Southwest Power Pool Implements Integrated Marketplace

by Lee Hogan  on Monday, Mar. 3, 2014 10:19 am  

Nick Brown, Southwest Power Pool Inc.'s president and chief executive officer. (Photo by Jason Burt)

Southwest Power Pool of Little Rock said Monday that it has successfully implemented its Integrated Marketplace and is the first Regional Transmission Organization (RTO) to design, build and deliver a day-ahead market on time and on budget.

SPP expects the marketplace — comprised of day-ahead market, real-time balancing market and congesting hedging markets — to achieve up to $100 million in annual net benefits. The Integrated Marketplace saw about 30,000 megawatts of power being exchanged at any time during its first two days of operation, SPP said.

The Arkansas Electric Cooperative Corp. of Little Rock generates power through the lines of SPP and Entergy Arkansas Inc. A transmission market lets an operator monitor the energy costs from multiple sources and determine the cheapest source.

The new market allows SPP to decide which generators should operate one day ahead of time. The previous model allowed each participant to decide which generation it will run that day to meet its needs based on knowledge of the system. The system could result in inefficiency if a high-cost generator is switched on and kept running at a minimum capacity. 

Bruce Rew, SPP's vice president of operations, told Arkansas Business in August that the budget for the upgrade was $115 million. SPP expects the upgrade o save ratepayers about $10 million per month, he said.

More: How the Power of the Electric Marketplace Stays Wired

"The Integrated Marketplace program is the latest and most complex incremental step in SPP's evolutionary approach to improving our service to members and the region," SPP President and CEO Nick Brown said in a news release. "The program had many moving parts, but we focused on ensuring everyone — market participants, members, vendors and our staff — reached the finish line at the same time."

The marketplace takes the place of SPP's Energy Imbalance Service Market, which was in operation since 2007. Plans for the Integrated Marketplace began soon after the service market's implementation. The market design was approved in April 2011.

The marketplace became financially binding at 12:05 a.m. Saturday.

SPP said the Integrated Marketplace will improve grid reliability by determining which generating units should run the next day for maximum cost-effectiveness, and improve the regional balancing of supply and demand. In addition, the marketplace is expected to facilitate further integration of renewable resources in the company's market, SPP said.

The Federal Energy Regulatory Commission accepted the SPP's certification of readiness and approved the marketplace's start-up and operation last week.

SPP will now be responsible for meeting significant and numerous regulatory and compliance requirements. With the implementation of the Integrated Marketplace, SPP's 16 legacy Balancing Authorities have been combined into a consolidated SPP Balancing Authority.

 

 

Please read our comments policy before commenting.