Thursday, February 21, 2019

SPP Strategic Planning Committee Briefs

Committee to Lead Response to FERC’s ‘Resilience’ Request

OKLAHOMA CITY — SPP’s Strategic Planning Committee last week decided it will respond to FERC’s request for a definition of “resilience,” rather than losing valuable time turning the effort over to a newly created task force.

The commission on Jan. 8 rejected Energy Secretary Rick Perry’s call for cost-of-service payments to coal and nuclear generators, instead creating a new docket (AD18-7) requiring RTOs and ISOs to answer two dozen questions about how they define and assess resilience. FERC said it will use the response to determine whether additional action is necessary. (See DOE NOPR Rejected, ‘Resilience’ Debate Turns to RTOs, States.)

Grid operators must respond by March 9.

American Electric Power’s Richard Ross, stressing the importance of stakeholder feedback, asked, “Will the creation of a task force end up consuming two-thirds of the time needed to get feedback?”

SPP strategic planning committee resilience

SPP’s Strategic Planning Committee conducts its January meeting | © RTO Insider

During the SPC’s Jan. 18 meeting, SPP staff initially suggested creating a forum in which they could solicit member concerns and input on resiliency issues, but they eventually yielded to the SPC’s management role to save time.

SPP strategic planning committee resilience

SPP CEO Nick Brown adds his thoughts to the discussion | © RTO Insider

“Let’s start the discussion and see what happens,” SPP CEO Nick Brown said. “Using the whole Strategic Planning Committee is the best approach. Let’s let our team of experts put straw comments together, and see where they fly.”

Brown assured the committee he is, and will be, in “constant contact” with his counterparts to track progress at other RTOs, and said there was little appetite for asking FERC for an extension.

“I suggest we move ahead as best we can, using our existing stakeholder process,” he said.

Asked whether this was the commission’s effort to end up with resiliency standards, Brown said he didn’t know. “I think FERC is just looking for guidance on this. It’s a new commission, and there’s a lot of different thoughts on that commission.”

FERC has started the dialogue by inviting feedback on its suggested definition of resilience: “The ability to withstand and reduce the magnitude and/or duration of disruptive events, which includes the capability to anticipate, absorb, adapt to and/or rapidly recover from such an event.”

SPP strategic planning committee

Paul Suskie, with Mike Ross to his left, explains SPP’s response to FERC’s resiliency directive | © RTO Insider

SPC Chair Mike Wise, with Golden Spread Electric Cooperative, said he would work with the committee’s staff secretary Michael Desselle and SPP General Counsel Paul Suskie to create a timeline and process for gathering input.

Energy-only Resources Report Leads to Discussion, not Results

A staff report on including energy-only resources in SPP’s transmission planning process generated significant debate but did not result in an action item.

Staff reminded the committee several times that it was only presenting a status report, and that it would provide more information in the future.

“It’s pretty clear from the discussion we have some concerns,” Wise said. He and Desselle “want to spend some time looking at this before we get back to you.”

Staff said they are attempting to develop and adopt policies that better align SPP’s generation interconnection, transmission service and integrated transmission planning processes to “provide value proportional to cost when considering capacity and energy-only resources.”

SPP strategic planning committee resilience

SPP’s Jay Caspary | © RTO Insider

Jay Caspary, SPP’s director of research, development and special studies, said this will address a perception that there is an “inequity of costs associated with market access and transmission expansion” allocated to load-serving entities when compared to non-LSE interconnection customers.

As the discussion dug deeper into the weeds, it was evident that stakeholder concerns ranged in many different directions, from the meaning of firm and non-firm transmission service to the length of time it takes proposed projects to get through the interconnection queue.

Caspary highlighted one equity issue as the “big one”: LSEs or merchants with energy resources compete equally in the market with those that have capacity resources and typically incur lower costs with associated market access.

“We could determine all network load in the footprint is firm,” Wise said. “That’s one way to eliminate much of this issue.”

“That may be very well where we end up,” said Lanny Nickell, SPP vice president of engineering. “We were trying to limit our creative thinking to what we felt we could accomplish. These are just ideas, not the end-all, be-all solutions to all the concerns we’ve been hearing.”

Staff said they would narrow a list of “modification considerations” — and “not proposals,” Nickell clarified — and incorporate the SPC’s feedback into a whitepaper, to be presented to the committee in the future.

Until then, much of the project’s burden could fall onto the Generator Interconnection Improvement Task Force (GIITF), which has been asked to address the overloaded interconnection queue and new requirements from FERC’s proposed rulemaking initiatives.

The GIITF in April intends to share with the Markets and Operations Policy Committee details on its three-stage process to clear the queue’s backlog. The group expects its next major issue to be rules accommodating battery storage, following a “dozen or so” requests for storage in the latest queue.

“That’s a bigger and bigger item for us to deal with,” said SPP’s Steve Purdy, the GIITF’s staff secretary. “We have a lot to accomplish by October.”

The MOPC recently granted the task force a one-year extension to develop a replacement for SPP’s current interconnection process. (See “Generator-Interconnection Task Force Extended for 1 Year,” SPP Markets and Operations Policy Committee Briefs.)

Governance Committee Reviewing SPP’s Committee Structure

Brown told the SPC that the Corporate Governance Committee is reviewing SPP’s governance structure to ensure it still matches where the RTO is today — and will be soon with the possible integration of the Mountain West Transmission Group.

SPP’s footprint touches 14 states, stretching from East Texas to the Canadian border, having added Nebraska utilities and the Integrated System since 2009.

“We need to put some thought into the governance structure as we continue to grow,” Brown said. “Is a committee structure we put in place in 2003, and changed incrementally, appropriate for where we are today? It’s time. We just haven’t sat down and taken a detailed look.”

The Finance Committee is also moving forward with changes to increase transparency into SPP’s budget, which Brown said raises questions about the RTO’s withdrawal fee.

“All those things fit together,” he said, promising the SPC and Board of Directors will stay informed of the progress.

— Tom Kleckner