SPP stakeholders last week spent two hours discussing the need for a high-priority congestion study in the Texas Panhandle, only to determine that more discussion is needed.
The Strategic Planning Committee scheduled the two-hour conference call June 26 to review the study’s scope and its scenarios. Despite stakeholder suggestions to relitigate the requirement for the study and consider alternative study methods, SPC Chair Mike Wise successfully kept the group on task.
“These other issues are part [of the discussion] but very tangential,” said Wise, senior vice president of regulatory and market strategy for Golden Spread Electric Cooperative. “We can have a fuller discussion at the next SPC meeting.”
The committee added time to its July 13 face-to-face meeting in Denver, following a two-day Markets and Operations Policy Committee meeting. Members plan to discuss a suggestion by American Electric Power’s Richard Ross that the congestion study evaluate confirmed service and unfilled hedges.
SPP’s Board of Directors directed staff in April to conduct the high-priority study after it canceled a 345-kV transmission project in the area. Chairman Jim Eckelberger agreed the study should take a systemwide look at congestion caused by the proliferation of wind farms. (See SPP Board Cancels Panhandle Line, Seeks New Congestion Study.)
“I’d rather take a little more extra time and do it right, rather than punch on,” SPP Director Larry Altenbaumer said. “I appreciate the complexity of issues out there, but we have to decide how best to deal with the continued growth of wind in our footprint.”
Staff is currently analyzing the saturation point for renewables sinking within SPP to determine at what point the additional generation would “no longer be economic,” SPP Director of Engineering Antoine Lucas said.
“Until then, continue to expect additional requests and more renewables added to the system,” he said. “Renewables are now replacing other renewables at similar price points.”
“This wind is coming on,” the Wind Coalition’s Steve Gaw said. “It doesn’t make sense to not consider its impact on the system. The potential benefits shouldn’t be ignored.”
The SPC did not come to an agreement on the study scenarios. Staff is recommending developing three scenarios from the five thresholds for interconnection costs of renewable energy, ranging up to $100,000/MW. SPP says the previous 7.6 GW of wind placed in service had an average cost of $32,500/MW. Connecting the total studied capacity of 43.3 GW would cost more than $1 million/MW to in part account for needed investment in new transmission infrastructure.
SPP Vice President of Engineering Lanny Nickell said staff is looking at known constraints, rather than future generation, to ease its workload. He said 5.5 GW of wind projects have interconnection agreements and are meeting their milestones.
During the weekend before the call, SPP members Empire District Electric, Kansas City Power & Light, Oklahoma Gas & Electric, Southwestern Public Service and Westar Energy submitted a letter to the SPC and the board’s Members Committee, questioning the value of the study. Signatories said previous staff analysis of congestion in the area showed a benefit only when the models included “extraordinarily high levels of wind.” They said SPP’s next 10-year assessment of transmission needs would “provide a comprehensive solution for the region.”
“We are concerned that a special high-priority study will circumvent the generator interconnection and aggregate study processes that are used to identify cost-causers and the assignment of costs,” the letter said.
Z2 Task Force Suggests its own Retirement
The Z2 Task Force will this month recommend to SPP leadership and stakeholders two alternatives for assigning financial credits and obligations for sponsored transmission upgrades under Attachment Z2 of the RTO’s Tariff.
The group also agreed during its June 27 meeting in Dallas to let its charter expire at the end of July, unless otherwise directed by the board or MOPC.
The group has spent its last few meetings discussing the pros and cons of the two staff-suggested alternatives: granting Z2 credits only to upgrades that increase transfer capability and creating credit payment obligations under a Tariff schedule. (See SPP Members Send Z2 Alternatives to MOPC.)
Task force Chair Denise Buffington, corporate counsel at KCP&L, said she was disappointed the group was “unable to accomplish more.”
“It seems impossible to get folks to pull away from current parochial impacts to focus on the underlying policy decision: Do we want to socialize or subsidize these types of projects, or provide a market mechanism?” Buffington said. “There is no sense beating a dead horse. There is no support for it at this time.”
MMU: Wind Generation up, Coal Production down
SPP wind generation continues to increase at the expense of coal, the RTO’s Market Monitoring Unit said.
Wind accounted for 28% of all energy produced in SPP’s market this spring, up from 22% in 2016 and 15% in 2015. Coal’s share of output has meanwhile dropped to 40%, down from 57% just two years ago.
SPP recorded a North American RTO-high for wind penetration on March 19, when wind accounted for 54.2% of the market’s energy production.
The MMU’s State of the Market report, covering the months of March, April and May, also revealed that rising gas prices have led to a corresponding increase in LMPs.
Gas prices at the Panhandle hub have averaged $2.70/MMBtu this spring, compared to $1.68/MMBtu last year. At the same time, average real-time LMPs increased from $17.07/MWh to $23.48/MWh, while day-ahead prices rose from $17.37/MWh to $23.47/MWh.
— Tom Kleckner
