By Tom Kleckner

DENVER — SPP and Mountain West Transmission Group representatives worked hard Friday to allay concerns of Colorado regulators who fear they could lose some jurisdictional authority over Mountain West members should the group eventually join the RTO.

The chief argument to sway regulators to support membership? The effectiveness of SPP’s multistate Regional State Committee, which has primary responsibility for cost allocation, financial transmission rights, resource adequacy and remote resources planning within the RTO’s current 14-state footprint.

Sensing apprehension on the part of some Colorado Public Utilities Commissioners, Sam Loudenslager, SPP’s principal regulatory analyst, encouraged the commissioners to join the RSC.

“In my experience, the more participation by [regulatory] staff, the more value they see by participating in the RSC,” he said. “Other states will make decisions that affect you if you’re not at the table.”

Commissioner Wendy Moser asked if that meant out-of-state regulators would be making decisions that would affect Colorado. She also expressed concerns that the PUC’s RSC membership might violate the state’s open meeting laws.

“The [RSC] will not trump [your jurisdiction],” Loudenslager responded. “I’m saying decisions will be made that affect your region, outside the boundaries of Colorado, whether you’re there or not.”

The information session, focused on transmission, governance and regulatory filings, was the third held by the Colorado PUC. The commission has jurisdictional authority over Xcel Energy’s Public Service Company of Colorado (PSCo) and Black Hills Energy, two of the eight Mountain West members seeking to join SPP.

A Separate SPP?

But Mountain West is already asking SPP to make a series of concessions that would preserve consensus decisions its members have already made.

First, the group wants the RTO to expand the RSC to include a group consisting of just the Western states, resulting in a single committee with two regional divisions. The west side of the RSC would provide guidance on regional planning, cost allocation design, congestion cost hedging and resource adequacy.

Second, Mountain West has requested that SPP perform a loss-of-load-expectation (LOLE) analysis for its footprint, which could potentially be used to support establishing a Western regional resource adequacy requirement.

The group has also proposed a Westside Transmission Owners Committee (WestTOC) that would have decision-making authority over cost allocation, zonal changes and transmission revenue requirements.

“I know it sounds like, ‘Geez, you’re just trying to set up a separate RTO in the West and functionally run it differently,’” said Kenna Hagan, Black Hills’ senior manager of planning, policy and strategy. “We’re only asking to change a small percentage of the governing documents. … We would be adopting the majority of everything SPP has.”

Carrie Simpson, Xcel’s senior manager of market operations, said the WestTOC is necessary to protect decisions the members have made over the past four years to eliminate pancake rates and improve their service. Joining an RTO was one of those decisions. (See SPP, Mountain West Integration Work Goes Public.)

“SPP has a member-driven process, and we want to use as much of that as we can, but there are certain things we’ve identified to modify, in order to move forward,” Simpson said, referring to cost allocation and transmission planning. “These are issues we’ve negotiated that we need to preserve in order to make this work.”

Hagan, who said during an Oct. 16 meeting before SPP members in Little Rock that it’s not “all or nothing,” said the WestTOC would allow Western transmission owners to make decisions collectively, “not as individuals with competing interests.”

“We’ve worked so hard to get here, we want to continue going forward,” Hagan said.

Tri-State Generation & Transmission’s Chris Pink told the commissioners that Mountain West is also proposing the creation of separate FERC Order 1000 planning regions that will work with other planning regions in the Eastern and Western Interconnections. The discrete grouping will preserve the importance of local planning and involvement in the Colorado Coordinating Planning Group, he said.

“There will be a regional evaluation of local projects under SPP, but that doesn’t mean the authority of Mountain West owners, stakeholders and other groups collaborating in the planning process goes away,” Pink said. “This will make the process even better.”

“We’re trying to optimize the region for how the system would operate in the market, which would be a single region too,” said Antoine Lucas, SPP’s director of transmission planning. “We would be using the same model sets, the same future assumptions … but outside the East and West, we would be conducting interregional planning with those areas contiguous to us.”

Pink said SPP’s uniform interconnection process will provide one evident change for independent power producers. Within the Mountain West, IPPs follow different processes to connect generation to the grid.

“Under SPP, [the interconnection process] will be same and it will be consistent. I view this as a benefit,” he said. “The key is that there is going to have to be some sort of a transition. How that transition occurs still has to be worked out.”

PUC Chair Jeff Ackermann asked whether there would be a systemwide cost allocation once transmission planning has been completed and projects built.

“No one has a crystal ball for how the system will operate in the future,” said Black Hills’ Dan Kline. “There have been plans, theories and ideas about this super-voltage overlay that could eventually break down the need for DC ties in the middle of the country. Certainly, should the system develop to the point where the DC ties are no longer needed, that would be something we would want to take a look at.”

Cultural Fit

Kline told Ackermann that Mountain West selected SPP as its potential RTO because of the “broad-based discussion and negotiation” among participants.

“Everyone had a different thought as to what the best solution was,” Kline said. “Ultimately, the additional benefits SPP brought to the table with respect to the dispatch across DC ties, [and] their overall culture of responsiveness and collaboration” helped Mountain West members make their choice, Kline said.

“Each company had its own evaluation,” said Xcel’s Joe Taylor, one of the primary leads in Mountain West’s integration efforts. “We got together and said, ‘Who could we reach consensus around?’ SPP was the entity the 10 companies could go forward with.”

SPP Vice President of Engineering Lanny Nickell later told RTO Insider that Kline and Taylor’s comments made him feel proud.

“Our culture is something we have worked hard with our members to develop. We haven’t done it alone,” he said. “It’s something that sets us apart from other RTOs. What we do is not that different from other RTOs, but how we do it is.”

SPP expects to file Tariff revisions with FERC that incorporate changes to the governing documents following RTO board approval, which could come next summer. FERC’s review is expected to take 60-180 days.

Xcel and Black Hills are planning ask the Colorado PUC to approve their integration into SPP and put in place cost-recovery rate mechanisms. The companies will file separately but are flexible about timing their filings with SPP’s FERC filing or 60 days later, allowing for any “deficiencies” to be addressed.

SPP has added a section to its website devoted to Mountain West’s integration to help stakeholders and others keep up with developments.

“I feel like I’m in Niagara Falls drowning,” said Commissioner Frances Koncilja, who facilitated the session.

Koncilja said the PUC will schedule at least three more information sessions, with the hope of getting a FERC commissioner to attend one of them. Later sessions will be devoted to a cost-benefit analysis of integration and Colorado-specific issues.