Monday, June 25, 2018

SPP Markets and Operations Policy Committee Briefs

Stakeholders Endorse 12% Planning Reserve Margin, Policies

DALLAS — SPP’s Markets and Operations Policy Committee last week overwhelmingly approved a Tariff revision request that would replace the old capacity margin terminology with a 12% planning reserve margin requirement, the RTO’s first such change since 1998.

SPP MOPC Markets and Operations Policy Committee

Richard Ross, AEP | © RTO Insider

The Regional Tariff Working Group’s (RTWG) RR 187 also incorporates previously approved policies that identify who is responsible for resource adequacy, the resource adequacy requirement and how and when the requirement can be and should be met.

The Capacity Margin Task Force, which spent two years developing the policies, expects that lowering the planning reserve margin (PRM) from 13.6% will reduce SPP’s capacity needs by about 900 MW and save members $1.35 billion over 40 years. (See SPP to Cut Planning Reserve to 12%, Reduce Capacity Needs by 900 MW.)

The policies will become effective this summer pending final approval from the SPP Regional State Committee and the Board of Directors/Members Committee next week and a filing at FERC, with the exception of the resource adequacy assurance policy, or the enforcement mechanism. That policy requires entities short on their PRMs to make payments to entities with excess capacity, based on forecast information.

The RTWG suggested using 2017 as a trial run.

A deliverability study is currently being prepared for the summer. It gives load-responsible entities another option to use “deliverable” capacity on a short-term basis for meeting their planning requirements, instead of requiring firm transmission service. Firm service is still required for load and available for PRM capacity.

“This is a super set of work by the task force and the RTWG, and we need to move forward with it,” American Electric Power’s Richard Ross said. “If somebody needs to fix something, they can prepare a revision request and send it through the [stakeholder] process.”

Tenaska cast the lone dissenting vote against the measure, while nine other members abstained. Eight members abstained when the revision was voted out of the RTWG.

The policies were established by the Capacity Margin Task Force, which then turned the work of drafting a revision request over to the RTWG. The working group estimated that it spent 93 meeting hours on its work, with 20 to 25 attendees at every meeting.

Regional Cost Allocation Remedies Rejected

Ross said he would use the same stakeholder process to appeal the MOPC’s rejection of a business practice that documents the potential Regional Cost Allocation Review (RCAR) remedies and clarifies the process to be used when implementing a remedy.

January MOPC meeting | © RTO Insider

The measure failed when it received only 58.5% favorable votes, against 17 opposing votes and 12 abstentions.

Ross said he would take his appeal to the board next week.

“I’m comfortable where it is, personally, for my company,” Ross told the SPP Strategic Planning Committee on Thursday. “But we shouldn’t kill it at that stage without other [Regional State Committee] members and the directors having a chance to weigh in on it.”

Originally written as a Tariff revision and rejected by FERC over a lack of detail, RR 155 outlines the processes for analyzing, approving and implementing potential remedies for transmission-pricing zones that fall below the RCAR process’s approved threshold.

Several working groups passed the revision request, but with opposition. Some stakeholders felt the practice was “deficient” in how remedies would be implemented, Ross said. The remedies include accelerating planned upgrades, zonal transfers to offset costs or a lack of benefits to a zone, and changing cost-allocation percentages.

“The major concern was if it’s put in the Tariff, it would simply be implemented without an ability to object,” Ross said. “Putting it in a business practice should not take away the rights to object at FERC.”

“Turning it into a business practice remains our major opposition to this,” said Southwestern Public Service’s Bill Grant. “We protested this at FERC. We don’t think it’s needed. We would prefer going through the regular planning process and if there’s a solution there, to go forward with it.”

Speaking for the city of Springfield, Mo., which has been hampered by a low benefit-to-cost ratio in its zone, Jeff Knottek said he would support the measure.

“This language has been around for a number of years,” said Knottek, the city’s director of transmission planning and compliance. “We’re putting our trust in the process and hopefully we’ll get some relief with the transmission-expansion process.”

