July 30, 2019

Southwest Power Pool board approves policy recommendations to enhance reliability, planning and market functions

LITTLE ROCK, ARK. — At Southwest Power Pool’s (SPP) Board of Directors and Members Committee meeting on July 29, the organization’s Holistic Integrated Tariff Team (HITT) presented 21 recommendations meant to:

  • Ensure reliability for a changing generation mix and new technologies.
  • Align transmission planning and cost allocation with SPP’s market and consolidated balancing authority.
  • Enhance the Integrated Marketplace to reliably deliver low-cost energy to customers.

Paul Suskie, SPP’s executive vice president of regulatory policy and general counsel, served as staff secretary to the HITT. “It’s a great example of SPP’s governance process that such a diverse group of stakeholders found consensus on so many important paths forward for our region,” Suskie said. “Deliberately spending the time to review the issues facing SPP and our industry and the ways they influence one another has been invaluable as we look toward the future.”  

The HITT, comprising 15 stakeholders representing the board, members and regulators, met 17 times in 2018 and 2019 to review SPP’s cost allocation model, transmission planning processes, Integrated Marketplace and real-time operations. Their holistic review considered the highly interdependent nature of SPP’s processes and how changes to one area would impact others.

Through months of vigorous discussion, the team reached consensus on 21 recommendations to improve many aspects of SPP’s critical functions. Five recommendations will enhance reliability; nine will improve transmission planning and allocation of transmission costs; four will improve SPP’s wholesale energy market; and three recommendations are strategic, including the development of an energy storage white paper. The full HITT report is available at https://www.spp.org/newsroom/holistic-integrated-tariff-team.

“Our industry is changing more rapidly than we’ve ever seen, and through these policy recommendations SPP is preparing for the electric grid of the future while ensuring all members receive fair and equitable benefits from SPP,” said Tom Kent, chair of the HITT.

SPP’s working groups — including the Market Working Group, Regional State Committee and Cost Allocation Working Group — will now begin implementing the recommendations. More information on each recommendation, along with a timeline and action plan, are included in the report.

The board also approved revising SPP’s exit fee formula to require that all members be subject to a $100,000 exit fee, with load-serving members subject to an additional amount based on their net energy for load percentage share of SPP’s financial obligations and future interest. In April, FERC found SPP’s membership exit fee, as applied to non-transmission owners, is unjust and unreasonable because it creates a barrier to SPP membership for non-transmission owners. The commission directed SPP to revise its governing documents to eliminate the membership exit fee for non-transmission owners.

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