Holistic Integrated Tariff Team Report Joint SPC/MOPC briefing July 2019
HITT Membership SPP Board Jim Eckelberger (Director) Graham Edwards (Director) Regional State Shari Feist Albrecht (Commissioner Kansas Corporation Commission) Committee Dennis Grennan (Commissioner Nebraska Power Review Board) Investor Owned Utilities Richard Ross (AEP) Denise Buffington (KCPL) Greg McCauley (OG&E) Bill Grant (SPS) Cooperatives Mike Wise (Golden Spread) Mike Risan (Basin) Al Tamimi (Sunflower) Independent Power Rob Janssen (Dogwood Energy) – Vice-Chair Producers Holly Carias (NexEra) Municipals Dennis Florom (LES) State Agencies Tom Kent (Nebraska Public Power District) - Chair Independent Brett Leopold (ITC Great Plains) Transmission Companies CAWG Liaison Cindy Ireland (Arkansas PSC Staff) 2
HITT GOALS & DRIVERS
Ensuring reliability for a changing generation mix and new technologies Enhancing Integrated Marketplace to reliably deliver low-cost energy to customers Aligning transmission planning and cost allocation with SPP’s market and consolidated Balancing Authority 4
Ensuring reliability for a changing generation mix and new technologies 300, 30 0,00 000,0 0,000 00 Energy Production (MWh) 25 250, 0,00 000,0 0,000 00 200, 20 0,00 000,0 0,000 00 150,0 0,000 00,0 ,000 00 100,0 0,000 00,0 ,000 00 50,0 50 ,000 00,00 ,000 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Coa oal Gas Ga Wind nd Nuclear ar Hyd ydro Oth ther er Annual GI Requests Since 2013 (MW) 60000 400 0000 00 20000 0 2013 2014 2015 2016 2017 2018 5 Oth ther Wind So Sola lar St Storage
20,0 20,000 25,0 25,000 Megawatts 10,000 15,000 5,00 5,000 0,000 5,000 Installed Wind Capacity 00 00 0 2001 2001 2002 2002 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 201 2010 201 2011 201 2012 201 2013 201 2014 201 2015 201 2016 201 2017 201 2018 6
Evolving Energy Mix 70 70 63% 61% 60% 59% 60 60 55% 48% 46% 50 50 neration 42% 40 40 e of gener 27% 30 30 24% 23 % 23 % 23% 22% 21% entage 19% 17 % 20 20 23% 14% 12 % 11% Percent 20% 8 % 6 % 10 10 0 201 2011 201 2012 2013 201 2014 201 201 2015 2016 201 201 2017 201 2018 Coal oal Gas as Wind 7
Why generation diversity matters: SPP’s record wind swing (13 GW in 22 hours) 16,000 000 Max @ 21:45 on 3/14/19 14,000 000 15,147 MW 12,000 000 Wind Output (MW) 10,000 000 8,000 8, 000 6,000 6, 000 4,000 000 Min @ 19:46 on 3/15/19 2,000 2, 000 1,843 MW 0 Time 8
Generation Interconnection Queue 85,676 MW 0.4% 6.7% 33% Wind (50,973 MW) Solar (28,531 MW) 60% Storage (5,796 MW) Gas (376 MW) As of June 2019 9
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Enhancing Integrated Marketplace to reliably deliver low-cost energy to customers 11 Average annual real-time market prices
Aligning transmission planning and cost allocation with SPP’s market and consolidated Balancing Authority 12
HITT RECOMMENDATIONS
Stakeholder presentations Date Group Presenters and Lead (L) Location Status 5/9-5/10 SPC retreat Tom Kent (L), Rob Janssen Branson, MO Completed 5/29 SAWG Rob Janssen (L), Gary Cate AEP Dallas Completed Tom Kent (L), Paul Suskie, Cindy Ireland 5/30 RSC/CAWG DFW-Hyatt Completed John Krajewski 6/13 ESWG Paul Suskie (L), Antoine Lucas, Al Tamimi AEP Dallas Completed 6/14 TWG Paul Suskie (L), Antoine Lucas, Gary Cate WebEx Completed 6/19 MWG Paul Suskie (L), Richard Ross, Gary Cate AEP Dallas Completed 6/24 RSC/CAWG Paul Suskie, Cindy Ireland, John Krajewski DFW-Hyatt Cancelled 6/27 ORWG Paul Suskie (L), Gary Cate, CJ Brown WebEx Completed 6/27 RTWG Rob Janssen (L), Gary Cate AEP Dallas Completed 7/16 SPC/MOPC Tom Kent (L), Rob Janssen Des Moines, IA July 17, 2019 14
HITT Report Overview 21 recommendations in four categories 5 Reliability 4 Marketplace 9 Transmission Planning & Cost Allocation 3 Strategic 12 recommendations are actions 9 recommendations are evaluations/studies 15
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Timeline by date (Proposed) MWG Jul-19 R3. Markets: ramping RTWG Oct.-19 C3. Z2 replacement MWG Jan-20 R3. Markets: fast-start Parallel timeline Staff Jan-20 S3. Storage white paper recommended TWG Jan-20 T2. Uniform Sch.9 planning criteria ESWG Jan-20 T5. B/C ratio for economic projects MWG Apr-20 R3. Markets: multi-day MWG Apr-20 M1. Congestion hedging improvements MWG/ORWG Apr-20 M4. Economic evaluations of reliability TWG/MOPC/SAWG Apr-20 T1. Modify NRIS (SAWG/TWG) & ERIS (MOPC) TWG Apr-20 T3. Load addition modifications Staff Jul-20 R1. Study ERS & ORS RSC/CAWG Jul-20 C1. Decouple Sch. 9 & 11 RSC/CAWG Jul-20 C2. Byway cost allocation review RSC/CAWG Jul-20 C4. Cost allocation transmission storage MWG Oct-20 R4. Markets: uncertainty MWG Jan-21 M2. Offer requirements variable resources MWG Jan-21 M3. Mitigation unduly low offers Staff Jan-21 T4. Three-phase GI process effectiveness MWG Apr-21 R2. ERS/ORS compensation 17
