Staff Finalizing Mitigation Strategy for PRM-deficient LREs

SPP staff last week said they are finalizing a mitigation strategy for load-responsible entities unable to meet the grid operator’s new 15% planning reserve margin and developing several concepts that would make failure to meet the requirements “less costly or less punitive.”

SPP COO Lanny Nickell | SPP

COO Lanny Nickell told the Board of Directors during its Dec. 6 meeting that the concepts include reducing the deficiency payment charge, extending the timeline to cure deficiencies and adding mechanisms to assure capacity.

Staff have been working on the mitigation strategy at the board’s direction since July. It became necessary when the board increased the planning reserve margin from 12% to 15%, effective next year, which left some members complaining they wouldn’t have enough time to meet the requirements. (See SPP Board, Regulators Side with Staff over Reserve Margin.)

“We’re not looking to add that to the tariff on a long-term and permanent basis, but it would give some instant and interim relief,” Nickell said.

He said reducing the deficiency payment would reflect excess capacity’s value when a payment is required after a sudden increase in the PRM requirement. Nickell said the mechanism would incent long-term capacity planning and assess deficiency payments based on multiples of the cost of new entry to LREs that have not met the PRM.

The concept doesn’t relieve LREs of their obligation to comply with their resource adequacy requirements. However, it is applicable to deficient LREs for two years after the PRM change.

SPP is also proposing giving LREs more time to assess and cure their resource adequacy positions and better facilitate submissions on a virtual bulletin board to buy or sell power.

A 12-member strike team of directors, regulators and stakeholders has been meeting weekly since October to vet staff’s work. “We appreciate the fact that they were willing to help and willing to advise staff as we developed our further efforts on a mitigation strategy,” Nickell said.

The 22-person Members Committee unanimously approved staff’s concepts, with one abstention, with its advisory vote.

Staff plan to seek approval this week from the Regional State Committee of the mitigation effort’s applicable concepts. The board in October gave the committee, which comprises state regulators, the OK to file a tariff change with FERC that details how LREs can qualify for and receive exemptions from deficiency payments. (See SPP Board Bypasses Stakeholders on PRM Obligation Exemptions.)

SPP plans to file the tariff revision on behalf of the RSC this week. At the same time, it will draft a revision request for the mitigation concepts and bring that to the board and RSC in January.

Myers, Lang to Lead MOPC

The directors spent the bulk of last week’s meeting reviewing stakeholder evaluations of the board and organizational effectiveness, a stakeholder satisfaction survey, and SPP’s key performance metrics.

They also approved the consent agenda, which included several Corporate Governance Committee recommendations for the Markets and Operations Policy Committee’s leadership and other organizational groups.

As is SPP’s practice, Vice Chair Alan Myers, of ITC Great Plains, assumed the chairmanship previously held by Evergy’s Denise Buffington. The CGC recommended Omaha Public Power District’s Joe Lang as the new vice chair; both will begin their two-year terms on Jan. 1.

Buffington will fill a transmission-owning member’s vacancy on the Strategic Planning Committee. The term expires Dec. 31, 2023.

The CGC also put forward several nominations to serve two-year terms as organizational group chairs:

• John Turner, Western Farmers Electric Cooperative, Modeling Development Working Group.
• Tess Venetz, Xcel Energy, Settlements User Forum.
• Calvin Daniels, Western Farmers Electric Cooperative, Economic Studies Working Group.
• Derek Stafford, Grand River Dam Authority, Operations Training User Forum.
• Jodi Hall, Evergy, Change User Forum.