The panel of independent directors overseeing SPP Markets+’s development in the Western Interconnection lent its approval to the market’s draft tariff March 1, the culmination of months of drafting and refinement.
The tariff still must be approved by SPP’s Board of Directors before it can be filed with FERC by the end of the month. The board will hold a webinar March 25 to review the tariff.
“Moments like this, sometimes they can be understated. This is really a momentous occasion,” Steve Wright, chair of the Interim Markets+ Independent Panel (IMIP), said during the virtual meeting March 1. “This is a huge project that has significant implications for how the West will operate over the coming years. It shows an incredible amount of dedication and commitment on the part of the various market participants to be able to move this forward and get to this point.”
To move forward, though, the IMIP agreed to temporarily pull language specific to Western Area Power Administration’s Desert Southwest Region (WAPA-DSW), which produces hydro power for customers in Arizona, southern California and southern Nevada.
Antoine Lucas, SPP’s vice president of markets, told the IMIP that staff received a letter from WAPA-DSW on the morning of March 1 that asserted the federal agency’s intention to terminate its Markets+ Phase 1 funding agreement.
“There are certain special provisions included in the Markets+ draft tariff that are only included in the tariff specifically for WAPA, given their status as a federal entity,” Lucas said. “The special provisions included in the tariff on behalf of WAPA-DSW are very much contained into very specific, discrete areas of the tariff. We do not think they will impact any other aspects of the tariff.”
Working in real time, staff and stakeholders agreed to set the language — found in Article 2, Section 6.4 — aside for the time being.
The section’s language will have to be deleted before the tariff is filed with FERC to ensure its approval, Lucas said. The Markets+ legal subgroup will review the WAPA language and provide a recommendation on its inclusion.
Lucas declined to give reasons for WAPA-DSW’s withdrawal from Markets+’s first phase of development and whether it eventually would join the market. He said his interpretation of the letter was that it is a “formal request” to terminate the agreement.
SPP attorney Chris Nolen said the Markets+ participation agreement anticipated a participant terminating their agreement and then joining the market after it goes live. It includes provisions that ensure participants who chose that route still would have to pay what would have been their share of Markets+’s costs.
“We’ve crafted that agreement so that we would avoid the potentiality that some parties might not want to take the risk of a substantial time pending at FERC,” Nolen said, noting the market’s $500,000 monthly run rate.
“The agreement was crafted where if someone leaves before Phase 2, not only do they have to pay their fair share when they come back in, they don’t get any credit for what they paid in Phase 1,” Nolen added. “That just goes to the market bucket to offset the cost of Markets+, so there was a disincentive built into the Phase 1 funding agreement.”
The IMIP easily approved several other pieces of tariff language, including greenhouse gas settlement and substantive and non-substantive items.
“We’re looking at a pretty good pathway to getting this filed by the end of March,” said The Energy Authority’s Laura Trolese, chair of the stakeholder-driven Markets+ Participant Executive Committee.
