By Tom Kleckner
FERC on Wednesday accepted SPP’s proposed Tariff revisions related to shortage pricing, rebuffing the protest of one key stakeholder.
Submitted in response to FERC Order 825, SPP’s changes removed ramp-sharing obligations and other Tariff provisions that prevent shortages caused by insufficient ramp capability from triggering shortage pricing. The RTO also removed certain constraints and their associated violation relaxation limits (ER17-772).
But the commission also rejected SPP’s proposed provisions creating a demand curve designed to set scarcity prices for energy shortages, ruling that the changes fell outside the scope of Order 825. FERC said the order did not require SPP to change its shortage pricing levels, only that it initiate procedures when a shortage is indicated.
The commission provided SPP 30 days to submit a compliance filing that either removes the demand curve provisions or explains how they comply with Order 825. It also directed removal of SPP’s suggested definition of “scarcity pricing,” allowing the RTO to propose a change or modify shortage-pricing levels in a separate Section 205 filing.
Order 825 requires RTOs to settle real-time energy, operating reserves and intertie transactions in the same time interval it dispatches, prices and schedules them, respectively. SPP was one of several RTOs that already settles those transactions in five-minute intervals. (See FERC Issues 1st RTO Price Formation Reforms.)
Golden Spread Electric Cooperative protested SPP’s changes, contending that the filing did not fully comply with Order 825 because it did not address the RTO’s practice of committing additional capacity through the reliability unit commitment (RUC) process or through manual operations that can prevent potential scarcity pricing events. The co-op said this practice is not transparent, creating uplift charges and a disincentive to make efficient operations and investment decisions.
Golden Spread argued that SPP should procure fewer resources through the RUC and manual processes, and instead rely on the submission of competitive offer curves in the day-ahead and real-time markets. It asked FERC to require that SPP eliminate RUC and manual commitment practices that mask scarcity pricing conditions and address any commitment outside of the normal markets.
The commission disagreed, dismissing Golden Spread’s concerns as being outside the proceeding’s scope. FERC noted Order 825 did not require the co-op’s suggested modifications to RUC or manual commitment processes, but it agreed Golden Spread “has raised an important issue that SPP should consider exploring through its stakeholder process.”
Zero Uplift Charges for Resources Dispatched to Zero
The commission also approved SPP’s proposal to exempt generating resources dispatched to zero from paying uplift charges, ruling the plan is consistent with the RTO’s existing provisions that ensure de-committed resources are not charged for uplift (ER17-520).
FERC found that resources dispatched to zero at SPP’s instruction make identical energy contributions to the real-time market as de-committed resources. “Thus, it is reasonable that both be treated the same with regard to uplift charges,” the commission said.
SPP member Golden Spread supported the Tariff revisions but asked the commission to require further changes to allow quick-start resources to voluntarily de-commit and buy back their day-ahead position from the real-time market without being assessed uplift charges, or adapt the security constrained economic dispatch software to accommodate those resources’ unique nature.
FERC rejected that request, saying it was beyond the scope of the Section 205 proceeding.
