in 2016. But those involved say they can’t estimate the size of the bills SPP may be handing out as a result.
“We don’t know if this is a bread box or a semi-trailer yet,” said Dennis Reed, chair of the Regional Tariff Working Group, who briefed the Markets and Operations Policy Committee last week.
The purpose of the project is to create software that would properly credit and bill transmission customers for system upgrades under Tariff attachment Z2. The problem has been trying to avoid over-compensating project sponsors and include a way to “claw back” revenues from members who owe SPP money for other reasons. Accounting for transfers of reservations has also been a challenge.
“This policy decision was made 10 years ago … we didn’t plan for [the bills] to build up over time,” said Kansas Power Pool’s Larry Holloway, one of several members expressing frustration. “I asked SPP at the time if they had enough Commodore 64s to get this done, and they said they did.”
Reed, director of FERC compliance for Westar Energy, said his group and SPP staff are working to estimate the amount of crediting, but he noted an accurate number can’t be made until the software is completed.
“We have to go through the bulk of the process before we know what the numbers will be,” explained SPP Chief Operating Officer Carl Monroe.
Reed said possible methods of phasing in catch-up payments are also being developed.
Reed said installment payments would help “the smaller entities who don’t have big budgets — say a small city — that all of a sudden [are] faced with a huge bill.”
Reed said the RTWG would bring back some ideas to the October MOPC meeting that “may or may not require” a Tariff filing.
Accenture, which helped SPP implement the Integrated Marketplace on time and on schedule last year, has been hired to manage the Z2 project. The company expects to have a production-ready system built and tested by the end of January 2016.
Following the system’s implementation, SPP will begin the process of calculating past billings and payments, billing customers and paying those who funded network upgrades. Monthly billing will be a change for current long-term service customers.
“The number is going to come out. We can’t predict it, but the cloud of uncertainty is there,” said Aundrea Williams of NextEra Energy Resources. “I need to get ready for the number and to start planning for it.”
