WAPA, Municipal Energy Agency of Nebraska and others to evaluate SPP membership

by Paul Ciampoli
APPA News Director
November 13, 2020

Southwest Power Pool (SPP) on Nov. 12 reported that it has received letters from several western power entities committing to evaluate membership in the organization.

If they pursue membership, Basin Electric Power Cooperative, Deseret Power Electric Cooperative, the Municipal Energy Agency of Nebraska (MEAN), Tri-State Generation and Transmission Association, and Western Area Power Administration (WAPA) would become the first members of SPP’s regional transmission organization to place facilities in the Western Interconnection under the terms and conditions of SPP’s open access transmission tariff.

SPP said that WAPA’s evaluation of RTO membership will consider the participation of its Upper Great Plains-West region and Loveland Area Projects. “This would extend the reach and value of SPP’s services — including day-ahead wholesale electricity market administration, transmission planning, reliability coordination, resource adequacy and more — and the synergies they provide when bundled under the RTO structure,” SPP said in a news release.

Basin Electric, MEAN, Tri-State and WAPA’s Upper Great Plains-East Region are already members of SPP, having joined the RTO in 2015 when they placed their respective facilities in the Eastern Interconnection under SPP’s tariff.

Along with Deseret, each is also a customer of at least one of SPP’s contract-based Western Energy Services, which includes reliability coordination and a real-time market scheduled to launch in February 2021.

The companies’ letters indicate they will now work with SPP to evaluate the terms, costs and benefits of putting western facilities under the RTO’s tariff.

A recent SPP Brattle study found that WEIS participants’ membership in the SPP RTO would produce approximately $49 million in savings annually for SPP’s current and new members.

The RTO said that the western utilities joining SPP would receive $25 million a year in adjusted production cost savings and revenue from off-system sales, and SPP’s members in the east would benefit from $24 million in savings resulting from the expansion of SPP’s market, transmission network and generation fleet.

SPP said its prior calculations of the value of RTO membership suggest that these benefits are only a portion of those current and new members will derive. There is additional value not considered by the Brattle study in five-minute real-time economic dispatch, achievement of public policy goals, lowered reserve-margin requirements, consolidation and regionalization of planning and other processes and more, the grid operator said.

SPP launched its first real-time balancing market in 2007 then transitioned to a day-ahead market and became a single, consolidated balancing authority in 2014.

It first began serving customers in the west in December 2019 when it launched its Western Reliability Coordination service on a contract basis.

SPP is awaiting FERC approval to implement a western energy imbalance service market that it plans to launch in February 2021.

FERC in July rejected the SPP proposal for a western energy imbalance service market. At the same time, FERC offered guidance for a modified proposal should SPP choose to submit one. SPP then submitted a modified western energy imbalance service market proposal in October.

CAISO Western EIM

Earlier this year, the California Independent System Operator signed an implementation agreement with Xcel Energy-Colorado, which paves the way for its participation in the CAISO Western EIM in 2022.

The agreement also provides for participation of three other utilities: Black Hills Energy Colorado Electric Colorado Springs Utilities, and Platte River Power Authority.

The four utilities currently share resources and balance demand for electricity during peak periods through a Joint Dispatch Agreement.

These utilities launched a study in 2019 to determine which market, the WEIS proposed by SPP or CAISO’s Western EIM, would provide greater benefits to customers.

The Colorado utilities also report that the Western EIM has lower administrative costs and is exploring adding day-ahead market services, which could help participants to make wider use of renewable energy resources.