Monday, October 23, 2017

SPP Board of Directors Briefs

Board Approves 2017 Admin Fee Increase, Budget

LITTLE ROCK, Ark. — SPP’s Board of Directors last week approved a 13.2% increase in the RTO’s administrative fee and a 6.6% boost in its budget for 2017. The approval came Dec. 6 after a unanimous vote by the Members Committee.

The vote means the fee will rise from 37 cents/MWh to 41.9 cents/MWh in 2017, based on a net revenue requirement (NRR) of $160.5 million, a $9.9 million increase over 2016.

| SPP

The RTO projects annual fee increases for the next five years, reaching 49.9 cents/MWh in 2021.

SPP is projecting an under-recovery of $5.9 million from the 2016 NRR. Other factors contributing to the NRR’s increase are a $3.5 million increase in maintenance expenditures and a $2.7 million increase in personnel costs.

SPP Director Harry Skilton, chair of the Finance Committee, said a decline in load growth led to the administrative fee’s increase. SPP had budgeted 407.2 million MWh in billable energy but revised that down to 393.9 million MWh. It is budgeting 383 million MWh through 2021.

“That reduction in load has set us up for an under-recovery that carries on to the next year,” Skilton said.

SPP budgeted a net loss of $35 million this year but has upped that to a $41.6 million loss given the under-recovery.

The board approved a budget with $194.1 million in income and $196.4 million in expenses for 2017. The 2016 spending plan had $176.2 million in income and $217.8 million in expenses.

The budget sets SPP’s headcount at 610 employees, an increase of one from 2016.

Besides a few questions on SPP’s practice for depreciating expenses, members quickly accepted Skilton’s report and recommendations.

Director Harry Skilton, with CEO Nick Brown and Chairman Jim Eckelberger, delivers the annual budget report | © RTO Insider

Stakeholder Surveys Stay Close to Form

Michael Desselle, SPP vice president and chief compliance and administrative officer, told the board and members that the RTO sent out nearly double the usual amount of stakeholder satisfaction surveys, but that the final results were not significantly different than previous years.

Desselle said the annual survey’s average satisfaction scores dropped for every service except one, by a difference of 0.12 points (out of 5) or less. Training was the lone exception, rising by 0.03.

Stakeholders identified the Z2 revenue crediting process as a repeat theme in their comments. One stakeholder said “the ‘Z2 Monster’ has been an unqualified disaster … I tip my hat to SPP management’s ability to skirt their contribution to the situation,” while another dinged SPP staff for “allowing too many years to transpire before implementing Z2.”

“Last year, [the concern] was the transparency of the Z2 process,” Desselle said. “This year, it was the expediency of the Z2 process.”

As in past years, Desselle said staff will prioritize the comments and address them. He said staff has closed 71 of last year’s 76 comments.

Among the positive comments were many praising the staff’s professionalism, responsiveness and communication efforts. Criticisms included the lack of detailed settlement reports in the Integrated Marketplace portal and what one called the “patronizing attitude” of staff and board members. One critic called for an external market monitor, saying there are “way too many conflicts of interest with an internal” monitor. (See FERC Calls for Changes to Protect SPP Market Monitoring Unit Independence.)

December Board/Members Committee meeting | © RTO Insider

SPP distributed 4,597 survey invitations to organizational group members, market participants and other individuals who had interacted with the RTO during the previous 12 months, either through meetings, training, customer relations or other exchanges. Staff received 716 responses, for a response rate of 16%, up one percentage point from last year (410 responses) and four points from 2014 (181 responses).

Desselle also said auditing firm KPMG issued an unqualified opinion with no exceptions following its Statement on Standards for Attestation Engagements (SSAE) No. 16 audit. He said auditors found “no disagreements with management” and that “no illegal acts came to their attention.”

Stakeholders Again Give Organizational Groups High Marks

SPP’s annual survey of its organizational groups matched that from 2016, with stakeholders rating groups’ overall effectiveness at 4.2, out of a possible 5.

The scores reflected the average response to “Please rate the overall effectiveness of this group.” The individual group scores ran from 3.5 for the Event Analysis Working Group to 4.8 for the Human Resources and Oversight committees and the System Protection and Control Working Group.

SPP CEO Nick Brown said he was pleased with the survey’s 71% response rate, and he assured the board and members that SPP “is not just gathering this data and doing nothing with it.”

Ciesiel Pleased with RE Survey Results

Regional Entity General Manager Ron Ciesiel said he was happy with the RE’s stakeholder satisfaction survey, which produced scores of 3.9 to 4.4 on a 5-point scale for customer service and responsiveness, and 3.2 to 3.6 for how well the program meets expectations.

Regional Entity Trustees Chair Dave Christiano and GM Ron Ciesiel share stakeholder feedback with the board. | © RTO Insider

Ciesiel noted RE staff is seen as responsive, knowledgeable, professional and personable and that members see the RE’s workshops on reliability issues as “valuable.”

“Here’s the good news: We’re not having the events we need to do analysis on. We’re not really getting events,” he said. “I’ll take this every day, because it’s good news across the board, not only here, but in North America.”

Ciesiel said the RE is considering a spring workshop and including sessions on new standards. It will also use the RE’s newsletter to focus on the top 10 violated standards.

Paul Malone, Todd Fridley Approved as MOPC Chairs

The board and members unanimously approved the Nebraska Public Power District’s Paul Malone as the incoming chair of the Markets and Operations Policy Committee. Malone, NPPD’s transmission compliance and planning manager, replaces SouthCentral MCN’s Noman Williams, whose term expired.

Todd Fridley, vice president at Transource Energy, was approved as the committee’s vice chair.

The board and members also approved revisions to the Corporate Governance Committee’s charter to formalize bylaw revisions that added committee seats for federal power marketing agencies and independent transmission companies. Bob Harris (Western Area Power Administration-Upper Great Plains) and Brett Leopold (ITC Great Plains) currently fill those respective seats.

Also approved was a charter change for the Seams Steering Committee. It changes the committee’s scope of review and guidance activities from “existing seams agreements” to “new or existing seams agreements.”

– Tom Kleckner

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