TULSA, Okla. — SPP Strategic Planning Committee Chairman Mike Wise said the committee’s Export Pricing Task Force agrees with staff’s determination that even building additional transmission will not guarantee the RTO can deliver its ample wind power outside its footprint.

In the group’s most recent meeting in March, SPP staff said a market exists for renewable resources, but “rate stress” from building additional transmission and uncertainty that the energy would be deliverable led it to its conclusion. (See “Renewable Exports Unlikely, Task Force Concludes; Readies Final Report,” SPP Briefs.)

“We’re choking on wind,” Wise told the Board of Directors meeting last week. “We run up against the export threshold [about 2,500 MW] on a continued basis.”

Westar Energy’s Kelly Harrison wondered aloud whether transmission is so expensive that it makes wind energy uneconomic to export.

“We’re looking for a business proposition to mitigate that,” Wise responded.

Harrison then asked whether SPP should leave it up to Clean Line Energy to move the wind energy. Clean Line’s Plains & Eastern Clean Line would deliver wind-generated power from the Oklahoma Panhandle through Arkansas to Memphis, though it has met opposition. (See Arkansas Landowners Seek to Stop Plains & Eastern Clean Line Project.)

“That’s why we’re still meeting, until we can get a business proposition that makes sense,” Wise said.

The task force will meet again in June, after several members pushed back against staff’s recommendation to end the group’s work.

Board Asks MOPC to Revisit Mitigated Offers

The board directed the Markets and Operations Policy Committee to revisit a revision request it had passed despite stakeholder concerns it needed more work (MRR214). (See “MWG Closing out MMU’s Recommendations,” SPP Markets and Operations Policy Committee Briefs.)

Board Chair Jim Eckelberger asked Nebraska Public Power District’s Paul Malone, MOPC chair, to expand the discussion to look at the use of rapid-starting units “almost like ping-pong balls” and coal units.

“The way those units are being used is not being reflected in the market,” Eckelberger said.

The change would allow market participants to use a 10% adder for mitigated offers, giving them more margin for error when submitting a mitigated offer curve. The Market Working Group also said the change would improve price formation in SPP’s markets by removing a penalizing feature that may be suppressing offered prices today.

However, MWG Chair Richard Ross of American Electric Power said additional information since the MOPC meeting — where the request received seven “no” votes — had caused him to change his mind. Working with staff, Ross said, he realized the change would modify a mitigated offer as it was cleared, so that when units were dispatched above their minimum bids, it would affect LMPs.

“We didn’t appreciate [that] those units on the margin, and sometimes not on the margin, needed cost recovery under the [make-whole payments],” Ross said. “Technically, [MRR214] does what it says, but it’s impacting the LMPs. It wasn’t until we looked into things and said, ‘Wait a minute. You may get everything you’ve set out to get in the request, but you don’t settle the make-whole payments.’”

Ross said that while the change wouldn’t affect the “lion’s share” of the market, he said the MWG didn’t give the revision request “the full scrutiny we probably should have.”

“These RRs are developed by the members and looked at by staff,” said Dogwood Energy’s Rob Janssen, a former MOPC chair. “You expect to catch everything, but sometimes you don’t.”

The board did approve MRR125, which removes a day-ahead must-offer requirement the Market Monitoring Unit deemed unnecessary in its 2014 State of the Market report. The measure received opposition from three members; two more abstained.

“The day-ahead must-offer has limited value in this market,” MMU Director Alan McQueen said. “This market is very robust in the day-ahead. Our analysis shows this [offer] doesn’t really matter. Whether subjected to day-ahead limited must-offers or not, we see the same patterns.”

Wise said stakeholders should work to clarify the market’s use of physical withholding but received little support.

MMU Nears Compliance with FERC Audit

Oversight Chair Joshua W. Martin III told the board and members that SPP is on pace to complete the changes recommended by FERC’s audit of the MMU. The audit, which took 17 months to complete, said the unit “should strengthen its independence and enhance its separation from” the RTO. (See FERC Calls for Changes to Protect SPP Market Monitoring Unit Independence.)

Martin said the project is almost completed and that testing had just begun of the card-access system that will separate MMU staff from RTO staff. MMU staff had worked alongside other RTO staffers, most in open cubicles.

