Southwest Power Pool to Implement Policy Changes, Enhance Market Development

The Southwest Power Pool Inc., the regional transmission organization for 14 states in the central U.S., on July 29 announced plans to implement policy changes and improve its market development strategies in the second half of 2020. The announcement follows a suite of approvals from the organization’s board and stakeholder committees.

The board approved four recommendations of the Holistic Integrated Tariff Team, established in 2018, to comprehensively review the organization’s cost allocation method, transmission planning, Integrated Marketplace, and real-time operations. The Integrated Marketplace is the grid operator’s wholesale energy market that selects the most cost-effective generation to reliably meet demand. The approval brings the number of completed recommendations to 8 out of 21. 

SPP’s Market Operations Policy Committee approved a new 2020 Strategic Market Roadmap that involves 44 new initiatives that aim to enhance “efficiency, transparency, reliability and price formation.” The system operator initiated the roadmap process in December 2019 to improve stakeholder collaboration on proposed changes to the day-ahead and real-time electric markets. The process adds more transparency, giving stakeholders input into the design and market improvements earlier in the resource planning and decision-making processes.

Other topics spanned in SPP’s quarterly meeting include:

• Continued Expansion: in spite of extenuating circumstances, SPP President and CEO Barbara Sugg maintained that the launch of the SPP’s Western Energy Imbalance Service Market shall remain on course for a February 2021 initiation.
• Increased collaboration with the Midcontinent Independent System Operator 
• Committing to remain affordable especially due to the COVID-19 pandemic given the exacerbation of vulnerable communities’ access to reliable electricity
• The primacy of wind power: Wind generation is expected to be the number one power source for the SPP this year, with 24 gigawatts connected to the grid and an increase of 27 forecasted for the end of 2020. 

SPP oversees a 546,000-square-mile region which includes over 60,000 miles of high-voltage power lines, encompassing Arkansas, Iowa, Kansas, Louisiana, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas and Wyoming.The system operator remains optimistic in its outlook that energy demand shall regress to more normal levels. Figures presented at the meeting reveal that annual electricity demand fell between 8-10 percent on average due to the COVID-19 pandemic but has shifted back to normal expectancy in the past two months.