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Additional Utility Joins Evaluation of SPP RTO Expansion to the West

April 12, 2021
WAPA's Colorado River Storage Project is the sixth electric service provider in the West to publicly commit to exploring RTO expansion in the Western Interconnection.

Southwest Power Pool (SPP) received a letter from Western Area Power Administration's (WAPA's) Colorado River Storage Project (CRSP) expressing interest in evaluating membership in the organization.

The CRSP is the sixth electric service provider in the West to publicly commit to exploring regional transmission organization (RTO) expansion in the Western Interconnection. On Nov. 12, 2020, Basin Electric Power Cooperative, Deseret Power Electric Cooperative, the Municipal Energy Agency of Nebraska (MEAN), Tri-State Generation and Transmission Association, and WAPA's Upper Great Plains (UGP)-West and Loveland Area Projects notified the SPP of their intent

If these utilities pursue membership, they would become the first members of the SPP's RTO to place facilities in the Western Interconnection under the terms and conditions of the SPP's Open Access Transmission Tariff. This would extend the reach and value of the SPP's services — including day-ahead wholesale electricity market administration, transmission planning, reliability coordination, and resource adequacy — and the synergies they provide when bundled under the RTO structure.

The above-interested parties in this initiative currently receive at least one of the SPP's contract-based Western Energy Services in the Western Interconnection. The CRSP participates in two: Western Reliability Coordination and the Western Energy Imbalance Service Market. Basin Electric, MEAN, Tri-State and WAPA’s UGP-East Region are already members of the SPP, having joined the RTO in 2015 when they placed their respective facilities in the Eastern Interconnection under the SPP’s tariff.

"Having the CRSP join the SPP's exploratory effort is a logical next step as we evaluate how to remain valuable and relevant to our customers and the communities that rely on federal hydropower and electric services now and in the future," said Tracey A. LeBeau, interim administrator and CEO of WAPA. "As always, we are committed to collaborating with our customers and stakeholders as we assess this opportunity. Any decision to move forward with final negotiations for SPP RTO membership for the CRSP or any WAPA region will be consistent with our statutory requirements and involve the appropriate public processes."

A Brattle study commissioned by the SPP found that the move would be mutually beneficial and produce US$49 million a year in savings for the SPP's current and new members. The western utilities joining the SPP would receive US$25 million a year in adjusted production cost savings and revenue from off-system sales, and the SPP's members in the east would benefit from US$24 million in savings resulting from the expansion of the SPP's market, transmission network, and generation fleet.

The SPP's prior calculations of the value of RTO membership suggest that these benefits are only a portion of those current and new members will derive. There is additional value not considered by the Brattle study in 5-min real-time economic dispatch, achievement of public policy goals, lowered reserve-margin requirements, consolidation and regionalization of planning and other processes, and more.

Additionally, the SPP anticipates its wholesale electricity market, resource adequacy program, and other regionalized services can help western members achieve renewable-energy goals and reinforce system reliability.

"The SPP already has a strong partnership and history of successful collaboration with WAPA, and we're greatly encouraged by the interest from them and other western utilities in potential RTO membership," said Barbara Sugg, SPP president and CEO. "This expression of interest from their CRSP is a welcome affirmation of our belief that the Western Interconnection stands to gain tremendous value through services like those we can provide them. We look forward to the process of formally evaluating the possibility of their membership in our organization and look forward to the results of those discussions."

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