OKLAHOMA CITY — SPP’s Strategic Planning Committee last week agreed to allow its Clean Power Plan Task Force to go dormant after endorsing its comments to EPA.
The committee agreed with Chair Mike Wise’s recommendation during its Jan. 14 meeting that the task force, which developed one white paper comparing the mass- and rate-based compliance approaches and a second capturing SPP and stakeholders’ comments on the proposed federal implementation plan, be allowed to suspend its work.
“These two white papers reflect what you wanted the task force to do,” Wise, who also chaired the task force, told the committee. “I think this task force should stay dormant until the SPC decides we work on Clean Power Plan initiatives that come out of the EPA’s final implementation of the federal plan, or until it’s needed for future work.”
The task force was formed to review the CPP, recommend SPP’s role in assisting states’ compliance and inform staff and member dialogue with environmental regulators. In addition to developing the two white papers, it drafted a set of talking points for members’ use with their state regulatory and environmental agencies.
The SPC endorsed both white papers and their filing with EPA, but not before accepting a “friendly” amendment at SPP Director Phyllis Bernard’s request to strike the use of “reserve” when referring to a reliability allowance to avoid confusion with reserve margins. The group also amended the language to make it clear SPP won’t make resource decisions for its members.
“These white papers teed up all the issues and concerns associated with them, and all the things we would advocate as an organization,” said Michael Desselle, vice president and chief compliance and administrative officer.
Oklahoma Gas & Electric abstained from both endorsements and the friendly amendment, saying it was not prepared to vote. Kansas City Power & Light and Dogwood Energy also abstained from endorsing the comments to EPA.
“I think it’s fine SPP wants to review this,” OG&E’s Jake Langthorn said, “but it should be clear this review doesn’t affect in any way how OG&E believes it should respond and how the state [of Oklahoma] should respond.”
The task force compared the mass- and rate-based compliance approaches by analyzing how allowances and credits are supplied; monitoring, verification and tracking; allocation issues; leakage under mass-based plans; and reliability implications.
Its comments to EPA on the federal plan call for a reliability safety valve in both the federal and state plans; an incremental reliability allowance for FIPs; considering regional precedent in FIPs; allowing resource owners to retain allowances for retired resources under the mass-based plan; and a consolidated review process for both plans.
“We identified reliability concerns with a lack of conformity, or consistency, across the region,” said SPP Vice President of Engineering Lanny Nickell. “We think it’s preferable that as many states as possible come up with a common approach.”
Asked whether there was a need to have the task force look at specific impacts to SPP’s market, Nickell said not until there is a request to do a reliability assessment. “We won’t do that until we see all the state plans as they are developed,” he said.
“Strategically, I think it’s important for every state in the region to be the same, because that’s the least cost for the region,” Wise said.
More Detail Requested on Technology Committee
The SPC resisted SPP’s suggestion to form an advanced technology steering committee that would provide input into staff research and development, share best practices for technology deployments and perform studies. The committee told staff to return with additional detail on its proposal.
“The scope needs to be fully developed, better than it is now,” said Lincoln Electric’s Dennis Florom.
SPP staff pitched its technology steering committee as providing a forum to help SPP make policy decisions when deciding how to incorporate technologies such as smart grid, demand response, energy storage, distributed energy resources and grid-optimization techniques (dynamic line ratings and topology control).
Jay Caspary, SPP’s director of research, development and special studies, said the committee would be helpful in determining broader applications of these new technologies and provide a way to gain input from members on how to prioritize organization research and budgets.
Stakeholders were divided over the need for SPP to get involved in R&D — “Specific technological issues are already assigned to specific technical groups,” Florom pointed out — and whether the task force should report to the SPC or the Markets and Operations Policy Committee.
“Whether it reports to MOPC or the SPC, I don’t care,” Caspary said. “I need a forum where I can get input and direction … to drive technological transfer and deployment within the SPP footprint for the benefit of SPP members.”
Caspary said SPP funds research within the industry but does not do any of its own in-house.
Several members expressed a desire to manage their own R&D budgets. Xcel Energy’s Bill Grant said, “I don’t want to see SPP running around spending money on efforts where the companies are not interested in them.”
The Wind Coalition’s Steve Gaw, while not a member of the committee, said, “This is a broader issue than that. This has to do with new, changing dynamics that everybody is dealing with and how the grid has to be more flexible and deal with new technologies.”
“Technology is moving at such a rapid pace, this group should be talking about what do with big data and what do with big technology,” KCP&L’s Denise Buffington said. “I would encourage this group to be educated about it and work it into the strategic plan.”
“I sense from the discussion, the committee would like you to go back and look at this some more … take this information back and mull it over,” Wise told Caspary.
Several members volunteered to work with Caspary on improving the proposed committee’s scope and responsibilities.
Postage Stamp Rate a ‘Valid Conversation’
The SPC took a hard look at the potential unintended consequences of the Transmission Planning Improvement Task Force’s work, given previous MOPC discussions about the Z2 Payment Plan Task Force. (See related story, Latest Z2 Credit Project Delay Renews Old Frustrations).
“We’re locking down some of the fundamental things the group wants to do,” said Antoine Lucas, SPP’s director of transmission planning and the TPITF’s staff secretary. “We’re looking at resources, the actual scope of work that’s been requested and the schedule … where we can shave those [work effort] peaks.”
Lucas and the task force’s chair, NextEra Energy Transmission’s Brian Gedrich, have been guiding the work on the planning process’s methodologies and modeling and the appropriateness of the planning cycle and assessments. They plan to host an educational forum and present their final recommendations to the SPC, MOPC and Board of Directors in April.
Langthorn suggested “the next step in the conversation should be … how to leverage the market in order to meet obligations to serve that load.”
“We already have a system that makes it difficult to make improvements. One person pays for [the improvement], and everyone benefits from it,” Langthorn said. “It’s also time to rethink how we pay for transmission … that’s not regionalized. Who pays for that? Maybe it’s time we start looking at a postage stamp rate … to take full advantage of the market.”
SPP Executive Vice President and Chief Operating Officer Carl Monroe responded, saying “That is a valid conversation we need to have.”
Wise said the issue would be part of the discussion during the committee’s May retreat.
— Tom Kleckner
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