April 28, 2020

SPP board discusses COVID-19 impacts, approves uniform local planning criteria

LITTLE ROCK, Ark. — On April 27-28, Southwest Power Pool held online meetings of its Regional State Committee of regulatory commissioners and Board of Directors and Members Committee. Barbara Sugg, who became SPP’s president and CEO on April 1, discussed COVID-19 impacts.

“I’ve been very impressed with our employees’ resilience and dedication while we work remotely,” Sugg said. “I’m pleased to report no one on our team has tested positive. We’re optimistic we won’t have to sequester our real-time operators but are prepared for that possibility.”

Sugg reported staff will return to the office in a phased approach and only once certain milestones are met, including a 14-day downward trajectory of positive cases in Arkansas. She noted that SPP has proven its ability to provide excellent service even while most of its employees work remotely and would exercise an abundance of caution in transitioning back to normal operations.

Chief Operating Officer Lanny Nickell reported SPP is seeing an average 4-6% decline in electricity consumption within the SPP region resulting from COVID-19’s impacts on how consumers are using energy. Due to concerns about the availability of work crews, some companies are deferring generator maintenance activities that would normally occur this spring.

“We’re performing analyses to understand the implications of canceled and deferred outages, and we’ll share that information with our members, so they can take precautionary actions and develop more informed plans,” Nickell said. “We expect to have excess generation capacity in winter 2021, which gives some headroom to take more outages then.”

Companies have also been conservative about taking transmission lines out for maintenance, and SPP has heard about one new transmission upgrade project being delayed due to COVID-19 concerns. Nickell thanked SPP members for their close daily coordination with SPP’s operators to ensure regional electric reliability.

The board approved two recommendations from the Holistic Integrated Tariff Team’s 2019 report. SPP will create a process to establish uniform Schedule 9 planning criteria, which will ensure all customers in a pricing zone equally pay for the same types of transmission upgrades. The board also approved a modification to SPP’s Open Access Transmission Tariff that eliminates Attachment Z2 revenue credits prospectively for certain network upgrades. This is the second time the Z2 issue has gone through the stakeholder process. The modification addresses issues the Federal Energy Regulatory Commission (FERC) noted with the first Z2 filing.

“Our staff and stakeholders are making steady progress toward implementing all 21 HITT recommendations,” said Paul Suskie, SPP’s executive vice president of regulatory policy and general counsel. Suskie noted a new Electric Storage Resources Steering Committee will work on issues identified in the recent storage white paper, which was another HITT recommendation.

Bruce Rew, senior vice president of operations, announced SPP set new wind and renewable penetration records on April 27 at 1:24 a.m. At that time, wind energy made up 73.2% of all energy used in the region, and renewables in total served 78.2% of demand. Rew said the new reliability coordination service SPP is providing to entities in the west is going well. There are now eight participants in the Western Energy Imbalance Service market, and SPP is still on track to launch the market in February 2021.

Keith Collins, executive director of the independent SPP Market Monitoring Unit, shared highlights from its draft 2019 State of the Market report that will be filed with FERC. He said all frequently constrained areas of the regional electric grid have been removed, in part due to transmission additions that have shifted transmission congestion. Reducing grid congestion helps levelize SPP’s market prices across the region. The report outlined recommendations for SPP’s market, including improving price formation during emergency and scarcity conditions, improving outage coordination, increasing flexibility and enhancing the ability to assess a range of transmission planning outcomes.

The board approved BKD CPA & Advisors’ audit of SPP’s 2019 financial statements and accounting controls. BKD did not find any issues or concerns in its review of SPP’s accounting practices.

Board Chair Larry Altenbaumer read a resolution in memory of SPP director Bruce Scherr, who recently passed away. Bruce served as an SPP director for four years and will be greatly missed.

The SPP 2019 Annual Report is available for download; it highlights 2019’s challenges and successes. The board webpage contains materials from this meeting and registration for future meetings.

About SPP:  Southwest Power Pool, Inc. is a regional transmission organization: a nonprofit 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.


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