Eric Callisto, an attorney with Michael Best & Friedrich who has served as the MMU regulatory counsel for two years, said much of the work was “already being implemented while the audit was ongoing.” He said two more compliance reports will be filed by the end of July to wrap up FERC’s recommendations.

Callisto pointed to the Oversight Committee’s 2015 position statement on the MMU’s independence, which opened by requiring the unit to “function independently of the RTO to avoid actual or apparent conflicts in its oversight role.”

“One of the key items was the MMU had the resources to make comments to FERC at any point, even if it disagreed with the position that came through the stakeholder process,” Callisto said.

He said the MMU now holds executive sessions with the committee and without SPP staff present, but still holds other executive sessions with SPP executives when relevant to the OC.

“It’s that dialogue with the Oversight Committee that gives the MMU its independence,” Callisto said. “The keystone of the relationship is having the ability to go into that confidential forum, talk about ideas and get confirmation of ideas.

“The last two years, we have seen the MMU file at FERC more often than it has in the past. I believe the MMU is more independent now than it was a year and a half ago,” he said.

Among other changes, Callisto said, is the Oversight Committee’s use of a non-SPP staff secretary when meeting with the MMU, the unit’s logging of non-routine interactions with SPP executives and stakeholders, the MMU’s use of outside counsel and a separate IT budget, and its “awareness that its role is advisory.”

SPP Releases 2016 Annual Report: ‘Forward’

SPP celebrates a milestone year with its 2016 annual report, which it distributed to the Board and Members Committee and posted online last week. The RTO once again used a single word as the report’s title: “Forward.”

“That’s a good word to reflect on all that occurred in 2016,” SPP CEO Nick Brown told directors and members.

The report harkens back to the organization’s 75th anniversary and celebrates the many wind generation records SPP set last year, reaching the Integrated Marketplace’s $1 billion mark for total savings and lowering its planning reserve margin from 13.6% to 12%.

“Given such a banner year, we could all be forgiven for wanting to rest on our laurels or to indulge a bit longer in nostalgia,” Brown and Eckelberger write. “As SPP crosses the threshold into the next quarter century of our existence, then, we look not back but forward. We believe … the facts and figures presented here do more than chronicle a year of our company’s ongoing story: They point ahead to the next chapter.”

That next chapter could include adding the Mountain West Transmission Group’s membership, which should be determined by year-end. (See Mountain West, SPP Tout RTO Membership to Colo. PUC.)

Members Committee Approves 3 New Members

In a special members meeting, the board and members approved the nomination of three new representatives to the Members Committee and bylaw changes related to the Regional Entity.

Brent Baker (Empire District Electric), Kevin Noblet (Kansas City Power & Light) and Aundrea Williams (NextEra Energy Resources) will join the committee. They replace Kelly Walters (Empire) and Scott Heidtbrink (KCP&L), who retired, and Mark Tourangeau, who recently left NextEra.

Stakeholders also approved changing RE General Manager Ron Ciesiel’s title to president, and adding a vice chair position to the RE’s trustees. According to the Corporate Governance Committee’s recommendation supporting the changes, the RE said Ciesiel’s title change was “more appropriate and indicative of the position,” and that the vice chair would ensure a “more consistent transition” should the chair be unable to complete his or her duties.

Board, Members Honor Skilton’s Service

SPP’s directors, the Members Committee, staff and other stakeholders honored long-time Director Harry Skilton with a standing ovation before adjourning the board meeting, his last as vice chair. Skilton, who remains on the board, stepped down after 13 years as the board’s vice chair, a position in which he has been Eckelberger’s steady right-hand man.

“For the last 13 years, Harry has been my sidekick,” Eckelberger said, turning to Skilton. “I’d like to acknowledge my personal appreciation for what you have done.”

Eckelberger and Skilton both joined the SPP board in 2000. The board has added three new members in the last year and is working to bring in the new blood.

Larry Altenbaumer, who joined the board in 2005, has replaced Skilton as vice chair and chair of the Finance Committee.

Board Approves Seams Policy Paper, ITPNT Portfolio

The board approved revisions to the Seams Projects Policy Paper and the 2017 ITP Near-Term assessment’s portfolios. Both had been endorsed by the MOPC two weeks earlier.

The revised seams policy expands the definition of seams projects to include 100-kV and above solutions involving a tie line between SPP and its neighbor or transmission projects that do not cross regional boundaries. It also documents cost allocation policy decisions previously approved by the Regional State Committee and board in 2014.

