The Southwest Power Pool said it has received letters of intent from several utilities to possibly place their Western facilities into its regional transmission organization, after a study found the move would produce $49 million in annual savings.
If the move happens, Basin Electric Power Cooperative, Deseret Power Electric Cooperative, the Municipal Energy Agency of Nebraska, Tri-State Generation and Transmission Association, and the Western Area Power Administration would become the first members of SPP's RTO with facilities in the Western Interconnection, Little Rock, Ark.-based SPP said in a news release.
SPP said its wholesale energy market, resource adequacy program and other RTO services would help the entities achieve their renewable energy goals, make the grid more reliable, and create new opportunities to buy and sell power.
Basin Electric, MEAN, Tri-State and WAPA's Upper Great Plains-East Region have been members of SPP since 2015, and along with Deseret, each is a customer of at least one of SPP's contract-based Western services, including reliability coordination and a real-time market scheduled to launch in February 2021.
A Brattle Group study found that Western EIM participants' membership in the SPP RTO would produce about $49 million per year for SPP's current and new members. The Western utilities would receive $25 million per year in adjusted production cost savings and revenue from off-system sales, and SPP's members in the East would save $24 million from the expansion of SPP's market, transmission network and generation fleet, SPP said.
Joining any market would save money over the ensuing decades, Tri-State CEO Duane Highley said during a Nov. 12 news conference with Colorado Gov. Jared Polis. Meeting Colorado's goal of 100 percent emissions-free energy by 2040 will require regional coordination, he added.
Polis and Highley agreed that SPP offers more options to market Colorado's renewable energy assets and more rapidly expand load balancing than the California ISO's Western EIM.
Tri-State does not intend to use coal resources within SPP, but is excited about the prospect of taking advantage of the RTO's wind resources for its members while being able to move solar power from its resources eastward, Highley said.
Colorado is in an ideal position geographically, with the power to arbitrage in both the Eastern and Western interconnections, he said. If the SPP RTO proves to be the wrong choice, "we can pivot back in [the CAISO] direction," he said.