Timeline by recommendation (Proposed) Staff R1. Study ERS & ORS Jul-20 MWG R2. ERS/ORS compensation Apr.-21 MWG R3. Markets: ramping Jul-19 MWG R3. Markets: fast-start Jan-20 R3. Markets: multi-day MWG Apr-20 MWG R4. Markets: uncertainty Oct-20 MWG M1. Congestion hedging improvements Apr-20 M2. Offer requirements variable resources MWG Jan-21 M3. Mitigation unduly low offers Jan-21 MWG M4. Economic evaluations of reliability MWG/ORWG Apr-20 TWG/SAWG/MOPC T1. Modify NRIS (SAWG/TWG) & ERIS (MOPC) Apr-20 T2. Uniform Sch.9 planning criteria TWG Jan-20 T3. Load addition modifications TWG Apr-20 T4. Three-phase GI process effectiveness Staff Jan-21 ESWG T5. B/C ratio for economic projects Jan-20 C1. Decouple Sch. 9 & 11 CAWG/RSC Jul-20 C2. Byway cost allocation review CAWG/RSC Jul-20 RTWG C3. Z2 replacement Oct-19 CAWG/RSC C4. Cost allocation transmission storage Jul-20 S2. Storage white paper Staff Jan-20 18
Slides for each recommendation include High-level stakeholder process steps & schedule • Goal dates for stakeholder process completion • ‒ Implementation dates are to be decided Lead and secondary groups • HITT team vote • Icon indicating if recommendation is to be • implemented or studied/evaluated 19
#1 Study Essential Reliability Service (ERS) and Other Reliability Service (ORS) NERC defines ERS as: • Frequency support ‒ Ramping and balancing ‒ Voltage support ‒ ORS takes into account that as grid changes, SPP is not confident • all reliability needs are captured in NERC’s ERS definition ORS includes new technologies that change underlying nature of • grid operations that are not traditional operator tools “Uncertainty product” is an example of ORS • 20
#1 Study ERS and ORS SPP should perform comprehensive study to evaluate • reliability challenges with changing generation resource mix Study should identify all ERS and ORS needed in future to • keep the lights on 21
#1 Study ERS and ORS 201 2019 2020 2020 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Staff ff Coordi dina nate, devel elop p and nd complete e study dy requ equirem emen ents s with h report to t to MWG, G, SAWG G and ORWG G input ut MOPC MO PC Stakeholder completion goal July 2020 Lead group Staff Secondary group MWG, ORWG, SAWG HITT vote Consensus 22
#2 Implement ERS/ORS compensation model Use study results from reliability recommendation #1 to • establish compensation model for each ERS and/or ORS Review regulation service compensation to determine if • service is appropriately valued Consider cost causation and whether technology that • reduces need for regulation service should receive some of the compensation 23
#2 Implement ERS/ORS compensation model 2020 2021 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. MWG dev develop r repo eport an and d MWG r repo eport MWG t to o asse ssess ss r resu sults s of ERS/ORS st study coordinate wi coor with ORWG to MO MOPC PC Stakeholder completion goal April 2021 Lead group MWG Secondary group ORWG HITT vote Consensus 24
#3 Implement marketplace enhancements Continue Integrated Marketplace enhancements including: Ramping capability ‒ Fast-start resource logic ‒ Multi-day, longer-term market product ‒ 25
#3 Implement marketplace enhancements 2019 2020 July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June MWG Ramp MWG MOPC endorse FERC filing product * develop RR endorse RR MWG Fast-start MWG MOPC endorse FERC filing Resources** develop RR endorse RR MWG MWG Multi-day MOPC MWG develop straw proposal develop MWG develop RR endorse FERC filing market endorse policy RR Stakeholder completion goal July 2019* (ramp), Jan. 20** (fast-start), Apr. 20 (multi-day Lead group MWG Secondary group N/A HITT vote Consensus * HITT report lists July 2019 completion date for ramp product. RTWG did not approve RR in June; completion is now projected in Oct. 2019. 26 ** HITT report lists Jan. 2020 date for fast-start product. A recent FERC order directs SPP to make a compliance filing in Dec. 2019. Completion is projected in Oct. 2019.
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