SPP staff and stakeholders agreed this week on the need for greater collaboration and coordination between the electric and gas industries as they begin the work of addressing the root causes that led to the first load sheds in the RTO’s 80-year history during February’s winter storm.
The discussion picked up where the Markets and Operations Policy Committee left off two weeks ago, when Texas-based stakeholders complained they had firm contracts for fuel deliveries that were negated by force majeure. (See SPP Markets and Operations Policy Committee: Oct. 11-12, 2021.)
“This happened in 2011, and it will happen again,” Southwestern Public Service President David Hudson said during Monday’s joint quarterly stakeholder meeting, referring to a less severe winter storm that also led to rolling blackouts in Texas. “That’s one of the biggest things hiding in the tall grass that’s not being addressed.”
“We can do everything we can to promote coordination between the industries, but better coordination only gets us so far,” Kansas Corporation Commissioner Andrew French said. “The winterization and the lack of production is the bigger issue.”
French said FERC’s and NERC’s preliminary report on the storm contained numerous “aspirational goals” that individual states begin winterizing all their equipment. The agencies’ joint inquiry placed much of the blame on the natural gas industry’s failure to perform. (See FERC, NERC Share Findings on February Winter Storm.)
“No state is going to step forward and place costs on their producers absent an act of Congress, and I don’t think we can rely on it,” French said.
North Dakota Public Service Commissioner Randy Christmann pointed out that northern energy facilities have been weatherizing for years, but that it doesn’t make sense to do so in southern states “because of the costs of winterization … for those few days when it’s needed.”
“We almost seem to be resigning ourselves that we can’t do much about gas weatherization,” said Dave Osburn, Oklahoma Municipal Power Authority’s general manager. “I just hope we as an industry don’t let the issue go. We have to continue to push this issue, because we certainly don’t want to live through another event like this.”
To that end, SPP COO Lanny Nickell said staff and stakeholders have begun developing recommendations addressing the February outages’ root causes. The Board of Directors ordered the work begin immediately when they accepted SPP’s report on the winter storm in July. (See “Grid Operator Releases Report on Performance During Winter Storm,” SPP Board of Directors/Members Committee Briefs: July 26-27.)
Arkansas Public Service Commission Chair Ted Thomas is leading a task force working on issues related to fuel assurance and resource planning and availability, which the report identified as a Tier 1 issue. The Improved Resource Availability Task Force (IRATF) will report to the board and the Regional State Committee and publish monthly status reports on its work. The group will review staff’s potential solutions and recommendations, provide direction and coordinate with other stakeholder groups as necessary.
“It’s like Thanksgiving when all the food hits the table at the same time,” Thomas said. “You keep the wet stuff wet, the hot stuff hot and the cold stuff cold.”
He said the IRATF’s first efforts could include identifying crucial gas infrastructure that is connected to the electric system, similar to Texas’ attempt to map critical infrastructure.
Nickell said the report’s 81 Tier 2 and Tier 3 initiatives are all in progress, except for those related to transmission planning. The work will be prioritized, tracked and reported through SPP’s comprehensive roadmap process, which sets the grid operator’s initiatives over the next two to five years.
“We don’t want to wait on FERC and NERC,” Nickell said, noting that SPP’s effort “aligns pretty well” with the agencies’ final report.
Completing all the initiatives is expected to last several years, Nickell said.
“As we go forward with the initiatives, we’re going to have to be clear about what SPP can do and cannot do and who has authority over the gas system,” Nebraska Power Review Board Member Dennis Grennan said. “We’re going to have to be very, very clear about how far SPP can go with its solutions.”
SPP Sets New Summer Peak
Bruce Rew, SPP’s senior vice president of operations, told stakeholders that the RTO set a new summer peak load of just over 51 GW on July 28, surpassing the previous record of 50.7 GW set in August 2019.
SPP called for conservative operations July 29-30 as summer heat continued to bake the Great Plains. Wind energy reached a high output of 20.7 GW on Aug. 8, accounting for 52.2% of SPP’s load at the time. Wind penetration reached 65.3% of the RTO’s generation mix on Sept. 26, when wind produced 14.8 GW of the total load of 22.7 GW.
Rew said 30.5 GW of wind generation is registered in the market, although only 25.8 GW was available as of Oct. 1. He said SPP currently has 283 market participants, with financial-only players outnumbering asset-owning participants, 181-102.
The Western Energy Imbalance Service market’s second quarter saw average hourly load trended slightly downward by 0.2 GWh. The WEIS market is consistently settling an average of 4 to 5 GWh of net energy imbalance generation per day, Rew said.
Sugg: In-person Meetings Soon
SPP CEO Barbara Sugg teased a potential return of in-person meetings in January in acknowledging that “we all have Zoom fatigue.”
Sugg said the MOPC and Strategic Planning Committee will meet Jan. 10-12 in Oklahoma City, and the board and Members Committee will meet Jan. 24-25 in Little Rock, Ark.
“We hope to see you there,” Sugg told stakeholders.
SPP is once again in a return-to-office mode after a previous attempt was scuttled by the COVID-19 Delta variant’s emergence. Staff have begun a hybrid workplace format that allows more flexibility to work from home while still coming to the office. Employees must spend 50% of the time in the office and managers 75% in the voluntary program. Chief People Officer Kelly Carney said an average of 70 staffers can be found daily on the SPP campus.
Sugg also said SPP has begun preparing to claw back and refund $138 million in transmission-upgrade credits, dating as far back as 2008, as it waits on a response to its rehearing request of the D.C. Circuit Court of Appeals’ August ruling that FERC was correct in reversing a retroactive waiver it had granted the RTO over collecting transmission upgrade costs under the tariff’s Attachment Z2. (See “SPP Asks for Z2 Rehearing,” SPP Markets and Operations Policy Committee: Oct. 11-12, 2021.)
“Our favorite topic from years gone by that we can’t get rid of … the gift that keeps on giving,” she said. “This will be a major undertaking for SPP and our stakeholders.”
RSC Elects New Leadership
The RSC met briefly before the quarterly stakeholder reports and elected its leadership for 2022.
SPP’s state regulators approved North Dakota Commissioner Christmann as their president. He succeeds South Dakota Public Service Commissioner Kristie Fiegen, who will remain on the committee.
KCC Commissioner French will serve as vice president, and Iowa Utilities Board Member Geri Huser will remain treasurer. The committee will lose Grennan, who was honored with a resolution for his six years of service. Grennan was the RSC president in 2020 and also served on several high-level SPP stakeholder groups.
“The last six years on the RSC have gone by so fast it’s really unbelievable,” Grennan said.
Grennan is term-limited, and his tenure on the NPRB will end Jan. 1. He is expected to be replaced on the RSC by NPRB Vice Chair Chuck Hutchison.
Oklahoma Corporation Commissioner Dana Murphy said the Seams Liaison Committee’s rate-pancaking subgroup has sent surveys to 100 MISO and SPP stakeholders and the RTOs themselves as it attempts to resolve rate issues on the RTOs’ seam. The SLC meets again Nov. 18 to discuss the survey’s results.
Murphy volunteered to represent SPP on the SLC subgroup when former Texas Public Utility Commission Chair DeAnn Murphy resigned from the commission earlier this year.
