By Tom Kleckner
LITTLE ROCK, Ark. — The SPP task force updating the RTO’s planning reserve margin requirements shared its draft report on loss-of-load expectations (LOLE) with two other working groups Oct. 28, giving them a first look at a project that has caused members concern.
More than a year in the making, the study analyzed how reducing the reserve margin would affect the RTO’s ability to maintain the number of days per year for which available generating capacity is insufficient to industry standard one-day-in-10 years (0.1 day/year) LOLE.
Or, as Capacity Margin Task Force Chairman Tom Hestermann said, the study answered the question: “How low can you go?”
SPP’s Oklahoma members have expressed concerns that the RTO already has one of the lowest planning reserve margins, at 13.6%. The task force has said that margin could be lowered to about 10%.
“A small decrease in the reserve margin may be appropriate, but a substantial decrease in what we have would be revolutionary, not evolutionary,” said Oklahoma Gas & Electric’s Philip Crussup, alluding to one of the tenets in SPP’s value proposition during the Oct. 27 Board of Directors and Members Committee meeting. “This should be approached very cautiously.”
“No one on the task force wants a capacity margin we’ll have to raise,” said Hestermann, of Sunflower Electric Power. “We hope we can come up with a requirement that will last every five years, instead of looking at it every 17 years.”
It has been that long since SPP last reviewed its planning reserve margin. But times change, as SPP’s Vice President of Engineering Lanny Nickell noted in introducing the LOLE study.
“The task force became necessary partly because of the $5.6 billion in transmission investment we’ve made since 2004,” he said. “We’ve recognized the criteria could withstand some improvement. Do we need to bring more people into the obligation to carry capacity? Can we reduce the capacity margin requirement, given the transmission increase and diversity of load?”
Among its inputs, the study used summer-peak models from the 2016 and 2017 near-term transmission planning assessments and five years of hourly load data for each of the RTO’s 16 balancing authorities. The results indicated the SPP region can maintain an LOLE of 0.1 day/year with reserve margins as low as 8.7% (see chart).
“We wanted you to see how we used the assumptions and get to a common understanding of what we did,” Nickell told the Generation and Operating Reliability working groups.
SPP staff said the LOLE study could be improved by including uncertainties such as wind variability, forced outage rates for interregional transactions and demand response.
The task force also approved for circulation to other groups its planning reserve assurance policy, an effort to address concerns that current mechanisms to ensure sufficient reserve margins are inadequate. The policy proposes penalties be timely and “economically incent” load-responsible entities (LREs) to correct planning reserve deficiencies.
The task force has already completed a white paper defining LREs to account for the fact SPP’s load-serving members do not cover all the load in the RTO’s planning coordinator footprint.
Its draft deliverability study is looking at an option to allow an LRE to meet its reserve requirements without having to obtain firm transmission service.
The task force has suggested a workshop before the January meeting of the Markets and Operations Policy Committee to share its work in more detail. It also has urged that its work be taken up by a permanent working group, as is the practice in MISO and ERCOT.
