April 4, 2019

SPP invites utilities to help build an electricity market to serve the west

LITTLE ROCK, ARK.—Southwest Power Pool (SPP) wants to bring its time-tested business model, proven benefits and enhanced reliability to the west through an energy imbalance market that would facilitate more efficient deployment of generation and use of the region’s transmission system. It’s calling on interested utilities and other customers to join in the design and implementation of a market that will meet the electricity needs of the Western Interconnection.

SPP has provided electric reliability one way or another since 1941. It has been a certified reliability coordinator (RC) for more than two decades, operated an energy imbalance market from 2007 to 2014 and launched a day-ahead electricity market in 2014 that has since provided participants more than $2.7 billion in savings. Along the way, it has successfully provided various services to dozens of non-member organizations on a contract basis.

“SPP has experience not only building and administering electricity markets, but specifically doing it to meet the needs of a diverse group of customers,” said Carl Monroe, SPP’s chief operating officer. “There seems to be growing interest in organized markets in the west, and SPP believes we’re uniquely equipped to provide service and benefits no one else can.”

Monroe oversaw implementation of SPP’s energy imbalance services (EIS) market in 2007. The market’s first-year benefits were $103 million: nearly triple its total implementation costs of $33 million.

SPP has a long and successful history of providing contract services, and its business model and experience make it an attractive choice for utilities looking to the make the process of ensuring electric reliability easier and more efficient.

“SPP understands western utilities’ system needs and approach to business,” said Nick Brown, SPP president and CEO. “Utilities have the daunting task of ensuring electric reliability and affordability for their customers. It’s been our experience that energy imbalance markets are a wonderful way to accomplish that.”

SPP is already on its way to providing other services in the west. It announced in September 2018 it would serve as RC for numerous western utilities beginning in December 2019. Since then, it’s been in close collaboration with new customers, future neighboring RCs and regulatory stakeholders to finalize plans for the governance and operation of its western reliability coordination services.

“Our experience launching this new iteration of our RC service has paved the way for a very logical next step” said Brown. “Our provision of RC services in the west would minimize the work needed to implement a market. Western Interconnection-specific reliability information already available to SPP will help lay the foundation for a seamless transition. SPP is committed to working with utilities to build a western market that will provide them and their customers the savings and reliability we’ve been providing in the eastern market for years.”

About SPP: Southwest Power Pool, Inc. manages the electric grid and wholesale energy market for the central United States. As a regional transmission organization, the nonprofit corporation is mandated by the Federal Energy Regulatory Commission to ensure reliable supplies of power, adequate transmission infrastructure and competitive wholesale electricity prices. Southwest Power Pool and its diverse group of member companies coordinate the flow of electricity across 66,000 miles of high-voltage transmission lines spanning 14 states. The company’s headquarters are in Little Rock, Arkansas. Learn more at www.spp.org.

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