Texas Public Utility Commissioner Will McAdams restored the Lone Star State’s voice last week to SPP’s Regional State Committee, arguing against a revision request he said is unfair to his state.

McAdams, taking a break from the PUC’s effort to overhaul the ERCOT market following last February’s devastating winter storm, beat his fellow regulators to the microphone when it came time to get his comments into the record on the measure being considered.

Will McAdams, Texas PUC | SPP

“I’m sure this will elicit debate or conversations,” he said during the RSC’s Jan. 24 meeting. “Texas continues to oppose the revision request. … This policy will have the effect of shifting more costs to Texas ratepayers without any foreseeable benefit to those ratepayers in the future.”

At issue is a proposal (RR483) that promises a “surgical approach” to evaluate byway transmission projects in wind-rich zones. It would allow a byway-funded upgrade to be funded through a regionwide allocation after meeting certain criteria under the “narrow review process.” Projects eligible for this “narrow and limited process” must have base plan upgrade costs eligible for cost allocation under the SPP tariff.

The measure is intended to address FERC-identified deficiencies in the grid operator’s byway facility cost-allocation process. It came just short of endorsement from the Markets and Operations Policy Committee two weeks ago. (See SPP Board, Regulators to Take up Rejected RRs.)

McAdams said the Texas PUC believes the rule change’s proposed highway waiver process would allow certain highway projects to be re-evaluated “solely for cost allocation purposes.” Echoing other members during the MOPC discussion, he said SPP’s regional cost allocation review process offers a remedy for those who think the highway/byway methodology of costs and benefits is unfair.

“No other types of transmission project is afforded this kind of a second chance,” McAdams said.

Under SPP’s highway/byway mechanism, transmission costs are allocated on a voltage threshold basis. Highway facilities, or those above 300 kV, are allocated 100% on regional, postage-stamp basis. Byway facilities, those between 100 and 300 kV, are allocated on a regional basis (33%) and to the pricing zone (67%) in which the facilities are located. Facilities at or below 100 kV are fully allocated to the zone in which they are located.

McAdams pointed out that Texas has “rigid statutes” for its non-ERCOT utilities that are not a part of the deregulated market. He asked whether SPP could “paint a roadmap” to where Texas consumers could see a long-term benefit as the state’s bountiful renewable energy resources continue to grow.

“In the future, and I know that we’re probably going to lose on this … we want to work with the rest of the [RTO]. We want to collaborate,” McAdams said. “We would just like to see if we can get to a point where we can see a reasonable benefit in the future for Texas ratepayers, and then we’re happy to work on the details.”

Joining McAdams in opposing RR483 were regulators from Louisiana, New Mexico and Oklahoma. That was not enough to stop the measure from passing, 7-4. The Board of Directors also approved the revision during its Jan. 25 meeting.

“I think this process is creating an incredibly targeted, narrow waiver process,” Kansas Corporation Commissioner Andrew French said. “By design, it’s probably not going to apply to a lot of projects. It’s going to provide some potential material relief to a few of the most egregious examples where customers in renewable-rich zones or maybe being burdened by costs but not receiving benefits.

“But as far as cost that might be shifted regionwide? That would be pretty minimal,” he said. “As we continue to transition our energy mix to take advantage of some economic energy sources that are that are remote, we do need to make more proactive holistic reforms to cost allocation. We need to continue to look at this because that’s ultimately going to be one of the bigger challenges we face.”

Four days later during a PUC open meeting, McAdams told his fellow commissioners the proposal “socializes costs for certain generation facilities in their home regions for the interconnection of the facilities.”

Noting that SPP’s East Texas and West Texas footprints account for about 30% of its load, he said that if RR483 is “reflective of future policy adjustments at SPP, it bears watching.”

“I’ll be working … to share our concerns so that SPP’s Texas ratepayers are not unduly subsidizing projects that are unbeneficial projects where we see no benefit,” McAdams said.

The RSC also endorsed RR476, which accepts storage resources as transmission assets. The measure defines them as “storage-as-transmission-only assets” and requires them to register as market storage resources in the Integrated Marketplace to account for their injections and withdrawals.

Staff Can Return to Office March 1

SPP has announced an optional return-to-the-office program for staff, effective March 1,

“I’m not a betting person, but if I were, I’m betting we’ll be together in April,” CEO Barbara Sugg said, referencing the RTO’s quarterly governance meetings.

She urged stakeholders not to lose patience with continued restrictions, which have prevented her from meeting publicly in person with the board and key stakeholders. Sugg was named CEO in January 2020, shortly before the pandemic began. (See SPP Board Taps Barbara Sugg as New CEO.)

“So far, she has refused to meet with us in person,” board Chair Larry Altenbaumer joked. “We hope to change that in the not-so-near future.”

Given the lack of travel in 2021, the RSC came in more than 99% under budget last year, spending $3,634 of a planned $498,000. The committee’s annual audit, which cost $3,000, accounted for the bulk of the spending.

“A lack of expenditures does not mean a lack of work,” said Paul Suskie, the committee’s staff secretary.

Coal Edges Wind as No. 1 Fuel

Coal-fired generation slightly outpaced wind in SPP’s fuel mix last year, Bruce Rew, senior vice president of operations, said during the quarterly joint stakeholder meeting.

Coal generation accounted for 35.7% of the fuel mix last year, while wind made up 34.6%. Natural gas was 19.9% in the face of increased prices.

Rew said SPP began 2022 with 30.5 GW of available wind generation. It accounted for as much as 70.49% of the RTO’s generation Dec. 26, when it produced almost 21 GW of the 27.23 GW of total load.

The Integrated Marketplace now has 281 market participants, with 178 of them classified as financial-only and 103 as asset-owning, Rew said.