By Tom Kleckner

During the past two years, SPP has added new markets for its members, some 5,000 MW of peak demand and 7,600 MW of generating capacity in the Upper Great Plains, extending its footprint to the Canadian border in the process.

So what does it plan for an encore in 2016?

Celebrating its 75th anniversary, for one. SPP will mark the occasion this fall with several ceremonies and a commemorative publication chronicling the RTO’s history, which began in the days after the attack on Pearl Harbor.

That’s when 11 regional power companies in the Southwest — including predecessors of today’s SPP member companies — signed an agreement to pool their energy resources and ensure Central Arkansas’ aluminum production could maintain 24/7 operations. When World War II ended, an executive committee decided to continue the organization to maintain reliability and coordination.

From those modest beginnings, SPP has grown into a sprawling member-driven organization, coordinating electricity flows over 56,000 miles of high-voltage transmission lines across 575,000 square miles in all or parts of 14 states, from the Deep South to the Dakotas and westward. It counts 97 members representing cooperatives, power producers, marketers and independent transmission companies along with the usual transmission owners, and has 170 registered participants in its markets.

A ‘Success Metric’

SPP’s growth has been good news for its members.

The RTO projects the addition of the Integrated System (IS) last October will yield $334 million in member benefits over a 10-year period. It also has said the Integrated Marketplace — comprising day-ahead, real-time balancing and congestion-hedging markets — generated approximately $210 million in total regional net savings in its first year, in addition to $170 million in savings from SPP’s previous energy imbalance service market. SPP plans to release a study quantifying the transmission benefits its members receive in January.

“It’s been another interesting year for the corporation and our members,” SPP CEO Nick Brown said during October’s board meeting. “If ever there’s a success metric, it’s the members who have decreased costs or rates.”

SPP will focus much of this year on improving its rapidly maturing markets with three projects: enhanced combined cycle (ECC) logic, gas-electric “harmonization” and the Z2 crediting tool.

Improved Economic Dispatch

The ECC project is designed to provide more sophisticated modeling that captures the flexibility of combined cycle plants. Each combined cycle configuration will be modeled in the market-clearing engine as a separate resource.

SPP expects the increased flexibility to allow “optimization of the combined cycle resource configuration throughout the unit commitment processes,” projecting in its 2016 budget a $3 million to $5 million reduction in generation costs. The savings are expected to grow as new combined cycle plants join SPP in the future.

SPP has targeted March 2017 for completion of the $1.5 million project. (See “Enhanced Combined-Cycle Project Moves Forward” in SPP Board of Directors/Members Committee Briefs.)

The ECC work will be done in conjunction with system changes needed to close the Integrated Marketplace’s day-ahead market earlier and shorten the solution time for posting results by 30 minutes. Both have significant impacts on the market operating system’s solution time.

SPP said the gas-electric harmonization work will be completed by the fall, at a projected cost of $6.2 million.

The initiative is a result of FERC Order 809, which moved the timely nomination cycle deadline for gas from 11:30 a.m. CT to 1 p.m. (See “Board Approves Gas-Electric Timeline Change” in SPP BoD/Members Committee Briefs.)

SPP says the schedule changes are “an incremental improvement over the existing timeline.”

Years of Incorrect Credits

The Z2 crediting project dates back to the last decade as a result of years of incorrect credits for transmission upgrades. (See “Z2 Crediting Task Force Remains on Track” in SPP Markets and Operations Policy Committee Briefs.)

A project team is developing software that will properly credit and bill transmission customers for system upgrades under SPP’s Tariff attachment Z2. The problem has been avoiding over-compensating project sponsors and including a way to “claw back” revenues from members who owe SPP money for other reasons.

The task force has estimated creditable upgrades of $750 million, with up to $90 million in transmission customer improvements and the remainder from sponsored upgrades.

The task force hopes to present a better estimate during the Markets and Operations Policy Committee and Board of Directors/Members Committee quarterly meetings in January.

SPP says the new system should reduce errors, disputes and resettlements.

Eyes on Expanded Footprint

SPP’s day-to-day business in 2016 will remain focused on maximizing the addition of the IS to its footprint.

The IS tripled SPP’s hydroelectric capacity, which represented only 1.1% of the RTO’s capacity in 2014. It also added winter-peaking regions, increased seams coordination issues and greatly expanded the geographic area for SPP’s reliability monitoring function.

SPP says the addition of the IS has “opened opportunities to expand SPP’s services to affiliated entities in the Western Interconnect” through membership or contracted services. SPP has an ongoing market-consulting contract with the Northwest Power Pool, which has been exploring the possibility of opening an energy market for several years.

Because of the surge in wind production, the RTO will refresh its 2009 wind-penetration study in February.

Navigating the Clean Power Plan

SPP will continue its work helping states comply with EPA’s Clean Power Plan. The RTO expects “significant impacts in the near term and well into the future.”

SPP’s 2016 operating plan says it intends to encourage regional compliance. But it acknowledges some states may decide to go it alone. Several SPP states have joined litigation to block the rule.

“The lawsuits will muddy the water in terms of how SPP interacts with its stakeholders as they work to comply with the standards,” it said.

SPP’s 2016 operating plan says it intends to encourage regional compliance. But it acknowledges some states may decide to go it alone.

The RTO will include CPP compliance in the 2017 Integrated Transmission Planning 10-year assessment. A near-term transmission study also will be conducted this year, with the results presented to MOPC and the board in April.

At that time, MOPC and the board should be taking up for consideration SPP’s first Order 1000 project, the 21-mile, Walkemeyer-North Liberal 115-kV project in Kansas. An industry expert panel is currently evaluating responses to SPP’s request for proposals.

SPP expects to receive 3,200 proposals for competitive projects in 2016, double the number it saw in 2014.

It also expects a “significant increase” in generation interconnection studies. SPP projects a 12% bump in transmission volume to more than 407 MWh in 2016.