KANSAS CITY — SPP’s Board of Directors last week approved the scope of a team formed to address resource adequacy challenges and endorsed the group’s plans for dealing with resource accreditation.

SPP’s board and its state regulators created the Resource and Energy Adequacy Leadership (REAL) Team earlier this year. It was clear then to stakeholders that the group had a monumental task in front of it.

The team is charged with providing guidance, prioritization and policy recommendations to increase the assurance that energy can be continuously and cost-effectively provided within SPP’s balancing authority footprint. The team is also expected to address applicable recommendations from the RTO’s grid-of-the-future work and resource-adequacy issues identified by other initiatives.

When REAL Team chair and Texas Public Utility Commissioner Will McAdams found himself staring at a slide during an April 24 presentation to the Regional State Committee, he paused momentarily.

“And this is our implementation calendar,” McAdams said. He paused again. “This is an aggressive calendar, and we’re going to do our best.”

Kansas commissioner and RSC chair Andrew French said the team’s task is even larger than he first imagined in preparing the initial draft scope.

“I knew it would be a heavy lift, but as I’ve listened in on a couple of the first meetings and realized how important these issues are to everyone and how many extra issues there are, we’re realizing it’s going to be a heavy lift,” he said. “I’m more convinced than ever that it’s a worthwhile lift, that strategically, it’s absolutely essential to set the foundation for us moving forward.”

The REAL Team plans to deliver adjustments to SPP’s resource accreditation policy in October. FERC in March rejected SPP’s capacity accreditation methodology for wind and solar resources on procedural grounds and granted clean energy interests’ rehearing request of its prior acceptance. (See FERC Grants Rehearing of SPP Capacity Accreditation Proposal.)

Next year, REAL plans to produce a resource adequacy methodology and related policies, a seasonal resource adequacy construct, value-of-lost-load and expected-unserved-energy metrics, and future capacity accreditation and planning reserve margins.

No wonder McAdams drew chuckles when sharing the team’s deliverables timeline.

SPP’s Bruce Rew | © RTO Insider LLC

“All of this we hope to tackle in year one,” he said.

McAdams said the 14-person team, comprised of SPP board members, stakeholders and state regulators and staff, will be “looking at challenges resulting from resource mix changes, high intermittent energy penetration into the system, and how our [load-responsible entities] can cope with that to ensure a reliable reliability standard is ultimately met.”

“This needs to occur during events of extreme weather, increased demand and evolving customer behavior,” he said. “REAL Team over the next year and possibly onward, will provide guidance, prioritization and policy recommendations to increase assurance that there will be sufficient energy to cost-effectively meet load requirements.”

The RSC last week unanimously approved the REAL Team’s scope. It also endorsed its proposal to respond to the FERC ruling — having the Supply Adequacy Working Group (SAWG) break effective load-carrying capacity (ELCC) and performance-based accreditation into two separate revision requests. REAL said the ELCC change should reflect FERC’s guidance to add a definition of seasonal net peak load and address the accreditation of renewable and thermal resources in a similar manner.

The proposal further directs SAWG to harmonize the two RRs and explain how the treatment of resources is equitable and appropriate, filing both changes with the board and RSC before the October governance meetings.

The Board of Directors approved the motion April 25 as part of its consent agenda.

“This shows us that we need to better describe our methodology with repackaging and re-presenting this policy to the FERC,” McAdams said. “Ultimately, we need to make an attempt to compare them on an apples-to-apples basis, even though the resources are different.

“My hope as chair … is that we start thinking about what FERC can approve in a timely way. These are important policy building blocks that we need to have in place in order to move off first base toward a reliability framework that we can actually defend and build upon and that we can hold the system accountable to,” he added. “We do not want to offer them proposals that they can just reject out of hand, which costs us time that we do not have. We need to be crafting proposals that have a degree of certainty that [they] will be passed.”

Member Value Up to $3.787B

SPP staff updated its member value statement during the quarterly stakeholder briefing that followed the RSC meeting, saying its analysis found the RTO provided $3.79 billion in net savings to members in 2022, a 41% increase from the year before and a 22-to-1 return on investment.

According to the report, the biggest savings came from the Integrated Marketplace’s day-ahead, real-time and transmission markets ($2.3 billion) and reduced costs and required reserves within the RTO’s footprint ($1.03 billion).

“That’s driven mostly by significant increases in the cost of gas and wholesale energy … [When prices rise] the benefit of participating in SPP’s [markets] obviously goes up,” said Mike Ross, SPP’s senior vice president for external affairs and stakeholder relations.

Ross said the market benefits are estimated by comparing what the cost of energy would be in the legacy balancing area versus SPP’s Integrated Marketplace.

“We’ve already seen much lower energy prices to start 2023,” he said.

The annual statement, based on a methodology developed by staff and stakeholders, quantifies the value SPP provides member organizations through reliability coordination, regional transmission planning, market administration and other services.

“This remarkable benefit-cost ratio demonstrates we are driving value beyond reliability,” CEO Barbara Sugg said.

In other quarterly reports:

• SPP said it established new marks for wind energy and renewable energy on March 16 when it hit 23.8 GW and 24.89 GW, respectively, breaking records set in February. The grid operator has more than 32 GW of available wind resources.
• Xcel Energy (NASDAQ:XEL) subsidiary Public Service Co. of Colorado’s April entry into the Western Energy Imbalance Service (WEIS) market has tripled its size to more than 13 GW. The utility’s load topped 6 GW in April, while WEIS’ weekly average this year has regularly been above 3.5 GW. A recent report revealed the WEIS market provided $31.7 million in net benefits to its 12 participating utilities in 2022 at a benefit-cost ratio of 7-to-1.
• SPP’s Integrated Marketplace now has 195 financial-only and 119 asset-owning market participants, for a total of 314.