In its Feb. 5 filing at FERC, the Southwest Power Pool (SPP) sought to designate two areas of its grid – the Texas Panhandle and Woodward, Okla. – as frequently constrained areas (FCAs) where market power is a concern due to pivotal suppliers or transmission congestion.
The grid operator told FERC that transmission expansions and upgrades in the past few years have altered flows and addressed congestion that was previously experienced in the Kansas City area and northwest Kansas.
SPP reviews possible FCAs annually, following analysis from the SPP Market Monitoring Unit (MMU), and it sought the designation for the two areas after SPP stakeholders and the SPP board approved the designations, according to the filing. SPP sought FERC approval of the designations with an effective date of April 5.
An FCA designation is specifically about market power mitigation and does not obligate SPP to address the constrained area through transmission enhancements, an SPP spokesperson told TransmissionHub Feb. 9. Resources in a designated FCA are subject to more stringent mitigation rules, the spokesperson said.
Even so, the SPP planning process has identified and approved upgrades that are expected to at least partially mitigate congestion in the Woodward, Okla., area beginning as early as 2018, the spokesperson said.
In its filing, which includes a December 2015 study from the MMU, SPP said that only the Texas Panhandle currently is identified as an FCA. Previous designations of the Kansas City area and the northwest Kansas area – prior to the start of the Integrated Marketplace on March 1, 2014 – have been negated as grid upgrades affected congestion patterns and resolved some of the concerns with pivotal suppliers in those areas, SPP said.
The Integrated Marketplace is a day-ahead market with transmission congestion rights, a price-based operating reserves market, a real-time balancing market, virtual trading and a reliability unit commitment process, according to SPP.
The MMU study noted that the analysis marks the third year in a row that the Texas Panhandle has had a significant number of pivotal supplier hours during the year, although the 536 hours is the lowest total among the three FCA studies.
“The study this year more fully reflects the impacts of the 2012 through 2014 transmission expansion,” along with the use of historical data from the Integrated Marketplace, the MMU said.
The MMU uses a 500-hour threshold for pivotal supplier hours as part of its analysis to determine which areas should be designated FCAs.
The Woodward, Okla., area, just east of the Oklahoma Panhandle, has been highly congested since the start of the Integrated Marketplace, and has seen the addition of significant wind generation, the MMU study said. A limiting element is the Woodward to FPL Switch, a 138-kV facility near the intersection of several 345-kV transmission lines that were energized in 2014, along with 500 MW of wind power capacity near the Tatonga 345-kV substation.
“The increase in congestion and pivotal supplier hours correlates with the change in congestion patterns that appears to be the result of transmission expansion in the western part of the SPP footprint and new wind generation in the area,” the MMU study said.
Noting that it expects both the Texas Panhandle and Woodward, Okla., area to be vulnerable to the exercise of market power during the next 12-month period, the MMU recommended that the Texas Panhandle maintain its FCA designation and that the Woodward, Okla., area be designated as a new FCA.