ITC-Great Plains opposed the motion, saying the revisions did not clarify “the interaction between SPP’s Order 1000 processes and the proposed Seams Transmission Project process.” NextEra Energy Resources and Dogwood Energy abstained.

The board unanimously approved the 2017 ITPNT portfolio, which also passed the MOPC and the Transmission Working Group without opposition. The final portfolio included 15 new reliability projects and one modified project that solve 108 thermal and voltage needs, at a total cost of $60.3 million.

The board also unanimously approved a consent agenda that included a number of proposals previously approved by the MOPC:

• Bylaw changes for the nomination and selection of organizational group chairs and vice chairs, and their staggered term lengths. (See “Org Chairs also may See Changes,” SPP Markets and Operations Policy Committee Briefs.)
• Staff’s expedited re-evaluation of the need date for Basin Electric’s Roundup-Kummer Ridge 345-kV project, to reflect lower load growth forecasts. (See “MOPC Endorses Re-evaluation of Basin Electric Project,” SPP Markets and Operations Policy Committee Briefs.)
• A 50-MVAR reactor at the City Utilities of Springfield, Mo.’s 345-kV Brookline substation. The project was identified last year in a joint study with Associated Electric Cooperative Inc. (AECI).
• Regional funding for a new 345/161-kV transformer at AECI’s Morgan substation and an uprate of a connecting 161-kV line at an estimated $9.2 million. The project is contingent on reaching an agreement for compensating AECI, which would not see reliability benefits from the project even though it sits within its service area.

The consent agenda also included 15 revision requests.

• CPWG-RR218: Adopts a $50 million unsecured credit allowance, a raise from $25 million, to reduce the costs of capital for utilities. SPP is the last RTO to adopt a $50 million limit.
• MWG-RR200: Removes bilateral settlement schedules at hubs and generation settlement locations from the over-collected losses (OCL) distribution calculation. Only schedules at a withdrawal point would be included in the OCL calculation.
• MWG-RR203: Adds a “last-chance” second set of auction revenue rights nominations in the monthly ARR process, where any source-sink path can be nominated.
• MWG-RR205: Allows the implementation of jointly owned units (JOU) registered under the combined-resource option to include the minimum regulation-capacity operating limit in its offers, and adds resource offer parameters that can be changed daily for a JOU’s minimum physical capacity and physical-regulation capacity operating limits.
• MWG-RR216: Reinstates Tariff language omitted from RR173 related to eligibility of multiconfiguration resources for regulation-up or regulation-down service.
• MWG-RR217: Removes Tariff language related to violation relaxation limits to make the section consistent with a compliance filing in response to FERC’s Order 825 on shortage pricing.
• MWG-RR219: Ensures language in SPP’s Tariff meets FERC requirements for enhanced combined cycle units.
• ORWG-RR213: Creates a new appendix to the operating criteria that defines how the SPP reliability coordinator will operate voltage stability limited system constraints, as recommended by the Wind Integration Study.
• RTWG-RR202: Responds to FERC guidance on SPP’s disparate treatment of point-to-point and network integration transmission service (NITS) during redispatch. NITS would be eligible for ARRs during limited times of the year and only for the service not subject to redispatch, but would not be eligible for long-term congestion rights. (See SPP Hopes Congestion Rights Rule Change Wins FERC OK.)
• RTWG-RR208: Implements the Transmission Planning Improvement Task Force’s white paper for new regional planning processes by replacing current planning schedules with an annual transmission expansion plan; creating a standardized scope; establishing a common planning model for use across the various planning processes; and creating a staff/stakeholder accountability program. (See “SPC, MOPC Approve Improvements to SPP’s Tx Planning Process,” SPP Strategic Planning Committee Briefs.)
• RTWG-RR211: Establishes a $3 million minimum cost threshold for competitive projects.
• TRR223: Revises the Tariff to extend the timeline for conducting regional cost allocation reviews from three years to six.
• TWG-RR215 and TWG-RR186: Eliminates redundant requirements.
• TWG-RR224: Aligns the existing criteria with NERC’s new definition of “special protection schemes” as “remedial action schemes.” Also cleans up planning criteria language coinciding with changes made to the operating-horizon system operating limits methodology.

– Tom Kleckner