SPP Takes AECI Dispute over Winter Storm Charges to FERC

SPP has filed a request with FERC that the commission take immediate action in a dispute between the grid operator and Associated Electric Cooperative Inc. (AECI).

The RTO filed its Section 207 request on April 20, asking FERC to assert its exclusive or primary jurisdiction and determine that it properly compensated AECI for emergency power provided during the February 2021 winter storm as it scrounged for power from its neighbors to meet demand.

It also asked the commission to find that:

• the transactions in question are governed by SPP’s tariff;
• AECI is entitled only to the compensation provided for under the tariff under federal law; and
• the RTO correctly calculated payments and paid the cooperative all the compensation owed as an SPP market participant.

SPP requested the commission act expeditiously to preserve its exclusive jurisdiction over the issues in dispute. AECI has taken its complaint to the U.S. District Court for Western Missouri, where it filed in February (6:22cv3030).

AECI is seeking to recover $37.64 million from SPP for the emergency power it provided during the storm. That includes $29.4 million for the costs to provide the power and $8.24 million in day-ahead residual unit commitment (DARUC) make whole payments SPP has charged the cooperative.

AECI said it was obligated to reimburse the market for other resources that were committed during the emergency events, but did not itself receive any such payments for its resources. It said SPP has not reimbursed the cooperative for any of the make whole payments.

The organization’s representatives discussed the dispute several times last year and this year, SPP said. It said AECI did not follow all of the JOA’s dispute-resolution’s formal steps and that no mutual resolution was reached through the informal discussions.

SPP has filed a motion to dismiss the lawsuit. An RTO spokesperson said the grid operator is waiting on orders from FERC and the court and is unable to provide further comment.

MMU Releases Winter Market Report

Wind energy grabbed a 42% share of SPP’s generation mix during the winter, a 35.5% increase from the previous winter, according to the Market Monitoring Unit’s (MMU) quarterly State of the Market report.

The MMU said wind generation was the primary fuel type during the most recent winter, an increase from 31% the prior winter. Coal and natural gas thermal generation decreased between the two winters, from 38% to 33% and from 21% to 16%, respectively.

Other highlights from the report, which covered December 2021 to February 2022:

• • • Day-ahead prices increased from an average of $18.18/MWh during the 2020 winter to $27.95/MWh in the most recent winter, a 54% increase. Real-time prices increased from an average of $16.93/MWh two years ago to $24.32/MWh in 2022, a 44% increase.
    • Average winter monthly outages and derates returned to normal after the 2021 winter storm, totaling 29,100 GWh.
    • Overall, real-time market congestion for intervals with breached flowgates increased to 82% of all intervals, a substantial increase from 2021 (59%) and 2020 (34%). Analysis indicates that over the last three winters, the percentage of intervals with breached market-to-market (M2M) flowgates has increased from 33% of all intervals to 82%, indicating M2M flowgates are a large factor in increased flowgate breaches.
    • Transmission congestion rights (TCR) funding during the winter came in at 84%, down from 98% the winter before. The MMU partially attributed the low funding levels to significant outages not found in the TCR model as underfunding worsened to $101 million, up $93 million from the previous year.
    • The 2021 frequently constrained area (FCA) study had similar congestion patterns as previous years, but with more frequent and higher congestion costs. The study identified the southwest Missouri and southeast Oklahoma areas to be added as FCAs.

The MMU will host a webinar to discuss the report on a to be determined date.

Competitive Tx Process Improvements

The Transmission Owner Selection Process Task Force is soliciting stakeholder feedback as it works to improve the RTO’s competitive transmission project selection process. The feedback is due this Wednesday.

SPP has conducted a similar process after each of the four competitive projects it has awarded. The most recent came last month when the grid operator’s board approved NextEra Energy Transmission Southwest’s selection to build a 48-mile, 345-kV transmission line in Oklahoma. (See SPP Board of Directors/Markets Committee Briefs: April 26, 2022.)

The task force is conducting its work even as FERC has backed off some of its Order 1000 requirements. The commission last month issued a transmission planning rules proposal that would offer incumbent TOs a federal right of first refusal on certain regional projects. (See ANALYSIS: FERC Giving up on Transmission Competition?)