Expanding SPP’s full RTO into the grid operator’s Western Energy Imbalance Service (WEIS) could produce up to $89 million in annual savings, according to a study commissioned by WEIS members.
The Brattle Group study evaluated adjusted production cost (APC) savings and reported potential market benefits for expanding the SPP RTO into the WEIS footprint. The study estimates adjusted production cost savings of $71 million per year under average hydrology conditions. Those savings increase to $89 million per year under severe drought conditions.
Summary of Brattle study’s APC, wheeling revenue benefits | Brattle Group
Westside benefits range from $68 million to $81 million a year, according to the study. Eastside benefits are $3 million to $8 million annually under the study’s base and low-hydro scenarios.
“We’re pleased that the study reinforces the promise of an organized power market and our partnership with [SPP],” Colorado Springs Utilities CEO Aram Benyamin said in a statement. “The benefits are clear — millions of dollars in annual savings by having access to regional energy producers and the reliable and cost-effective integration of additional carbon-free energy resources into our system. The future is exciting.”
The utility was one of several prospective SPP RTO West participants who asked for the studies. Others included Basin Electric Power Cooperative, Deseret Power Electric Cooperative, Tri-State Generation and Transmission Association, Municipal Energy Agency of Nebraska (MEAN), and the Western Area Power Administration’s (WAPA) Upper Great Plains and Rocky Mountain regions and its Colorado River Storage Project.
All participate in SPP’s WEIS, which has been in operation since February 2021. They also receive reliability coordinator services from the grid operator. Tri-State, WAPA UGP region, Basin Electric and MEAN are already SPP RTO members in the Eastern Interconnection.
The study used an integrated east-west model based on data from SPP and WECC. It updates a 2020 Brattle study for SPP that projected $49 million in annual savings for current and new members by using new modeling assumptions about participant footprints, generation portfolios, natural gas prices and projected hydrology conditions.
The utilities said the APC study did not quantify other potential operational and reliability benefits such as balancing authority operations, coordinated resource adequacy and an integrated wholesale market that optimizes real-time, day-ahead and ancillary services. They said SPP’s RTO processes could improve transmission planning and development needed to support growing electricity demand and add more generation resources, including renewables.
WAPA CEO Tracey LeBeau said the study will help inform the agency’s next steps at it evaluates SPP membership.
“As always, we are committed to collaborating with our customers and stakeholders as we assess this opportunity,” she said. “Any decision to move forward with final negotiations for SPP RTO membership will be consistent with our statutory requirements and involve the appropriate public processes.”
Barbara Sugg, SPP | © RTO Insider LLC
“SPP understands the need for prospective SPP RTO members in the Western Interconnection to perform a revised Brattle study with their unique sensitivities,” SPP CEO Barbara Sugg said in an emailed statement. “We’re pleased the results of the updated study show a continued value for all participants.”
The study does not mean the utilities will join the SPP RTO, they said. The participating organizations will each continue their internal review and approval processes to determine whether they will proceed on the next steps to RTO membership.
“The most critical thing we do for our members and consumer-owners is to provide reliable, affordable and responsible electricity,” Basin Electric CEO Todd Telesz said. “We are pleased that the savings outlined in the study align with what our experience has shown so far — participation in regional transmission organization markets brings increased value to our membership.”
