Working Groups Begin Addressing Grid of the Future

KANSAS CITY, Mo. — SPP members and the RTO’s Board of Directors last week embraced an advisory group’s report on a future grid that is fast approaching, directing stakeholder groups to begin addressing the group’s recommendations.

The board on April 25 accepted the Future Grid Strategy Advisory Group’s (FGSAG) report that identified potential gaps between future state projections and current trajectories, and urged increased organizational awareness of the opportunities to shape the future grid.

The directors had charged the group in 2021 to explore how the grid will change over the next 10 to 15 years and to make recommendations that help SPP and its membership prepare for those changes. The report identifies trends and strategic pathways that could be disruptive and game changing and makes 32 recommendations to address them.

SPP says the grid’s future is “vitally important” to its stakeholders and that the FGSAG’s work sets the stage for their discussions and readies staff to meet its members’ needs. Of course, that work will have to be balanced with ongoing initiatives.

“We are often dealing with what’s right in front of us and trying to react to changes that are occurring. … Things can look very complicated when we’re trying to address them,” Advanced Power Alliance’s Steve Gaw, a member of the group, said during the board’s quarterly meeting. “If we only look down in front of our feet at what we are about to step on, we sometimes lose our way because we don’t look up. This is an attempt I think not to say that we should be constantly looking up and forgetting what’s right in front of us, but an attempt to balance what’s going on out ways in front of us so that we don’t lose our way with distraction of what’s the latest urgency.”

“I think one of the challenges is how do you balance all of this new work with the existing work,” Director John Cupparo said. “The work groups that are going to be tasked these assignments would come back with some timelines and work plans for how that work will fit in with all the existing [work] so that we can see the balancing of that and understand the tradeoffs.”

The FGSAG gathered assessments last year from surveys, industry experts and organizational expertise to compile a list of recommendations. The Strategic Planning Committee endorsed the work in January and requested the board to direct the appropriate organizational groups to begin considering each recommendation.

The group categorized the results into four areas: consumer trends, policy implications, resource impacts and transmission possibilities. Four sub-teams then drafted white papers that examined each topic’s concerns and defined preliminary recommendations. Because the sub-teams’ recommendations had some overlap and common themes, the full FGSAG reviewed and consolidated them into a final list, grouped into five categories:

• • • energy adequacy/modeling/planning;
    • grid services/market design/operations;
    • transmission;
    • demand-side resources; and
    • innovation and collaboration.

The report sets out a three-phase plan to address its recommendations and provide progress reports back to the SPC:

• • • educate primary working groups on the relevant recommendation and secondary and advisory working groups for input as needed;
    • draft initiatives that address the recommendations and develop tasks and outcomes to ensure their inclusion in SPP’s comprehensive roadmap; and
    • report quarterly on the initiatives’ progress and update the board on their implementation’s appropriateness, scope and pace.

The effort has been led by Mark Ahlstrom, NextEra Energy Resources’ vice president of renewable energy policy and board chair of Energy Systems Integration Group, a nonprofit engineering, resources and education association.

“Basically, what we’re planning to do is to take the recommendations that apply to each of the organizational groups out to them over the next six months or so, start the process of educating them, helping them understand it, get their feedback, and then engage other secondary and advisory groups,” Ahlstrom said. “It’s going to be an evolving set of things that we have to make sure we’re on top of and we get feedback and we evolve and improve as we go. I think you’re going to be seeing a lot of us as we continue to make sure that we keep ahead of the curve on what has to be done before we get to that 10- to 15-year time frame.”

The Inflation Reduction Act has added a complicating factor. The FGSAG said it attempted to document the legislation’s expected implications but that it will take more time and analysis to fully understand and address all its implications on generation, electrification, loads for green hydrogen production and economic development.

“What is already certain, though, is that the IRA’s impact on the SPP region will be dramatic,” the report said, pointing to tax credits for renewable, nuclear, green hydrogen production and energy storage.

“I can’t emphasize enough this is not going to be a one-and-done,” Ahlstrom said. “This is going to be an ongoing activity, but hopefully about a year from now, we would expect to see some sort of plan about how this will be taken up in methodical way by the various organizational groups and by staff.”

MMU Report: Energy Prices up

SPP’s Market Monitoring Unit gave the board and stakeholders a first peek at its annual report on the SPP market and its outcomes that reflect changing conditions.

According to the report, high natural gas prices resulted in increasing energy prices; the Panhandle Eastern hub’s average gas price of $5.83/MMBtu, up 69% from the year before, led to day-ahead and real-time prices of $48/MWh and $43/MWh, respectively, up 80% and 75% from 2021. Data from February 2021 was excluded to avoid skewing the metrics.

The SPP market also experienced continued higher renewable penetration and increased make-whole payments, congestion and revenue neutrality uplift. Keith Collins, the MMU’s vice president, said he wouldn’t be surprised if wind energy reaches a 40% share of SPP’s generation mix this year.

“SPP is in fact a wind system. At one time it was a coal system, but I think SPP is in fact a wind-dominated system,” he told stakeholders.

The MMU said the market’s challenges — increasing variability and supply uncertainty, out-of-market reliability actions, higher make-whole payments and more negative prices — are not necessarily new developments. It said addressing resource adequacy is “perhaps the most important lesson” from the severe winter storms of the last two years; the key issues include a lack of a seasonal resource adequacy requirement; fuel availability risks; correlated output and outages among similar resources; and an accreditation process that does not reflect actual resource performance.

“The SPP system was lucky to have significant imports from MISO, PJM and others. SPP cannot plan to count on these systems to help SPP in a future event as a wider regional cold snap could limit imports,” the report says.

“It’s important to know that the resources we have in the system can be counted on during these events,” Collins said. “We need incentives to ensure that that capacity is available. … We know we’re moving to winter [resource adequacy] requirements. I think we’ve seen evidence that having requirements in the shoulder periods as well is actually a growing importance.”

