Monday, February 18, 2019

FERC Accepts SPP Proposal on Maintenance Costs in Offers

By Michael Brooks

WASHINGTON — FERC on Thursday approved SPP’s proposal to allow generators to include major maintenance costs associated with the number of starts or run hours in their mitigated start-up and no-load offers in the RTO’s energy market (ER18-1632).

Under the changes, effective Jan. 15, 2019, generation owners will be required to submit each of their resources’ maintenance costs to SPP’s Market Monitoring Unit. If they’re validated, the MMU will then assign the costs by maintenance activity to either the resource’s start-up offer or the no-load offer.

Maintenance workers inspect a turbine. | Turbine Generator Maintenance

SPP said the proposal would not only result in more accurate compensation for generators’ costs, but also better help the RTO determine whether to dispatch resources and incent generators to run when dispatched.

The proposal was approved by the SPP Markets and Operations Policy Committee in January and filed with FERC in May. (See “Market Working Group Resolves Mitigation Improvement Issues,” SPP Markets and Operations Policy Committee Briefs: Jan. 16-17, 2018.)

Stakeholders had debated over what qualifies as major maintenance, and SPP decided to allow only activities agreed to in advance by the MMU and the resource owner to be eligible for cost recovery. Generation owners have 30 days to submit these to the MMU, which estimates that more than half of the 700 resources in SPP will apply to include major maintenance costs in their offers.

“We find SPP’s proposal to include a major maintenance cost component in mitigated start-up offers and mitigated no-load offer to be a just and reasonable means of addressing concerns over the recovery of costs resulting from the gradual deterioration of resources’ operating equipment in the SPP Integrated Marketplace,” the commission said.

The changes received support from the MMU, which had opposed earlier versions of the proposal, as well as City Utilities of Springfield and Golden Spread Electric Cooperative. No one submitted protests.

Chairman Kevin McIntyre did not attend Thursday’s open meeting and did not vote on the order.