The Southwest Power Pool (SPP) told Arkansas state regulators July 18 that congestion in its Energy Imbalance Service (EIS) market in June was concentrated in three areas: central Kansas, the Kansas City area and the Texas Panhandle.
Much of the congestion can be attributed to fluctuating wind generation and planned maintenance outages, along with high external impacts in the Kansas City to Omaha corridor, according to the SPP Market Monitoring Unit’s “Monthly State of the Market Report June 2012,” published July 16.
The SPP recently said in its 2011 state of the market report that the Texas Panhandle area was the most congested part of the SPP system and congestion in the Panhandle remained the single most import issue affecting the SPP wholesale electric market.
According to the July 18 filing made with the Arkansas Public Service Commission, eight new wind resources were added to the resource mix in the SPP EIS market in June.
“It is important to note that when new resources are added to the market, they may not be ready for commercial production, or even testing,” SPP added. “In fact, only two of the new wind resources had any significant output during the month. This would explain the decrease in capacity factor from May to June, although capacity increased by over 1,000 MW, generation was nearly flat.”
As the peak summer season approaches, higher loads resulted in a 14% generation increase from May to June. SPP also said that gas prices have been on the margin, thus setting the price, during 61% of intervals in June, slightly down from 62% in May.
Gas prices at the Panhandle Eastern hub were almost stable from May, increasing by four cents to an average of $2.33/MMBtu for June. The locational imbalance price (LIP) for the EIS market decreased by nearly a dollar from May with an average of $21.33/MWh. SPP also said that compared to a year ago, LIP is nearly $12/MWh lower, a 36% decrease, while gas cost is just over $2/MMBtu lower, or a 47% decrease.
SPP also said the spread between the highest and lowest average LIP for market participants was less than $4/MWh, adding that the typical spread between the highest and lowest market participants averages between $6/MWh and $8/MWh.