The MMU is adding four new recommendations for 2022:

• • • consider limitations on virtual trading during emergency conditions;
    • address limitations with the ramp capability introduced last year;
    • improve situational awareness of transmission upgrades and the process to reassign projects; and
    • improve congestion-hedging mechanisms to make them more equitable.

The Monitor said it “has and will continue to engage in the SPP stakeholder processes to help promote improved resource adequacy in the SPP market.”

The final market report is expected to be released in May. The 267-page opus will likely meet with approval from Google’s Betsy Beck, who has a market monitoring background and professes to read market reports “back to back, cover to cover every year.”

“I love these State of the Market reports. There’s always so much great information in the report itself,” she said. “The MMU puts a tremendous amount of work and really good analysis, and you can get a sense of all the different pieces of the market — how things are working well together or not — from reading the report.”

Uri Helps SPP Response to Elliott

SPP staff told the board and members that lessons learned from the 2021 winter storm (also known as Winter Storm Uri), many of which are still being incorporated into daily processes, were “extremely helpful” in the grid operator’s response to the December winter storm (also known as Winter Storm Elliott) when accredited generation fell short of demand at times.

Still, staff identified 11 recommendations during a thorough review of its performance during Elliott that could help the RTO and its stakeholders be better prepared for extreme events in the future. The recommended changes are to internal processes, tools or functions and should not require additional resources or stakeholder prioritization to complete, staff said.

The board approved the latest recommendations as part of its consent agenda.

Mike Ross, senior vice president for external affairs and stakeholder relations, said almost two-thirds of recommendations from Uri are complete. He said the rest should be completed by 2025, depending on FERC and other approvals, and that staff have recommended staying the course on the Uri recommendations.

The new recommendations include improving situational awareness of neighboring conditions; adding extreme weather risks to SPP’s transmission planning process; and identifying options to better mitigate and manage congestion during extreme winter events. SPP did not have to shed load during Elliott as it did during Uri, but the balancing authority area came close, and Empire Electric District had to shed about 25 MW of load for 15 minutes. (See “December Storm Raises Same Issues,” SPP MOPC Briefs: Jan. 17-18, 2023.)

“While there was no load shed directed by SPP, we came closer than we would have liked,” Ross said.

The two storms have both presented significant challenges to maintain reliability, staff said. Coal outages and derates were actually worse during Elliott, Ross said, and drove home the point that two “historic” extreme weather events 20 months apart are a harbinger of what the future holds.

“I think we’re going to stop using the term, ‘100-year storm,’” SPP CEO Barbara Sugg said.

Sugg Drops the Mic

Sugg reflected on the year’s first months that included a tornado touching down within a half-mile of the RTO’s headquarters building in Little Rock, Ark., continued market expansion into the Western Interconnection and advancements in clearing the generator interconnection queue’s backlog.

In sharing the organization’s progress against its strategic plan, Sugg pointed to the traditional dinner that follows the Regional State Committee meeting the night before the board meeting as an example of SPP’s stakeholder-driven culture. The casual dinner brings together the board’s directors and the RTO’s staff, members, regulators and other stakeholders.

“It was loud; it was rowdy; and it was fun. It felt like old times, and it was great to see everybody having a good time,” she said. “Just that dinner alone is one of the things that makes SPP extremely unique, because you will not find that in another region. Building relationships … is the cornerstone of SPP and is really what makes SPP great.”

In closing her report to the board, Sugg reiterated a statement she has made before: “There is no place I would rather be than working collaboratively here with all of you and back at the office with all of our amazing staff to achieve our vision of leading our industry to a brighter future while delivering the best energy value. That’s my mic drop moment.”

2022 Annual Report Available

SPP has released its annual report for 2022 and for the third year in a row, it will be in a virtual format.

The report details the grid operator’s performance during the year. The RTO says it provided $3.787 billion in value to its members and expanded the services it is providing stakeholders in the Western Interconnection.

It also summarizes SPP’s response to Elliott, improvements to generation interconnection, development of a consolidated transmission planning process, and staff’s and members’ focus on the future grid.

New Members Committee Reps

The Members Committee welcomed three new representatives who will serve in an interim capacity until they are officially elected during the October membership meeting:

• • • Stacey Burbure, legal counsel for American Electric Power, replacing AEP’s Peggy Simmons;
    • Al Tamimi, vice president of transmission planning and policy for Sunflower Electric Power, replacing retired Sunflower CEO Stuart Lowry; and
    • Christy Walsh, director of federal energy markets for Natural Resources Defense Council’s Sustainable FERC Project, replacing Invenergy’s Daniel Hall.

The meeting was also Tom Christensen’s last as an MC member. He is retiring from Basin Electric Power Cooperative in May as senior vice president of transmission, engineering and construction.

Consent Agenda Passes

Members and the board approved a consent agenda that contained one revision request:

• • • RR530: identifies consistent criteria for when it is acceptable to implement a transmission reconfiguration, and outlines responsibilities for the reliability coordinator and transmission operator in developing mitigation plans to avoid system operating limit exceedances.

The consent agenda included several other items, including:

• • • the Oversight Committee’s recommendation for the 2023 industry expert pool that will review and evaluate proposals for competitive transmission projects. The pool includes 15 holdovers from last year and two new members: independent consultant Frank Lembo, a former chief engineer with Consolidated Edison, and Mark Lawlor, a renewable developer with EDP Renewables and Clean Line Energy Partners.
    • a 26% increase for Basin Electric’s 60-mile, 230-kV sponsored upgrade project in North Dakota near the Canadian border. An additional 5 miles of transmission line bumped the project’s cost from $64.9 million to $81.4 million.