Southwest Power Pool, Mountain West Transmission Group move closer to RTO membership for western entities
LITTLE ROCK, Ark. (March 13, 2018) — On March 13, Southwest Power Pool’s (SPP) board of directors approved the next phase of the continuing effort to integrate the Mountain West Transmission Group into the regional transmission organization’s (RTO) membership. The board’s vote is the culmination of more than a year of negotiations regarding the terms and conditions of Mountain West’s proposed membership in the SPP RTO and participation in SPP’s wholesale electricity markets. It represents a vote of confidence in the value of Mountain West’s membership and the benefits it will bring to SPP’s existing members, the Mountain West entities and the customers served by both.
The board approved a set of policies defining the terms and conditions of Mountain West’s potential membership in SPP. They also directed the organization’s staff and stakeholders to draft amendments to SPP’s tariff, bylaws and membership agreement in support of those policies. This marks a transition in joint efforts by SPP and Mountain West from negotiation toward implementation via SPP’s public and transparent stakeholder process. A public webinar will be conducted on March 22 to provide detailed explanation regarding the policies. Registration for that meeting will be announced on SPP.org soon.
Mountain West – an affiliation of eight entities in the Western Interconnection – announced in September 2017 its intent to pursue SPP membership after both parties completed a months-long period of cost-benefit analysis. Studies performed for Mountain West to date indicate annual savings of $80 million to nearly $154 million through participation in SPP’s markets and optimization of direct-current ties linking SPP’s and Mountain West’s footprints. Mountain West also expects to realize additional benefits resulting from the RTO’s regional approach to transmission planning and efficiencies from SPP’s provision of balancing authority, transmission service, reliability coordination and training services.
SPP estimates its current members could receive more than $500 million in total net benefits over the first 10 years of Mountain West’s membership. SPP’s analysis considered benefits resulting from a reduction in administrative costs due to a larger customer rate base, adjusted production cost savings from the optimization of energy exchange between the east and west, a reduction of required contingency reserves by leveraging delivery between the east and west across DC ties and capacity cost savings due to load diversity achieved by operating across two time zones.
Mountain West and SPP based their agreed-upon terms and conditions on input from a wide range of stakeholders including state commissions, company executives and customers. The policies governing Mountain West’s membership include, among others, provisions for:
- East and west balancing authority areas
- East and west planning regions that will follow the same transmission planning processes
- Cost allocation of transmission expansion specific to each planning region
- Joint dispatch of electricity via SPP’s wholesale market under a single set of rules
- An expansion of SPP’s Regional State Committee to include state commissioners from the Mountain West region
SPP anticipates that integration of the Mountain West entities as RTO members will take approximately two years, though it plans to implement reliability coordination services sooner, in late 2019.
Now in its 76th year of operation, SPP serves a 546,000-square mile, 14-state region, ensuring electric reliability for more 17.5 million people under a FERC-approved tariff. SPP was certified as a reliability coordinator by the North American Electric Reliability Corporation in 1997, and its wholesale electricity markets have saved SPP members and their customers nearly $500 million annually since they launched in 2014. SPP’s governance includes an independent board of directors and a Regional State Committee consisting of state utility regulators and commissioners from the states it serves. Mountain West’s membership stands to increase SPP’s footprint by 165,000 square miles, add 16,000 miles of transmission lines to its network and add 21 gigawatts of generating capacity to its portfolio.
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.
About the Mountain West Transmission Group
Mountain West is a coalition of eight electricity service providers representing approximately 6.4 million customers and 16,000 miles of transmission line primarily in the U.S. Rocky Mountain Region. In September 2017, Mountain West announced its intent to pursue SPP membership. Extensive analyses indicates that RTO membership may provide cost savings for its customers due to optimized use of existing generation and transmission assets through an expanded electricity market, improved grid access and improved planning for generation and transmission across multiple states and systems.
Participants in the Mountain West Transmission Group include:
- Basin Electric Power Cooperative (BEPC), based in Bismarck, North Dakota;
- Black Hills Energy’s three electric utilities in Colorado, South Dakota and Wyoming, subsidiaries of the Rapid City-based Black Hills Corp;
- Colorado Springs Utilities (CSU);
- Platte River Power Authority (PRPA), based in Fort Collins, Colorado;
- Public Service Co. of Colorado (PSCo), an operating company of Xcel Energy based in Denver;
- Tri-State Generation and Transmission Association (Tri-State), based in Westminster, Colorado;
- Western Area Power Administration’s (WAPA) Loveland Area Projects (LAP) and Colorado River Storage Project (CRSP).