FERC approves SPP plan to help Canadian entities participate in SPP market

With one minor wording change, FERC accepted the Southwest Power Pool (SPP) proposal to change its tariff to designate the border between the United States and Canada as the point of sale for transactions involving Canadian entities.

The ruling “establishes a distinct transactional point at the border, which facilitates clear regulatory oversight between FERC and the Canadian authorities” for transactions with SPP, Matt Morais, associate general counsel, markets and regulatory policy at SPP, said in a statement provided to TransmissionHub March 10.

Canadian entities have been able to participate in SPP’s markets, but the FERC order provides regulatory clarity for such transactions, Morais said.

The tariff change will aid Canadian entities participating in the SPP Integrated Marketplace through an interconnection with Basin Electric Power Cooperative (Basin Electric), which has a connection with Canadian transmission facilities, FERC noted. 

Designating the U.S./Canada border as the point of sale for transactions involving Canadian entities will allow Canadian entities to register resources and make them available under SPP’s market rules, FERC said. That also will clarify the regulatory authorizations needed for market participants on both sides of the border, such as transactions that must be reported to the National Energy Board of Canada and the U.S. Department of Energy, FERC said.

When it filed the tariff proposal with FERC Jan. 8, SPP said the filing was made at the request of an unnamed Canadian entity looking to participate in the Integrated Marketplace following the addition of Basin Electric as a transmission owner in SPP. The Integrated Marketplace in SPP, which began March 1, 2014, 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.

Basin Electric, with a service territory among its members that includes a large stretch along the Canadian border in North Dakota and Montana, joined SPP as part of the Integrated System on Oct. 1, 2015.

According to the March 8 order (Docket No. ER16-704), SPP said three types of schedules would be subject to transactions between SPP and a Canadian entity: “export interchange” to serve load in Canada; “import interchange” for importing energy into the Integrated Marketplace; and “through interchange” for exports and imports to serve load on both sides of the U.S./Canada border.

SPP told FERC that Canadian entities will be subject to the same rules as any other market participant, and that the tariff revisions were similar to those approved by FERC for other regional transmission organizations engaged in market transactions with Canadian entities.

No party protested the tariff change, but Manitoba Hydro suggested a wording change in order to avoid restricting the type of transactions that could take place, FERC noted. Manitoba Hydro said that two sections of the tariff proposal should be altered to use the term “source” instead of “resource,” since resource, as defined by SPP’s tariff, would exclude certain imports from Canada.

Under the SPP tariff, resource offers from market participants carry specific requirements, while non-resource offers can include import interchange transaction offers, which involve providing energy from a source external to the SPP balancing authority area (BAA), Manitoba Hydro said. Use of the term resource would exclude generation facilities that are not pseudo-tied to SPP or that are not dynamically scheduled into or out of SPP, even though the SPP proposal was designed to allow market participants with generation outside of the SPP BAA to move energy into the SPP market, Manitoba Hydro claimed.

Manitoba Hydro said replacing the word “resource” with “source” would provide clarity and avoid limiting the type of transactions allowed, and SPP did not object to the suggestion, FERC related.

The commission agreed with Manitoba Hydro and directed SPP to make the wording change in a compliance filing within 30 days of the order.