OKLAHOMA CITY — The Markets and Operations Policy Committee approved Tariff revisions that will set guidelines for distributing revenues from last year’s settlement with MISO over its use of SPP’s transmission grid. Three members opposed the Regional Tariff Working Group’s proposal and eight others abstained.

MISO has agreed to pay SPP and impacted members $9.6 million to settle claims for compensation dating back to 2014. (See SPP Board, Members Discuss MISO Settlement.)

The RTWG drafted language to handle revenues accrued during three phases (Jan. 29, 2014 to Jan. 31, 2016, Feb. 1, 2016 to Jan. 31, 2017, and each Feb. 1 to Jan. 31 period thereafter) and define how they will be collected and distributed.

It also revised other Tariff sections to take the new revenue distribution into account. SPP has said it favored allocating the funds to transmission owners, with benefits flowing through to the grid’s load.

Bill Grant of Xcel Energy opposed the request, saying the issue was not sufficiently vetted through the stakeholder process.

MOPC Endorses Recommendation to Pull Reliability NTCs; Other Projects, STEP Get OK

The MOPC unanimously endorsed staff’s recommendation to withdraw notifications to construct (NTC) for two reliability projects estimated to cost $40 million, including the South Shreveport-Wallace Lake 138-kV rebuild in northwestern Louisiana.

Antoine Lucas, SPP’s director of transmission planning, said the project was originally identified as a reliability need by SPP’s 2015 Integrated Transmission Plan 10-year assessment, but the 2016 ITP Near-Term assessment indicated the project is no longer necessary. It had an $18.6 million cost estimate.

SPP had also proposed the 11-mile project as an interregional project with MISO to meet economic needs, but MISO declined to support it. (See SPP, MISO Conclude Joint Study Empty-Handed.)

The 2016 ITPNT also showed there was no longer need for the Mineola-Grand Saline 69-kV rebuild in East Texas, estimated to cost almost $23 million.

“This project was primarily load driven,” said Midwest Energy’s Bill Dowling. “We really don’t think this is driven by dispatch of resources, but by load.”

Planners said further evaluation is necessary for two other projects, the $36 million Hobart-Roosevelt Tap-Snyder 69-kV rebuild in West Texas and the $7.1 million Linwood-South Shreveport 138-kV rebuild, because additional solutions for these needs were identified in the 2016 ITPNT.

American Electric Power was responsible for all four projects.

The committee also endorsed staff’s recommendation to move forward on two other projects. Members agreed (with six abstentions) no further re-evaluation was needed to construct a new 345/115-kV transformer and links to 345- and 115-kV lines at the Stevens County substation in southwestern Kansas, and agreed (with two abstentions) to remove conditions from an NTC that would provide fast-acting reactive power to a pair of 115-kV substations in southeastern New Mexico.

The Stevens County substation work is a joint project between Southwestern Public Service and Sunflower Electric Power, and has a projected $31.9 million cost, up from an original estimate of $18.3 million. Questioned on the costs, Lucas said the estimates “could be reduced once design work starts.”

The 111-kV China Draw-Road Runner projects belong to SPS. Despite an $84.8 million price tag, Lucas said the 2016 ITPNT indicates a need remains and it has been identified as the best solution.

“Once we re-evaluate a project and it’s still the right project, we recommend removing conditions,” Lucas said.

The MOPC also unanimously endorsed staff’s recommendation that the Board of Directors next week approve SPP’s 2016 Transmission Expansion Plan report (STEP), a comprehensive listing of all the RTO’s transmission projects over a 20-year planning horizon.

The 2016 STEP consists of 480 upgrades with a total cost of $6.1 billion. The projects include transmission-upgrade and generation-interconnection requests, approved high-priority upgrades and approved projects from the ITP 20-year, 10-year and near-term assessments.

Lucas said SPP members completed 93 transmission upgrades worth $856 million in 2015. He said the RTO also issued 50 NTCs for another $519.9 million worth of projects.

