By Tom Kleckner
SPP members are advancing at least two alternative solutions to address the RTO’s complicated crediting system for transmission upgrades.
The Z2 Task Force agreed last week in Kansas City to present two proposals to simplify the process spelled out in Attachment Z2 of SPP’s Tariff for assigning financial credits and obligations for sponsored upgrades to the Markets and Operations Policy Committee next month for members’ feedback. The proposed alternatives are among the same three the group has spent several months hashing over. (See SPP Members Again Struggle with Solutions to Z2 Credits.)
“We’re doing an awful lot of talking, but we’re not getting anywhere,” Oklahoma Gas & Electric’s Greg McAuley said during the task force’s meeting.
The problem, McAuley told RTO Insider, is that there’s still not enough detail in the proposals to make informed decisions. But obtaining the necessary data would be “a significant undertaking in itself,” he said.
“Without some kind of analytical comparison, it’s difficult for anyone to make decisions,” he said. “There can be unintended consequences with any of these options that can be significant.”
That became apparent as members peppered Westar Energy’s Grant Wilkerson with questions as he ran through several scenarios related to his solution, which will be among those presented to the MOPC.
Under the Westar proposal, transmission rates would be calculated based on an average cost per megawatt. Wilkerson said his approach would not be affected by the order in which upgrade sponsors are compensated; rates would be trued up annually and credits would be based on directly assigned costs and usage factors (as determined by impacts identified in aggregate studies).
The task force also agreed to share staff’s proposal at the MOPC meeting. It agreed with staff’s recommendation to eliminate credits for new upgrades that don’t add transfer capacity and to eliminate credits for all short-term service, approving a pair of motions in roll-call votes. Staff agreed to provide additional data for the task force’s next meeting, when members will resume their analysis of the proposals.
A third proposal, incremental long-term congestion rights (ILTCRs), while no longer being considered a substitute for Z2 credits, also remains an option.
“I’m comfortable if people want to fund this stuff [with ILTCRs],” said Kansas City Power & Light’s Denise Buffington, the task force chair. “There isn’t any transparency to it, and I struggle to identify [the costs] to regulators. Maybe we do want to socialize the costs, but I don’t know if ILTCRs are any more transparent.”
The task force will meet again June 27 in Dallas. The MOPC meets July 11-12 in Denver.
