The Western Area Power Administration’s (WAPA) Upper Great Plains Region will hold a webinar Nov. 13 in preparation for three public meetings to gather input on a recommendation that it pursue formal negotiations to join the Southwest Power Pool (SPP).
The recommendation, which was published in the Federal Register Nov. 1, calls for WAPA to pursue formal negotiations for the region’s eastern balancing authority to join SPP while the region’s western balancing authority would remain out of SPP’s market. However, such an arrangement would still provide benefits of the western balancing authority, Jody Sundsted, WAPA’s power marketing manager for the Upper Great Plains region, told TransmissionHub.
Hydropower in the eastern portion of that region is marketed to “preference entities” in eastern Montana, North Dakota, South Dakota, western Minnesota, Iowa and eastern Nebraska over an integrated transmission system comprising the WAPA region, Basin Electric Power Cooperative and the Heartland Consumers Power District. There is also a western portion of the region that markets power to Wyoming and Colorado.
“We’re just making sure that we’ve heard from our customers, our stakeholders and other interested parties about things that we haven’t thought of, or things we should consider,” Sundsted said of the upcoming webinar and public meetings. “We have a long history as a federal entity to go out and do stakeholder listening sessions, customer listening sessions, and we need to incorporate that [input] in this decision we’re trying to make.”
He said: “What we’ve talked about is putting our transmission facilities inside the RTO and they would provide the ability to have a non-pancaked rate. The west side facilities would not be in the organized market portion [of SPP] but they may very well be in there for transmission service.”
At present, approximately 50% of the region’s preference load is beyond the edge of the integrated transmission system. That load is delivered across third-party transmission systems in the Midcontinent ISO (MISO) and SPP, predominately under arrangements made by the region’s preference customers, creating seams between market and non-market entities.
“Any time we have a seam between a market and a non-market, the organized market uses redispatch to resolve constraints, and of course they have the LMP pricing that puts a price signal to certain folks that are behind a constraint,” Sundsted said.
However, because the WAPA region is not a member of an organized market, the RTO is limited to using transmission loading relief mechanisms (TLRs) to manage constraints on congested flowgates, meaning that the WAPA region must reduce the power intended for delivery to its customers.
“As they develop that market to the south, particularly in Nebraska, we’re going to be susceptible to possibly even more TLRs and certainly [fewer] bilateral trading entities,” Sundsted said.
Market membership would make more tools available to mitigate congestion, including security-constrained economic dispatch.
”We have a challenge of the natural ebbs and flows on the hydro system,” he said. “We rely on access to a good strong competitive market to be able to handle the ups and downs of that hydro system, and we’re afraid as these Day 2 markets start, we’re going to be in an uncompetitive position, and we need to have access to a market.”
“We’re going to be able to participate in the day-ahead market,” he said, though its participation would be limited.
“On average, all of our energy is sold to our firm-power customers; it’s just the ups and downs that we’d be accessing the market,” Sundsted said. “We’ve asked for some special considerations for the federal hydropower.”
He said the move to join SPP and access the market is in line with the enabling legislation, the Flood Control Act of 1944, which led to the establishment of the Pick-Sloan Missouri Basin Program that provides the power the region markets. The legislation includes the words, “Lowest possible rates to consumers consistent with sound business principles.”
Sundsted said joining an organized market is another step in the evolution of those sound business principles.
“Markets have evolved and RTOs have evolved, so this is just another good step in getting together with a group of utilities that are members in an RTO and can function every well and keep the costs down for our consumers, which is our ultimate goal,” he said.
“We anticipate it will be our wholesale firm power customers [that will comment],” he said. “We have over 300 customers that we sell power to. Each of those also has a co-supplier [that furnishes power when WAPA’s supplies are fully committed] and those people will be very involved because they have generation within this footprint.”
WAPA is seeking public comment from its customers, Native American tribes, other stakeholders, and the public at large. Following the webinar, the agency will hold three public meetings to present a detailed explanation of the Alternate Operations Study Team’s findings and recommendation. Those meetings will be held in Lincoln, Neb., Nov. 19; Sioux Falls, S.D., Nov. 20; and in Fargo, N.D., Nov. 21.
A 45-day public comment that began with the recommendation’s publication in the Federal Register ends Dec. 16. A decision to pursue implementation of the recommendation is expected shortly after the end of the comment period.