In July 2021, Southwest Power Pool’s board of directors and Strategic Planning Committee approved the submitted policy-level terms and conditions for regional transmission organization (RTO) expansion in the Western Interconnection during its quarterly joint stakeholder meeting July 27. (Read more in the July 27, 2021, press release about the board's approval of RTO west terms and conditions.)
In November 2020, SPP announced that several utilities would evaluate the benefits of placing western facilities under the terms and conditions of SPP's Open Access Transmission Tariff. An SPP Brattle study found that 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. (Read more in the Nov. 12, 2020, press release about the potential benefits of the expansion of the SPP RTO to the west.)
If they pursue membership, the following organizations would become the first members of SPP’s RTO to place facilities in the Western Interconnection under the terms and conditions of SPP’s tariff:
- Basin Electric Power Cooperative
- Colorado Springs Utilities (CSU)
- Deseret Power Electric Cooperative
- Municipal Energy Agency of Nebraska (MEAN)
- Platte River Power Authority (PRPA)
- Tri-State Generation and Transmission Association
- Western Area Power Administration (WAPA)*
* WAPA’s evaluation of RTO membership will consider the participation of its Upper Great Plains-West (UGP-West) region, Colorado River Storage Project and Rocky Mountain region.
This would extend the reach and value 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.
The SPP Brattle study found that the organization’s membership in the SPP RTO would produce approximately $49 million in savings annually for SPP’s current and new members. 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. SPP’s prior calculations of the value of RTO membership suggest that these benefits are only a portion of those current and new members will derive. 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 and more.
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. Along with Deseret, each is also a customer of at least one of SPP’s contract-based Western Energy Services, which includes reliability coordination and a real-time market scheduled to launch in February 2021. The companies’ letters indicate they will now work with SPP to evaluate the terms, costs and benefits of putting western facilities under the RTO’s tariff.
SPP's New Member Integration Process
SPP's Strategic Planning Committee will oversee a five-stage New Member Integration Process designed to provide transparency during SPP’s negotiations with prospective new members.
- The Initial Discussion phase occurred when the interested western utilities asked SPP to provide information about SPP and its interest in providing RTO membership services in the Western Interconnection.
- The Due Diligence and Membership Agreement Discussions phase was initiated in Nov. 2020 when prospective members publicly announced their intent to evaluate membership. This initiates negotiations regarding any potential changes to SPP's governing documents required to accommodate new members' integration into the RTO. At this point in the process, SPP establishes a Members Forum and State Commission Forum which give guidance and assist SPP in performing its due diligence. Participation in these forums may require execution of a confidentiality agreement.
- The Tariff and Governing Document Changes Phase occurs when prospective transmission owning members decide to announce results of discussions with SPP publicly. This is considered the second triggering event in the communication process. SPP staff will convene special all-member and stakeholder meetings to present proposed membership terms and analyses conducted.
- As appropriate, SPP will then seek the necessary FERC and state approvals.
- Finally, the Integration phase occurs when the new members officially join the SPP RTO.