July 27, 2021

SPP board directs action on winter storm recommendations

LITTLE ROCK, Ark. — On July 26-27, the Southwest Power Pool (SPP) board of directors directed SPP to address root causes of the February 2021 electric grid emergency, approved a new strategic plan and endorsed an improved process for adding new generation to the grid, among other business.

Comprehensive review of SPP’s response to February 2021 winter storm

In February, SPP experienced the greatest operational challenge in its 80-year history. Due to record-low temperatures, record-high electricity use and widespread generation unavailability, the electric grid was severely tested. SPP kept the lights on across its region with two short exceptions (approximately four hours).

In March, the board directed a comprehensive review of the event to identify how SPP can better prepare for future extreme reliability threats. Five teams and several hundred stakeholders conducted in-depth analysis and published “A Comprehensive Review of SPP’s Response to the February 2021 Winter Storm.” The report recommends 22 actions, policy changes and assessments related to fuel assurance, resource planning and availability, emergency response, market design, operator tools and other critical areas.

The board accepted the report, directed work to immediately begin on recommendations that address root causes, and requested additional analysis to explain the failure of natural gas supply. Staff were instructed to prioritize work on the remaining recommendations, provide a project plan and quarterly progress updates, and issue letters to generator operators in the SPP region requiring them to inform SPP about their plans to assure generation availability for the upcoming winter.

“This report isn’t the end of an effort. It’s the beginning of our hard work to improve our ability to mitigate future grid emergencies,” said Larry Altenbaumer, SPP board chair.

“During this winter storm, our members, market participants, staff, regulators and neighbors worked closely together to make the best out of an extremely difficult and challenging situation, the likes of which we’ve never encountered. We are a learning organization, and we will learn from this event,” said Lanny Nickell, SPP chief operating officer.

New strategic plan sets five-year vision

The board approved a new five-year strategic plan defining how SPP will actively engage with its stakeholders to deliver the best energy value and achieve excellence in all it does.

“We developed this plan during changing and uncertain times,” said Barbara Sugg, SPP president and chief executive officer. “We navigated through these challenges, including the pandemic and historic winter storm, and emerged stronger. Collaborating with our members, we’re finding creative and innovative ways to strive toward a world where people have more accessible, reliable, sustainable, flexible and affordable power.”

Improved process for managing generation interconnection requests

SPP’s generation interconnection (GI) queue represents new generators “waiting in line” to be analyzed and connected to the grid. The queue primarily consists of requests to add wind generators, with a growing number of requests to add solar and stored energy. Due to the huge increase in GI requests in recent years, some customers have had to wait a significant amount of time for their request to be studied. The board approved three strategies to clear the GI queue’s backlog so SPP can more quickly process outstanding GI requests and facilitate adding new generators to the grid.

Other board business

The board approved a policy-level agreement for the SPP regional transmission organization’s expansion in the Western Interconnection. It approved a market-based approach for managing uncertainty, a paper on cost allocation for energy storage used as a transmission asset, the 2022 operating plan, and a new methodology for accrediting wind and solar resources. The board increased the Schedule 1-A tariff rate cap to 46.5 cents per megawatt-hour. Staff noted that SPP identified $3.5 million in budget reductions as part of a cost-savings effort.

Board meeting materials are posted on SPP.org.

About SPP:  Southwest Power Pool, Inc. is a regional transmission organization: a not-for-profit 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.

Meghan Sever, 501-482-2393, msever@spp.org