The Northwest Power Pool's development of a regional resource adequacy mechanism crossed an important milestone when NWPP announced Aug. 11 the Southwest Power Pool will design the region's resource adequacy program.
The Arkansas-based RTO will work with NWPP and 18 member utilities to expand and refine the preliminary program design into a comprehensive RA program. The scope of SPP's work is expected to last through 2020. After that NWPP will start looking for a program administrator to implement and run the program.
NWPP initially planned to have the RA program up and running in 2022, but that's been pushed back. Frank Afranji, president of Northwest Power Pool, told Clearing Up the RA program will likely launch in late 2023 or early 2024.
"It will take a little longer, because we'll have a substantial testing period," he said.
Afranji described the Southwest Power Pool in a press release as having "direct experience developing and running a resource adequacy program across multiple states" and "the skill set to help us determine key program design features to achieve the reliability objectives of the RA program."
He continued, "The program we are developing will be available to participants with different needs and interests across a wide swath of the West and we believe SPP's multi-state RA program experience will help us develop a program that provides benefits for all participants as well as the region."
A report done by the NWPP in October 2019, when discussion first started over creating a regional RA program, described SPP’s RA program as serving "primarily to assess regional and sub-regional RA needs, allocate those needs to utilities, and qualify participating resources."
"Capacity procurement is done entirely via self-supply or bilateral contracts. Importantly, despite being a FERC-jurisdictional RTO, SPP's RA governance structure is largely managed by representatives from member states' public utility commissions and the region's public power community," the Northwest Power Pool's report said.
NWPP discussed a draft RA program proposal during a webinar in April that would require each participant to have sufficient installed and available capacity to meet their reliability needs.
On July 31, NWPP launched a voluntary interim RA program that operates in a day-ahead planning arena, and allows participating members to assist each other when specific system conditions are met.
The region faces a growing capacity shortage in the wake of retirement of several coal-fired power plants. According to a study by San Francisco-based consulting firm Energy and Environmental Economics released in December, the Pacific Northwest could be facing a 3,000 MW capacity deficit by 2030 (CU No. 1933 ).
Several of the region's largest utilities face impending capacity shortages beginning next year and ballooning to several hundred megawatts by 2025.
Portland General Electric's updated 2019 integrated resource plan shows a capacity need of about 250 MW beginning in 2021, increasing to about 270 MW in 2023 and reaching 697 MW as contracts begin expiring in 2025. The utility is preparing to release a request for proposals for emitting resources to help meet its capacity needs, and has already signed several contracts with regional hydroelectric generators.
Puget Sound Energy's demand forecast shows a need for 82 MW in 2024 and 201 MW in 2025 before jumping to 753 MW in 2026, 935 MW in 2027 and 997 MW in 2028 before hitting 1,048 MW in 2030. The utility has an all-source RFP pending before Washington regulators.
Spokane,Wash.-based Avista needs winter peaking capacity starting in 2026, after the utility losses 222 MW from Colstrip and a power purchase agreement with the 257 MW Lancaster combined cycle natural gas-fired plant expires (CU No. 1943 ).
NorthWestern Energy released an RFP on June 26 looking for energy and capacity proposals of 25 MW to 300 MW.
The Southwest Power Pool balancing authority area covers 575,000 square miles and encompasses all or parts of Arkansas, Iowa, Kansas, Louisiana, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas and Wyoming.
The SPP footprint has approximately 61,000 miles of transmission lines, over 750 generating plants, 4,811 transmission-class substations and serves a population of 18 million people.
"We are excited to assist the Northwest Power Pool in this important effort to develop a resource adequacy program in the West," Barbara Sugg, president and CEO of Southwest Power Pool, said in a press release. "SPP has administered a regional resource adequacy program in various forms and phases over the past five decades. Our expertise in program design, development and administration as well as our experience working with stakeholders and regulators will provide value to the NWPP RA program development effort."