Southwest Power Pool (SPP) will become the first organization in the U.S. to provide full regional transmission organization (RTO) services in both the Eastern and Western Interconnections of the nations power grid. The expansion of SPPs service territory is expected to create economic and reliability benefits for its member companies through access to a larger generation fleet, greater geographic diversity, and increased trading opportunities in SPPs energy markets. A study conducted by the Brattle Group estimates at least $49 million in annual savings for the western utilities joining the SPP RTO.
Original Press Release:
LITTLE ROCK, Arkansas, Sept. 14 -- Southwest Power Pool, Inc. issued the following news release:
Southwest Power Pool (SPP) will soon become the first organization in the U.S. to provide full regional transmission organization (RTO) services in both the Eastern and Western Interconnections of the nation’s power grid. SPP has received commitments from seven western utilities to become full members in the RTO. Basin Electric Power Cooperative, Colorado Springs Utilities, Deseret Generation and Transmission Cooperative, Municipal Energy Agency of Nebraska (MEAN), Platte River Power Authority, Tri-State Generation and Transmission Association, and three regions of the Western Area Power Administration (WAPA)—Colorado River Storage Project (CRSP), Rocky Mountain Region (RM) and Upper Great Plains-West (UGP)—are preparing to join the RTO in early 2026. The expansion of SPP’s service territory is expected to create economic and reliability benefits for its member companies through access to a larger generation fleet, greater geographic diversity, and increased trading opportunities in SPP’s energy markets.
Since October 2020, SPP has been working with parties interested in evaluating the benefits and requirements of RTO membership. In addition to at least $49 million in annual savings according to a study conducted by the Brattle Group, this group of western utilities also identified opportunities to leverage a number of benefits from SPP services to achieve renewable energy goals, protect reliability, enable more holistic transmission planning, and participate in a day-ahead wholesale electricity market. WAPA and Basin Electric announced their decision to pursue membership in the SPP RTO this month, rounding out the group of new members that will now prepare for participation in SPP’s governance structure, energy markets, planning processes and other services.”
The commitments of these utilities solidifies SPP’s long-term strategy for RTO and market expansion to bring increased value to existing and new members. Additionally, this growth will allow SPP and its members to enhance sustainability and reliability in the west and involves optimizing energy markets across three DC ties, creating new opportunities for energy transfers and increased resilience for both current and future members. This is the first major expansion of SPP’s RTO service territory since October 2015 when it grew from 9 to 14 states by incorporating the Integrated System into its full suite of market and transmission services.
“The expansion of our RTO will open a vast array of opportunities for utilities in SPP’s growing market footprint” said Bruce Rew, SPP senior vice president of operations. “Creating multiple market options for new members will enable market designs that align with the unique needs of one or more geographic regions and provide opportunity for all to benefit.”
The western utilities now pursuing RTO membership are currently participating in the SPP Western Energy Imbalance Service (WEIS) market. The WEIS, which facilitates efficient real-time energy dispatch, provided an estimated $31.7 million in net benefits for participants in 2022 and reduced wholesale energy costs by $1.35/MWh. The noted enhancements to reliability and increased value for participants was a key driver for making the move to full RTO membership.
“Our collaborative and member-driven business model centers on bringing value to our RTO members and those utilities we serve in both interconnections,” said Barbara Sugg, SPP president and CEO. “We are thrilled to see this expansion of our RTO and bring our innovative approach to grid management to new customers in the west. This marks not only a key milestone in SPP’s history, but points to the transformation of the energy market in the Western Interconnection, and highlights the opportunities created by having multiple options and market operators in the west.”
SPP anticipates further expansion of its RTO service territory in the west and will integrate additional members beginning in 2027. Other western entities interested in joining SPP’s growing RTO market footprint have a deadline of March 1, 2024, to signal their interest if they wish to participate in the market by March 2027.
SPP currently has 110 member companies in the Eastern Interconnection, has operated as an RTO since 2004, and has managed regional reliability since 1941.
Source: Southwest Power Pool, Inc.
[Category: Electric Utilities, Utilities, Funding Activities]