Tuesday, May 23, 2017

SPP RSC Leaves Safe-Harbor Thresholds Unchanged

By Tom Kleckner

DALLAS — SPP’s Regional State Committee last week accepted a working group’s proposal to leave unchanged the criteria used to exempt load-serving entities from transmission project costs in service requests.

The Cost Allocation Working Group recommended that no modifications be made to the thresholds used to determine what project costs should be borne by LSEs making long-term transmission service requests (TSRs). The RSC, composed of 10 regulators from across SPP’s 14-state footprint, accepted the proposal but then directed the CAWG to conduct annual reviews of the aggregate study safe-harbor criteria.

safe-harbor thresholds spp rsc

SPP’s Regional State Committee January meeting | © RTO Insider

SPP’s aggregate transmission service study process combines all long-term point-to-point and designated network resource requests received during a specified time period into a single study.

The RTO splits the costs of transmission projects between the entire SPP footprint and LSEs purchasing transmission service for designated resources — those used to meet the LSE’s capacity margin requirement.

The safe harbor exempts LSEs from upgrade costs for a TSR when the aggregate studies’ waiver criteria are met:

  • Wind generation may not exceed 20% of designated resources.
  • TSRs must have a minimum five-year term.
  • Designated resources may not exceed 125% of forecasted load.

Utilities can also apply for an increase in the safe-harbor limit of $180,000/MW.

safe-harbor thresholds spp rsc

Adam McKinnie | © RTO Insider

The CAWG approved the five-year and 125% thresholds unanimously, but it cleared the 20% wind limit by a 6-3 vote. Representatives from the Arkansas, Missouri and New Mexico commissions opposed the motion, while Iowa’s representative abstained.

Adam McKinnie, chief utility economist for the Missouri Public Service Commission and the CAWG’s chair, said he wanted to address wind energy’s operational issues in other ways than by determining who pays for which transmission projects.

“We felt something should be done, but I didn’t see this particular criteria as being the right tool for the job,” McKinnie said.

“Our state utilities had a lot of input to me on this,” said the Nebraska Power Review Board’s John Krajewski. “While I’m sympathetic and I understand the desire to eliminate this threshold, there are a lot of concerns with regard to the operations of thermal units and [SPP’s ability] to send proper signals to thermal units.”

Krajewski said the safe-harbor limits don’t prevent LSEs from adding wind above the 20% threshold. “If you exceed the threshold, then you would simply have to pay for any necessary transmission improvements,” he said.

McKinnie said the CAWG would next review and discuss the safe-harbor limit.

12% Planning Reserve Margin OK’d

The RSC also unanimously endorsed the Supply Adequacy Working Group’s recommendation to replace SPP’s capacity margin terminology with a 12% planning reserve margin requirement.

The revision request (RTWG-RR 187) was approved by the Markets and Operations Policy Committee in January. It incorporates previously approved policies that identify who is responsible for resource adequacy, the resource adequacy requirement and how and when the requirement should be met. (See “Stakeholders Endorse 12% Planning Reserve Margin, Policies,” SPP Markets and Operations Policy Committee Briefs.)

Personnel Moves

safe-harbor thresholds spp rsc

RSC Chair Steve Stoll, Missouri Public Service Commission, chairs his first meeting. | © RTO Insider

The committee also made several personnel moves. RSC Chair Steve Stoll, a commissioner with the Missouri PSC, announced Commissioner Kim O’Guinn (Arkansas Public Service Commission) and Board Member Dennis Grennan (Nebraska PRB) have been added to the Regional Allocation Review Task Force to fill their states’ seats.

Committee members unanimously agreed to establish a nominating committee for future RSC elections and to work out the details during their annual retreat in July.

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