FERC issued a pair of orders on SPP’s markets at its regular meeting Jan. 16, accepting new price formation rules while setting reforms to capacity certification for additional hearings.
The first order approves new rules to address price formation during load shedding and emergency assistance events, which SPP started working on after Winter Storm Uri in 2021 (ER25-138).
During the storm, SPP had to shed load and bring in emergency imports, but those also cut resource obligations, causing “a steep decline in the market price of energy.” While the grid was in an emergency, prices did not reflect that.
To ensure the right prices are there to attract supplies during emergencies, SPP proposed changing its tariff to provide that if load is shed or emergency imports are requested due to a system-wide capacity issue, then prices would be set as if those imports and load shedding did not occur.
“SPP explains that the pricing solution will continue to reflect the value of energy and ancillary services that exist in the absence of the balancing authority action of shedding load and initiating emergency imports,” the order said. “SPP asserts that its proposed tariff revisions will not impact market prices if market prices naturally increase or decrease due to a non-directed decrease in demand or additional imports being initiated by market participants without balancing authority action.”
FERC found the proposal to be just and reasonable, saying it will produce market prices that better reflect the grid’s condition and incent additional supplies. The rules will go into effect after SPP works out some issues with the Western Area Power Administration to avoid unintended financial harm to the federal entity.
The second order was about implementing effective load carrying capability accreditation for wind, solar and storage and a performance based accreditation for traditional resources that was followed by a fuel assurance proposal for traditional resources (ER24-1317 and ER24-2953). The order accepted and suspended both sets of revisions and consolidated them for paper hearings. Parties will have the opportunity to make another round of comments.
The two cases at FERC deal with the same question — whether the RTO’s proposed resource accreditation methods satisfy the Federal Power Act — and raise common issues of law and fact. Once the later fuel assurance policy was filed, several parties renewed or modified arguments they presented in the accreditation filing.
“Noting the extensive comments previously filed in the two proceedings, parties need not repeat arguments raised in earlier pleadings,” FERC said. “This is an opportunity for parties to provide additional comment on the effect of evaluating the accreditation filing and fuel assurance filing together.”
Public interest organizations filed a complaint on SPP’s accreditation policies in EL24-96, which they asked to be consolidated with the two Section 205 dockets. FERC declined to include the complaint in the joint proceeding, saying it deals with whether the RTO’s current policies are just and reasonable, not the reforms proposed in the two consolidated dockets.
