SPP stakeholders have recommended the RTO’s leadership reject $114 million in remaining waiver requests for Z2 transmission upgrades.
The Z2 Task Force voted 8-4 Friday with four abstentions to “follow the Tariff” and reject all Group B and C waivers. SPP has calculated that Group B transmission customers (those that SPP said didn’t qualify for waivers from paying their Z2 bills) owe $36.9 million in directly assigned upgrade costs and Group C members (who didn’t request waivers) owe $77 million.
SPP staff made the same recommendation to the Board of Directors and Markets and Operations Policy Committee in July, but the board did not adopt the recommendation and created the task force to find a “more rounded solution” to a problem that dates back to 2008. (See Preliminary Z2 Bills Released; Task Force Develops Options for Waiver Requests.)
The task force reviewed additional data from staff and discussed six options it had developed during its previous meeting. The “follow-the-Tariff” option was a clear favorite, with accepting the waivers and regionalizing the costs drawing half as much support.
The recommendation now moves forward to the MOPC and the board later this month. The task force plans to make itself available to help improve SPP’s Z2 processes following the October meetings.
“We’re the only RTO that allows third-party impacts to these types of upgrades,” said Bill Grant, director of strategic planning for Southwestern Public Service, referring to transmission customers making service requests that affect previous upgrades. “This is a convoluted mess. It’s going to cost us money going forward. Now that we’ve seen it, and how complicated the whole [Z2] process is, why wouldn’t we change that?”
Under Attachment Z2 of the SPP Tariff, staff was to assign financial credits and obligations for sponsored upgrades. Years of incorrectly applied credits have complicated the task of trying to accurately compensate project sponsors and claw back money from members who owe debts for the upgrades.
SPP Vice President of Operations Bruce Rew said his staff has held internal discussions on how to improve the Z2 process and developed a couple of alternatives that can be presented in the future.
“One thing that has to be key is that [the process] has to be simpler than it is,” Rew said. “We’re concerned about how we manage this 10, 20, 30 years from now. It’s got to be simpler in terms of what we have, both on our side and on the visibility side, so that you can see it.”
In a related matter, FERC on Friday approved SPP’s request for Tariff waivers to allow it to offer a payment plan to transmission customers owing Z2 bills (ER16-2330).
SPP Goes Live with New Gas-Day Timelines
SPP’s Integrated Marketplace instituted its new FERC-ordered timelines for gas-day nominations Oct. 1.
Phillip Bruich, SPP’s director of markets, said the transition went “very smoothly” and thanked market participants for being prepared.
“Our market participants … were well prepared, ready for the changes and able to submit their bids and offers on time the first day,” Bruich said. “This is a … step toward better coordination and efficiencies between the electric and gas markets.”
The SPP market now closes the day-ahead market at 9:30 a.m. CT and posts the results at 2 p.m., moving the timelines up from 11 a.m. and 4 p.m., respectively. The day-ahead reliability unit commitment reoffer period opens at 2:45 p.m. and closes at 5:15 p.m., a shift from 5 p.m. and 8 p.m., respectively.
The changes are a result of FERC Order 809, which required RTOs to coordinate their day-ahead operations with the natural gas market. The commission says this change will “better ensure the reliable and efficient operations of our interstate natural gas pipelines and our electricity systems.”
– Tom Kleckner
