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Southwest Power Pool to Dissolve Regional Entity, Focus on RTO Functions

Southwest Power Pool, Inc. and the North American Electric Reliability Corp. have mutually agreed to terminate the Amended and Restated Delegation Agreement between North American Electric Reliability Corp. and Southwest Power Pool, Inc.  On July 23, 2017, the SPP Regional Transmission Organization’s (RTO) board of directors and members committee voted to authorize President and Chief Executive Officer Nick Brown to terminate the delegation agreement at the appropriate time, which will effectively dissolve the SPP Regional Entity (RE). The SPP RE Trustees approved a resolution on July 24, 2017 endorsing the decision.

“Over the last decade, the SPP RTO has expanded its footprint from eight to 14 states, launched successful real-time and next-day energy markets, and become a consolidated balancing authority for its 546,000-square-mile region. Given that the footprints of the SPP RTO and SPP RE no longer align — due to our significant growth over the last decade and in light of further potential expansion opportunities to the west — and with the support and encouragement of NERC and the SPP RE Trustees, SPP’s executives, board of directors and members committee have made the strategic decision to focus on our core functions of reliability coordination, wholesale market operations and transmission planning. I believe this is in the long-term best interest of SPP and our members.” said SPP President and Chief Executive Officer Nick Brown.

SPP will continue to work closely with NERC and the Federal Energy Regulatory Commission, who must approve the termination of the SPP RE delegation agreement, and to facilitate a smooth transition of the SPP RE’s 120 registered entities to another electric reliability compliance enforcement authority. SPP is likewise committed to ensuring the continued employment of all SPP RE staff, who represent 24 of SPP’s 605 employees. The SPP RE will continue to function until a successful transition is completed, which will occur no later than Dec. 31, 2018.

The SPP RE, a NERC-designated electric reliability compliance enforcement authority, is an independent and functionally separate division of SPP, Inc. which was created in 2007 to fulfill the duties specified in the FERC-approved RE Delegation Agreement between SPP and NERC. The SPP RE currently provides auditing and enforcement functions for 120 electric utilities acknowledged by NERC as registered entities.

Through the Energy Policy Act of 2005, FERC designated NERC as North America’s electric reliability organization (ERO) with the authority to enforce compliance with electric reliability standards. NERC subsequently designated SPP — already an RTO and registered entity — as an RE in 2007, granting the responsibilities to improve bulk power system (BPS) reliability by monitoring and enforcing registered entities’ compliance with reliability standards; assessing and evaluating BPS reliability; and providing technical expertise and assistance to BPS owners, operators and users in SPP RE's footprint — an eight-state area including all or part of Arkansas, Kansas, Louisiana, Mississippi, Missouri, New Mexico, Oklahoma and Texas.

At the time FERC designated NERC as an ERO and NERC subsequently delegated compliance monitoring and enforcement authority to its REs, half of those were affiliated with registered entities, and SPP is the only remaining organization to operate as both an RTO and RE. When SPP dissolves the SPP RE, only one of the eight will remain affiliated with a registered entity, and no ISO/RTOs will perform RE functions.

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