State regulatory staff working on SPP’s review of the RTO’s performance during the February winter storm said last week they have narrowed the analysis focus to resource adequacy.

John Krajewski, chair of the ad hoc regulatory group helping with the review and a consultant to the Nebraska Power Review Board, told the Regional State Committee on April 26 that the group thinks “resource adequacy is the clear culprit on this.”

“It’s really clear [resource adequacy] is where we need to look at where things have failed, and where things can be improved going forward,” Krajewski told state regulators.

He said the group has accelerated its schedule by meeting every other week. Some members are also attending Supply Adequacy Working Group meetings, Krarjewski said.

The group is drafting a report that will be rolled into the broader report SPP is preparing. Like other groups involved in the process, which involves five parallel workstreams, the ad hoc team has been holding closed-door meetings. (See “Winter Storm Review,” SPP MOPC Briefs: April 12-13, 2021.)

“Having closed sessions with the [Market Monitoring Unit] and [SPP] staff has really helped us to have frank conversations about the issues without fear of publication or being used against specific public utilities,” Krajewski said.

The group hopes to open its meetings this month.

Huser Joins Committee Leadership

The RSC approved its nominating committee’s recommendation that Iowa Utilities Board Chair Geri Huser be named the group’s secretary and treasurer. She replaces DeAnn Walker, who resigned from the Texas Public Utility Commission in March.

Without Walker, Texas is the only one of SPP’s 14 states not represented on the RSC. The commission’s original three members have all resigned following the grid’s near collapse during the February storm. Two new members were recently appointed to the bench, but their focus is squarely on overhauling ERCOT’s governance.

RSC President Kristie Fiegen, vice chair of the South Dakota Public Utilities Commission, applauded the committee and its Cost Allocation Working Group for their continued involvement in a plethora of initiatives, despite working remotely.

“I’ve never seen the RSC and CAWG members so engaged,” she said.

July RSC, Board Meetings in Person?

SPP CEO Barbara Sugg said that, barring a spike in Arkansas’ COVID-19 case count, the July RSC and board meetings will be held on the RTO’s Little Rock campus.

Seating will be limited to 60 or 70 attendees, who will be seated 5 feet apart. Invitations will be sent to the directors, RSC members, CAWG members and the Members Committee. The directors and stakeholders will be required to respond as to whether they intend to attend. The remaining seats will be allocated on a first-come, first-serve basis.

Sugg said SPP will not require or verify vaccinations. Attendees will be asked to wear masks whenever they are not seated, she said.

“‘Unprecedented’ is the word of the year over the last 12 months,” she said, referring to the pandemic, last year’s widespread social unrest and February’s extreme weather.

Staff: $2.14B Savings for Members

Sugg’s briefing was one of several staff updates during the quarterly stakeholder briefing. COO Lanny Nickell shared the results of the grid operator’s recent yearlong effort to calculate the benefits of SPP membership, which found that its reliability coordination, transmission planning, wholesale markets and other services provided its members $2.14 billion in total savings.

Nickell said that resulted in a benefit-to-cost ratio of 14-to-1 when taking out $155.3 million in net revenue requirement costs. According to a report, members accrued $768.4 million in benefits from SPP’s transmission-planning processes, $774.3 million from the Integrated Marketplace and another $603.7 million from the grid’s regional operation.

“We tried to derive the value associated with having a market that facilitates the delivery of all the resources we have available to us in a more economical way than individual members would have on their own, without the geographic diversity we have,” Nickell said. “We’ll continue to evolve this report and make it better.”

A 2016 transmission-value study indicated that for every dollar of transmission investment made in 2012-2014, members could expect at least a $3.50 benefit to ratepayers. (See SPP Begins Promotional Campaign to Tout Transmission Value.)

Nickell also reported on a series of indicators that generally painted a favorable picture of SPP’s overall performance. He said first-quarter key performance indicators — based on system and survey data, stakeholder feedback and internal metrics — show the organization meets or exceeds its customers’ expectations in three of four broad categories:

• stakeholders’ engagement and support of organizational initiatives;
• a balance of economics and reliability while responsibly providing valuable services at affordable costs; and
• staying ahead of industry trends while enacting a forward-looking strategy.

The report indicated that SPP needs to improve its operational performance, a result of the grid operator’s first load shed in its 80 years during the February storm. “Whenever you shed load, I don’t think you can say anything more than ‘needs improvement,’” Nickell said.

In other reports:

• Senior Vice President of Operations Bruce Rew said SPP set new records for wind and renewable energy’s amount of the fuel mix on April 25 at 3:58 a.m. Wind and renewables registered penetration marks of 82.7% and 85.3%, respectively. “I don’t think we’re going to hit 90% renewable penetration this year,” Rew said, citing transmission limitations.
• Rew said SPP is continuing to integrate the six Western Energy Imbalance Services (WEIS) members who have indicated an interest in joining as RTO members. That process is expected to be completed by the July board meeting. He said several other entities have asked about participating in the WEIS in some form or fashion.
• Michael Desselle, SPP’s chief compliance officer, said the FERC Order 2222 Task Force soon plans to begin outreach to the 531 distribution utilities and 14 state commissions within the RTO’s footprint. FERC recently granted SPP an extension to April 2022 for its compliance filing in the order, which directs RTOs to open their capacity, energy and ancillary service markets to aggregated distribution energy resources.
• Director Graham Edwards said the Strategic Planning Committee has hired Nexant’s consulting practice to add some “new blood and fresh ideas” to one of the Holistic Integrated Tariff Team’s more complicated recommendations: improving SPP’s congestion-hedging practices. “We asked them to think outside the box … and consider every alternative,” Edwards said of Nexant, which is developing models to analyze data on counterflows. A report is expected by July. The recommendation is one of only seven HITT recommendations still in progress; the other 19 having been deemed incomplete.