Staff will finalize its 2016 ITPNT this April and the 2017 ITP10 in January 2017.

MOPC Rejects Tariff Revision Allocating Manual Commitments

A Tariff revision to allocate the cost of manual commitments for voltage-related local reliability issues failed to receive approval from the MOPC. The measure, which would assess costs based on the asset owner’s impacted load, received only 41.3% approval from members, with 29 no votes and 17 abstentions.

“We’ve deviated from the philosophy of network load,” Xcel’s Grant said. “This whole discussion started with non-jurisdictional entities not solving the problem, but we went way further than we needed to go. It would be a disproportionate shift for New Mexico.”

Some members questioned whether SPP staff should have drafted the revision request and determined cost allocation in the first place.

“We as staff said one of our major principles is to take uplift and give it to the people who are causing it,” said SPP Executive Vice President and Chief Operating Officer Carl Monroe. “This is just another way to do that … and it’s going through the process. Don’t vote on this if you think it’s a short-term solution. It’s going to take a long time to get some of those things fixed.”

The committee endorsed two other revision requests from the Market Working Group, in addition to 12 others approved as part of the consent agenda:

• RR 124, which adds language from the Tariff to the market protocols supporting SPP’s ability to reject incomplete market registration applications, was approved unanimously.
• RR 127, approved with two no votes and four abstentions, eliminates the opportunity for jointly owned units (JOUs) to game make-whole payments by putting in a larger-than-normal energy offer curve and getting dispatched to minimum. For JOUs using the combined resource option, the rule takes all shares’ pricing points and aggregates them into one energy offer curve.

The MWG also shared its responses to nine recommendations by SPP’s Market Monitoring Unit to improve the Integrated Marketplace. Working with input from the MOPC leadership, the MWG developed an action plan on the Monitor’s recommendations in November for presentation to the Board of Directors next week.

The Monitor’s annual State of the Market report in July identified issues ranging from improving quick-start logic to market-power mitigation conduct thresholds. Several of the proposals have been implemented or are in process. (See SPP Monitor Report Shows ‘Maturing’ Integrated Marketplace.)

“We’re not saying [these recommendations solve] all of our problems, but [they do] a good effort moving everything forward we proposed,” said SPP’s MMU director, Alan McQueen.

‘Real Work’ to Begin on 2017 ITP10

Having completed a resource plan and a resource-siting plan, the working group developing the 2017 ITP10 will now begin building the economic model, assess constraints and do some benchmarking.

“Now the real work begins,” MOPC Chair Noman Williams said.

ITC Holdings’ Alan Myers, chair of the Economic Studies Working Group, said Clean Power Plan compliance will be a key part of the model. The group has developed three futures, two of which incorporate regional and state-level compliance and a third that assumes the CPP is not implemented.

“The ITP10 is the first salvo” in dealing with the CPP, Myers said. “I think we’re going to see more detailed studies.”

Reacting to concerns from Oklahoma Gas & Electric’s Greg McAuley that the resource plan didn’t include current load, Myers agreed the plan was a little out of date, having been developed and approved last year.

“The problem is if we do this over and over again, you never get to the finish line,” he said.

Myers shared the working group’s renewable and conventional resource siting plans as part of his informational update. He said the ESWG identified state mandates and goals, totaled what renewables were in place and then looked for gaps.

“It’s not actual shortfalls, but timing,” he said, noting some companies entered into new renewable contracts following the analysis.

Task Force Agrees on 18-month Planning Cycle, Common Model

The Transmission Planning Improvement Task Force said it has reached consensus on an 18-month planning cycle, a common planning model, a planning process and a standardized scope.

NextEra Energy Transmission’s Brian Gedrich, the task force chairman, told the MOPC the stakeholder process approvals and model development are bottlenecks and can limit the planning process’s frequency.

“The way the ITP20 is today, it doesn’t add value,” Gedrich said, pointing to “resource-intensive” work that provides “primarily strategic value, and not actionable results.”

Gedrich said the group has agreed on a strawman proposal that identifies the models that need to be built and removes near-term recommendations.

