January 26, 2021

SPP becomes first regional grid operator with wind as No. 1 annual fuel source, considers electric storage participation in markets, approves 2021 transmission plan

LITTLE ROCK, ARK. — Southwest Power Pool’s (SPP) leadership and stakeholders met throughout January to collaborate on regional grid operations and markets, transmission planning, membership expansion and corporate affairs.

Markets and Operations
In 2020, SPP became the first regional transmission organization to have wind as the No. 1 fuel source. Wind is outpacing SPP’s use of coal and natural gas.

“Maintaining reliability with this large amount of wind is extraordinary,” said Barbara Sugg, president and chief executive officer. “To manage this high volume of variable energy we rely on accurate forecasting, our robust transmission system, a diverse generation mix and our equitable and efficient wholesale energy market.”

The board approved three market-related studies recommended by the 2019 Holistic Integrated Tariff Team (HITT) report. Staff analyzed dynamic line ratings, automatic mitigation of unduly low offers and offer requirements for variable resources.

SPP continues to focus on electric storage resources (ESR). A new task force is addressing Federal Energy Regulatory Commission (FERC) Order 2222, which requires grid operators to allow distributed energy resources, including ESR aggregations, to participate in wholesale markets. The group is meeting regularly to meet FERC’s July 19 deadline to file tariff changes.

The Markets and Operations Policy Committee (MOPC) approved recommendations regarding how ESRs’ duration should be addressed in transmission planning. The MOPC is updating its ESR Steering Committee’s scope and membership to better coordinate ESR policy decisions.

SPP is on track to launch its Western Energy Imbalance Service (WEIS) market Feb. 1. “The market is on time and under budget,” Sugg said. Eight utilities from the Western Interconnection will participate in the market.

Membership Growth

The majority of WEIS participants have submitted letters of interest regarding membership in the SPP regional transmission organization. Placing western facilities under SPP's Open Access Transmission Tariff would produce approximately $49 million in annual production cost savings for current and new members, among other benefits.

The Strategic Planning Committee initiated its Members Forum, open to SPP’s membership, to discuss integrating new members into SPP. The forum will meet frequently in the coming months to develop proposals related to membership expansion.

Transmission Planning

The board of directors approved the 2021 SPP Transmission Expansion Plan (STEP), a comprehensive list of planned transmission projects in the SPP region for a 20-year planning horizon. According to the STEP, 81 projects estimated to cost $444 million will be constructed over the next six years in 12 states. In 2020, SPP’s members completed 29 transmission system upgrades in eight states at an estimated cost of $175 million.

“Our members’ investment in the transmission network allows us to provide reliable and affordable power to consumers throughout the SPP region,” said Antoine Lucas, SPP vice president of engineering. “The collaboration among companies across the region to produce this plan is remarkable.”

Additionally, SPP and the Midcontinent Independent System Operator have begun a joint planning effort to identify transmission solutions that will benefit both regions.

Corporate Affairs

SPP was significantly under budget in 2020, resulting in over-recovery that reduced transmission customers’ 2021 rates. In 2021 SPP implemented new cost recovery process that more closely aligns administrative costs with those who utilize SPP’s services.

Meeting materials from the January meetings are posted to SPP.org:

About SPP:  Southwest Power Pool, Inc. is a regional transmission organization: a nonprofit corporation mandated by the Federal Energy Regulatory Commission to ensure reliable supplies of power, adequate transmission infrastructure and competitive wholesale electricity prices on behalf of its members. SPP manages the electric grid across 17 central and western U.S. states and provides energy services on a contract basis to customers in both the Eastern and Western Interconnections. The company’s headquarters are in Little Rock, Arkansas. Learn more at SPP.org.

Derek Wingfield, 501-614-3394, dwingfield@spp.org