The Western Area Power Administration (WAPA) on Oct. 12 said that is seeking comments by Nov. 27, on negotiating RTO membership for two of its projects – the Loveland Area Projects (LAP) and the Colorado River Storage Project (CRSP) – as part of participation in the Mountain West Transmission Group.
WAPA said that it has initiated the 45-day public comment period to collect comments regarding its recommendation for the projects to pursue final negotiations regarding membership in the Southwest Power Pool (SPP) through a Federal Register notice. WAPA said that comments received by Nov. 27 will help inform a decision about whether SPP membership for the projects will provide near- and long-term reliability and economic benefits for customers in alignment with WAPA’s commitment to provide power at the lowest possible rates, consistent with sound business principles.
WAPA noted that it expects to make a final decision in early 2018, and that integration into SPP, if pursued by WAPA, could occur in late 2019.
The CRSP and LAP are participants in the Mountain West Transmission Group, which began discussions in 2013 to evaluate a suite of strategic options expanding from a common transmission tariff to membership in an existing RTO, WAPA said.
As noted in WAPA’s “Recommendation to pursue membership in the [SPP RTO],” which was updated on Oct. 11, the Mountain West Transmission Group is a collaboration among electricity service providers that are working to develop strategies to adapt to the changing electric industry.
Extensive analyses indicate that RTO membership and market participation would provide greater benefits to customers than a common tariff alone, WAPA noted in its Oct. 12 statement.
In early 2017, Mountain West participants announced detailed discussions with SPP regarding potential RTO membership, with those discussions leading to formal negotiations with SPP and to the Oct. 12 announcement of WAPA’s public process, WAPA said. SPP is holding a separate public stakeholder process on proposed modifications necessary for Mountain West Transmission Group participants to become SPP members, WAPA noted.
As noted on WAPA’s website, WAPA will host three public information forums on the matter on Nov. 9 in Phoenix, Ariz., and in Loveland, Colo., as well as on Nov. 14 in Salt Lake City, Utah.
According to the “Recommendation to pursue membership in the [SPP RTO],” the CRSP markets the output of Bureau of Reclamation-owned hydroelectric facilities of the Collbran Project, Rio Grande Project, and the Colorado River Storage Project, collectively known as the Salt Lake City Area Integrated Projects, which serve Arizona, Colorado, New Mexico, Utah, and Wyoming with 1,816 MW of installed hydroelectric generation capacity, and more than 2,323 miles of transmission line.
WAPA added that the LAP markets the output of Bureau of Reclamation-owned hydroelectric facilities of the Fryingpan-Arkansas Project and the Pick-Sloan Missouri Basin Program-Western Division. The projects serve Colorado, Kansas, Nebraska, and Wyoming with 830 MW of installed hydroelectric generation capacity and 3,360 miles of transmission line.
The electricity industry in the United States is undergoing a fundamental shift that will increasingly affect bulk electric system operations, markets, and planning, WAPA said.
The combined impact of low natural gas prices, decentralization of natural gas and renewable generation, increases in variable generation resources, changes in consumer demand patterns, and advancement of demand-side technologies are creating a significantly more dynamic system than what electricity providers have managed in the past, WAPA said.
As a result of the shifts in the electricity industry, the way the system was historically operated is becoming increasingly untenable and there is an increasing need for wide-area situational awareness and control, for instance, WAPA said. RTOs have the ability to dispatch and rebalance the system in sub-hourly and near-real-time increments using algorithms designed to co-optimize system reliability and economic performance, WAPA said.
As a result, electricity providers in the West are evaluating risks associated with the status quo relative to the costs and benefits of RTO membership or variants of centralized operations and markets, WAPA said, adding that for the CRSP and LAP in particular, RTO participation has the potential to provide benefits to customers, preserve reliability, and hedge against risks associated with ongoing changes in the electricity industry.