Southwest Power Pool eyeing western state expansion

Southwest Power Pool, the regional transmission operator located in Little Rock said Thursday (Nov. 12) it is considering a western state expansion.

SPP said it has received letters from several western utilities committing to evaluate membership in the organization.

A SPP Brattle study found the move would be mutually beneficial and produce $49 million a year in savings. Additionally, SPP anticipates its wholesale electricity market, resource adequacy program and other regionalized services can help western members achieve renewable-energy goals, reinforce system reliability and leverage new opportunities to buy, sell and trade power, it said.

“We’ve enhanced electric reliability while integrating more renewable generation than many in our industry ever thought possible, modernized the grid, built and operated a dependable and economic market, and equitably allocated the costs and revenues associated with these and other services,” said Barbara Sugg, SPP president and CEO. “What’s more, we’ve done it all while staying true to our collaborative and member-driven business model, and now we’re excited for the opportunity to bring the value of RTO membership to new customers in the west.”

If membership is pursued, 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 (RTO) to place facilities in the Western Interconnection under the terms and conditions of SPP’s Open Access Transmission Tariff.

WAPA’s evaluation of RTO membership will consider the participation of its Upper Great Plains-West (UGP-West) region and Loveland Area Projects. This would extend the reach 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.

Basin Electric, MEAN, Tri-State and WAPA’s UGP-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. SPP also provides other limited services to several of the potential members.

“Tri-State’s participation in a Western Interconnect RTO is essential to advance our members’ reliability, affordability and clean energy goals,” said Duane Highley, CEO of Tri-State Generation and Transmission Association and former CEO of the Electric Cooperatives of Arkansas. “With our western utility peers, we will take the time necessary to evaluate the expansion of SPP’s RTO into the west. While the issues are complex, we remain optimistic that together we are on a path that can capture the full benefits of an organized market in the west.”

A recent SPP Brattle study found 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.

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, SPP said.

“We’ve seen a pattern of incremental growth and ever-increasing value among our customer base in the east,” Sugg said. “We launched a small, real-time market in 2007 that immediately exceeded expectations regarding the savings it would provide. That led us to develop a day-ahead market, the value of which earned us the trust and business of new customers that helped us grow our service territory. We’re now seeing that pattern repeat itself in the west in fast-forward. Many of our Western reliability coordination customers will soon become the first participants in the WEIS market, and the trust we’ve earned in that process has now led many of those customers to consider RTO membership. We’re grateful for their partnership and look forward to providing continually more savings, value and reliability to the west.”

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.