SPP stakeholders Friday unanimously approved an urgent revision request that expands the ability of market participants facing fuel limitations to include opportunity costs in their mitigated offers.
The Market Monitoring Unit (MMU) drafted the revision request (RR452) over concerns that a potential rail strike and other coal-delivery issues could create difficulties in meeting system demand in late summer and this winter.
The measure creates a new circumstance for fuel limitations caused by abnormal fuel supply, transportation or market limitations not rising to the level of force majeure. Documentation must be provided to the MMU for its determination of eligibility on case-by-case basis. Current rail limitations fall under the new language.
The Markets and Operations Policy Committee passed the measure 56-0, with nine abstentions, during a special conference call. The change was added to the Integrated Marketplace’s protocols before the work week ended. The Market and Regional Tariff Working Groups also approved it.
MMU supervisor Raleigh Mohr | SPPRaleigh Mohr, an MMU supervisor, said the Monitor saw a need for a transparent market mechanism to conserve scarce fuel when conditions do not rise to force majeure. He said the change is both a market benefit and a reliability benefit.
“Coal deliveries are falling short of nominated demand from our market participants,” Mohr said. “The market benefit is that the opportunity cost of the scarce fuel is transparent in the market price. The reliability benefit is that that this change would slow down or alleviate some of the issues being seen immediately with the coal transportation constraints … by assigning an opportunity cost to it.”
Oklahoma Gas & Electric’s Usha Turner spoke for several MOPC members concerned about RR452’s unintended consequences and its lack of parameters. She said that based on her reading of the protocols, “force majeure very clearly includes labor disputes, labor material shortages [and] restrictions imposed by lawfully established civilian authorities.”
“I’m not sure why the agreement of an opportunity cost adder isn’t already within the MMU’s authority,” Turner said. “It seems to me that the language is already there. So, the question is kind of, ‘Why do we need this language?’ We’re not adding something entirely new. That isn’t a declared force majeure or biofuel supplier or a permit limit by EPA or something specific. It is unbounded.”
To ease concerns, the MMU said it would update MOPC during its October meeting on the measure’s implementation and potential bounds to limit the scope of opportunity costs.
“There are tariff elements we have to work with. We want to see if this tool is effective,” MMU Director Keith Collins said.
Email Vote Held on Temporary RAS
MOPC declined to act on a last-minute agenda addition requesting endorsement of modification to a temporary remedial action scheme (RAS). However, members did agree to conduct an email vote that will close Friday.
The Transmission Working Group approved the temporary RAS early last week, revising its operation to not last more than two years. Invenergy’s Arash Ghodsian noted that the minor modification was the only change to a previously approved RAS.
Invenergy proposed the temporary scheme so that its Thunderhead Wind Farm can operate at its full nameplate capacity (300 MW) when it becomes operational later this fall. The facility, located in northeast Nebraska, was to interconnect with Nebraska Public Power District’s R-Line, a proposed 220-mile 345-kV line put on hold in 2020 when a U.S. district court revoked a federal permit because it would disturb the endangered American burying beetle during construction.
Without the R-Line, Thunderhead is limited to 195 MW. The RAS would detect when a nearby 345-kV line is open and trigger a direct trip of circuit breakers at Thunderhead.
The Operating Reliability Working Group and the System Protection and Control Advisory Group have joined the TWG in endorsing the proposal.
