Southwest Power Pool of Little Rock is poised to become the first organization to provide regional transmission services in both the Eastern and Western Interconnections of the American power grid.
Seven western utilities have committed to joining the nonprofit RTO, which has a Federal Energy Regulatory Commission mandate to ensure ample power supplies, an adequate transmission infrastructure and competitive wholesale electricity in more than a dozen states.
The utilities set to join SPP serve electric customers in Arizona, Nevada, North Dakota, Colorado, Utah, Wyoming, Montana, Nebraska, New Mexico and South Dakota. The utilities plan to join SPP in 2026, reaping economic and reliability benefits by taking advantage of a larger generation fleet, greater geographic diversity and more economical electricity purchasing through SPP’s energy markets.
The organizations to join are Basin Electric Power Cooperative, Colorado Springs Utilities, Deseret Generation and Transmission Cooperative, Municipal Energy Agency of Nebraska, Platte River Power Authority, Tri-State Generation and Transmission Association, and three regions of the Western Area Power Administration.
Those three WAPA regions are the Colorado River Storage Project, the Rocky Mountain Region and the Upper Great Plains-West.
It 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.
SPP has worked with organizations interested in membership benefits and requirements since October 2020. According to a study by the Brattle Group, a Boston consulting firm, the group of western utilities can expect at least $49 million in annual savings, as well as greater help in achieving renewable energy and reliability goals and holistic transmission planning, according to a news release from SPP.
WAPA and Basin Electric announced their decision to pursue SPP membership his month, rounding out the group of joiners, who are now preparing to participate in SPP’s governance, energy markets and planning processes.
“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 now participating in the SPP Western Energy Imbalance Service market, known as WEIS.
The WEIS offers efficient real-time energy dispatch, providing an estimated $31.7 million in net benefits for participants in 2022 and reduced wholesale energy costs by $1.35 per megawatt hour.
SPP’s president and CEO, Barbara Sugg, said the reliability enhancements and increased value for participants drove the utilities’ decisions to join as full RTO members.
“Our collaborative and member-driven business model centers on bringing value to our RTO members and those utilities we serve in both interconnections,” Sugg said in a statement.
“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 expects further expansion of its RTO service territory in the west and will integrate additional members beginning in 2027, the release said. Other western entities interested in joining SPP’s RTO footprint have a deadline of March 1, 2024, to signal their interest if they hope to participate in the market by March 2027.
SPP has 110 member companies in the Eastern Interconnection. It has operated as an RTO since 2004, and has managed regional reliability since 1941.