By Tom Kleckner

IRVING, Texas — SPP’s two newest stakeholder groups are taking a look at the future, while also stepping almost a decade into the past to resolve the sticky issue of Tariff Attachment Z2.

The Z2 Task Force last week began its work overseeing waiver requests from entities billed for sponsored transmission upgrades dating back to 2008. Meanwhile, at Gulf Coast Power Association’s third annual SPP Regional Conference last week, Strategic Planning Committee Chairman Mike Wise said that his committee has formally launched the Export Pricing Task Force, which will study how SPP can maximize its ample renewable resources.

The latter group’s charter charges it with evaluating “mechanisms to establish equitable and not unduly discriminatory prices for exports and imports of electricity.” SPP has more than 22,000 MW of renewable resources in its interconnection queue, a luxury considering the RTO’s low load growth and ample reserve margins — but a tantalizing energy source for other markets.

“The question is, how do you get this renewable energy outside SPP to those areas that really need it, and how do you price for it?” said Wise, senior vice president of commercial operations and transmission for Golden Spread Electric Cooperative. “The majority of transmission for the good of the load in the footprint has been approved for building or is in construction right now.”

To illustrate his point, Wise said he compared the population growth over the past 25 years in SPP’s 10 largest cities with that of the Dallas-Fort Worth area. He said SPP’s cities have grown by 2.2 million, while the DFW area has added 3.3 million new residents during that same time.

“Our load growth is on zero, or barely north of zero, with an abundance of natural resources coming in,” Wise said.

Asked if the task force would work with other RTOs, Wise told RTO Insider, “We don’t know yet.”

The task force, which has yet to meet, will focus for the time being on recommending rates that can recover the costs of incremental transmission needed for exports and imports.

The group will evaluate Tariff and FERC rules on pricing transactions across seams and the “business case” for exports. It is scheduled to sunset by July 2017.

Joining Wise on the task force are SPP Director Graham Edwards and members Wes Berger (Southwestern Public Service), Blaine Erhardt (Basin Electric Power Cooperative), Dennis Florom (Lincoln Electric System), Greg McAuley (Oklahoma Gas & Electric), John Olsen (Westar Energy) and Richard Ross (American Electric Power).

Z2 Task Force Underway

The Z2 Task Force held an initial brainstorming meeting Aug. 31 and scheduled two additional meetings in September in order to provide an action plan to the Markets and Operations Policy Committee and Board of Directors/Members Committee in October. (See Board Approves Z2 Timeline Extension, Creates Task Force for Further Study.)

The group will address the equity concerns of the so-called Group B members, whose requests to escape direct assignments for upgrades totaling $42.6 million were rejected by the MOPC in July. The five Group B members said the charges should be allocated to the base plan and included in regional and zonal charges under SPP’s Tariff.

The task force also will consider the $113 million in upgrade costs assigned to entities that did not request waivers (Group C).

“We’re actually talking about less than 10% of the overall cost of credits in the waivers,” said task force Chair Denise Buffington, corporate counsel for Kansas City Power and Light. “Hopefully, everyone can see the long-term benefits of a solution everyone can live with.”

Following the October presentations, the task force will evaluate the existing Z2 process and recommend how to compensate upgrade sponsors in the future. It could also be asked to evaluate and recommend improvements to the Tariff attachment going forward.

The task force includes Meena Thomas, a senior market economist with the Public Utility Commission of Texas and the only non-SPP member on the 15-person group. Thomas is also a member of the regulatory-driven Cost Allocation Working Group, whose members are not allowed to serve on other working groups. That exception doesn’t apply to task forces.

“To the extent I can consult with CAWG members in advance, I’ll be voting as a CAWG member,” Thomas said. “Otherwise, I’m voting as a representative of Texas.”