“The concern was the two-year economic assessment we’re moving to is much closer to what’s happening in real time,” he said.

The task force has scheduled a Feb. 3-4 meeting in Dallas, when staff is to unveil the final strawman, and an educational forum before the next MOPC meeting. The committee will then be asked to endorse the proposals to the board.

Task Force Continues Work on Improving Transparency

A task force working on improving transparency of members’ tariff-revision requests and proposing changes to SPP’s current prioritization processes updated the MOPC on its current progress.

The group is designing a structure in which members can submit revision requests and “enhancement” requests online through SPP’s Request Management System (RMS). (See “Prioritizing Revision Requests” in SPP Markets and Operations Committee Briefs.)

Staff prioritizes the requests in groups (in flight, primary, secondary, tertiary and other) before publishing them in a portfolio. Stakeholders can comment on the requests through the RMS and during quarterly stakeholder prioritization meetings one month before MOPC meetings.

Stakeholders can still request MOPC guidance and discussion on items of interest.

“When SPP staff puts in the time to explain issues, people may not realize that’s just starting the discussion. There’s no pre-determined outcome,” said SPP director Phyllis Bernard. “The board has been very encouraging in that [staff] get a strawman out, so we can have substantial conversations.”

“When we get on a call with stakeholders, they’re expressing their opinions and staff expresses their opinions,” Carl Monroe said. “MOPC becomes the appeals group for that.”

The task force received 68 comments during the comment period, and 38 stakeholders from 24 member organizations participated in the first quarterly prioritization meeting. That led to five action items for SPP staff.

The 2016 cycle begins Jan. 30, the deadline for submitting new enhancement requests. The next quarterly prioritization meeting will be held March 25.

Order 1000 Interregional Filing

SPP staff updated the MOPC on its failed attempt to create a new class of seams transmission projects, an effort to supplement its approved highway-byway cost allocation that was rejected by FERC on Nov. 30. (See FERC Rejects SPP Proposal for Seams Transmission Projects.)

“We had hoped by developing principles, we would avoid gaps,” said SPP’s Sam Loudenslager. “We realized there are still gaps in the process after the FERC order.”

“If FERC thinks … seams projects are already covered under Order 1000 compliance, do we have a problem?” Richard Ross of AEP asked.

“I think we do,” Loudenslager said. “Seams projects will not fit under the interregional process, where we do things on a project-by-project basis.”

“These projects come out of the joint operating agreement,” Monroe said. “It’s hard to take a project out of these other processes and use the Tariff to pay that through cost allocation.”

“We need a seams partner willing to look at these highway-byway projects,” said the Nebraska Public Power District’s Paul Malone. “MISO and [the Southeastern Regional Transmission Planning] don’t recognize these.”

Generation Group Recommends No Changes for Renewable Ratings

The Generation Working Group presented its bi-annual report on generating unit ratings, recommending no changes in the methodology for establishing wind and solar facilities’ net capability. Its report on summer 2015 looked at wind generation’s historical performance and commitment data from the Integrated Marketplace and compared generation-outage data to the previous summer season.

Noting the report’s information is compiled annually, AEP’s Ross wondered whether gathering the data every other year would suffice.

“There’s a lot of data that goes into this report,” said Mitch Williams of Western Farmers Electric Cooperative. “Doing this every year keeps it current.”

Violations Within SPP RE Drop into Double Digits

The SPP Regional Entity’s quarterly report revealed violations within the RE dropped below triple digits for the first time since 2009.

“The violations are less severe than they were a few years ago. Seventy-five percent of the issues … are someone being late turning something in or someone forgetting to sign a document,” the RE’s general manager, Ron Ciesiel, told members. “You’re helping by identifying issues before they fester and turning into real problems.”

The RE reported only 21 events in 2015, with just one reaching category 2 status and nine reaching category 1 status on a 5-point scale.

Ciesiel said critical cyber asset identification was the most frequent violation.

— Tom Kleckner