Variable Demand Curve Approved

The MOPC endorsed the SPP Market Working Group’s (MWG) revision request to use a variable demand curve that moves SPP toward “a more robust valuation of regulation and operating reserve” and more accurately addresses and values operating and energy shortages during scarcity events.

SPP MOPC Markets and Operations Policy Committee

SPP’s Carl Monroe, NPPD’s Paul Malone lead the MOPC meeting. | © RTO Insider

Ross, the MWG’s chair, said RR 198 would mitigate stakeholder concerns related to FERC Order 825, which established settlement interval and shortage-pricing requirements for organized markets.

Golden Spread Electric Cooperative’s Mike Wise cast the lone opposing vote, once again expressing his concerns over SPP’s use of reliability unit commitment to avoid scarcity pricing situations. Shell Energy abstained. (See “RUC, Shortage Pricing Practices Challenged,” SPP Board of Directors/Members Committee Briefs.)

“It’s a step in the right direction, but it’s not far enough,” Wise said. “SPP operations is mitigating all of this anyway. The inappropriate use of RUCing is destroying shortage pricing and pricing around intervals, which isn’t allowing the correct market signals.”

Responding to Wise, Ross said the MWG had listened to Golden Spread’s concerns and those of others, and changed both the size and number of steps in the process. “It’s best we move forward at this point,” he said.

MOPC’s Consent Agenda Endorses 10 Revision Requests

SPP Stakeholders pulled a compliance-driven revision request from the consent agenda before unanimously passing the measure.

RR 195 simplifies the process of SPP’s “data specification” document required by NERC Reliability Standards IRO-010-2 and TOP-003-3 and makes basic formatting changes to the RTO’s operating criteria document.

SPP’s Casey Cathey requested the revision be approved in order to begin making the formatting changes. He said staff’s intention is to come back to the MOPC in April for final approval of the document.

The nine other revision requests on the MOPC’s consent agenda, which passed unanimously, included:

  • BPWG-RR122: Clarifies how the Tariff’s re-dispatch costs are determined and settled through the Integrated Marketplace, deletes obsolete language and clarifies long-term congestion rights for service subject to re-dispatch, and updates the business practices to reflect current practices.
  • ORWG-RR134: Clarifies previously ambiguous operating criteria language for the initial submission and subsequent updates of unit de-rate information in SPP’s control room software system.
  • BPWG-RR143: Retires a business practice that managed congestion through the re-dispatch of firm service, which became obsolete with the Integrated Marketplace.
  • MWG-RR190: Corrects SPP’s definition of residual transmission system capability by adding a missing variable in the protocols and clarifies that previous awards are considered in annual and monthly FTR allocations and auctions.
  • MWG-RR191: Clarifies that there should not be a requirement to reprice the day-ahead and/or real-time markets for every data input/software error.
  • MWG-RR192: Removes the Violation Relaxation Limits (VRL) report’s quarterly reporting requirement, which is covered in greater detail through other means, such as monthly reports to the Market Working Group, the Market Monitoring Unit’s annual State of the Market report and the Operations Annual VRL report.
  • BPWG-RR194: Aligns network integration transmission service practices with the new OASIS functionality as of March 1, as required by FERC.
  • RTWG-RR197: Completes the MMU’s annual review of frequently constrained areas by updating the list of constraints and resources.
  • MWG-RR199: Quarterly settlement clean-up clarifying how some of the calculations work and allowing market participants to better shadow the calculations.

The consent agenda also included several annual charter changes for some stakeholder groups. The committee pulled a request to make the Competitive Transmission Process Task Force — charged with improving SPP’s FERC Order 1000 processes — a standing task force. MOPC Chair Paul Malone, with the Nebraska Power Public District, said he believed task forces should have a time limit and be folded into a working group should there still be a need for their work.

After a brief discussion, Grant, the group’s chair, agreed to a two-year extension for the task force.

“Hopefully, once we’ve gone through one or two [Order 1000] processes, we’ll have a good process,” he said. “We’ve only had one [Order 1000] process, and until we have a couple more, don’t be surprised if we don’t ask to be extended for another couple of years.”

– Tom Kleckner

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