By Philip Reed, Nov. 30, 2016
At midnight on Oct. 1 2015, WAPA's Upper Great Plains region, Basin Electric Power Cooperative and Heartland Consumers Power District transferred functional control of the integrated transmission system to Southwest Power Pool and began operating in the regional transmission organization, or RTO, and its organized market.
This was the final step in achieving full membership in the RTO and it made WAPA the first federal power marketing administration to become a full RTO member. The integration was the result of years of discussions and public involvement. One year after the interconnection, Vice President of Power Marketing for UGP Jody Sundsted reflects on joining the SPP.
"The transition has been smooth," said Sundsted. "We turned the functional control of our transmission system over to SPP and our load and generation in the eastern interconnection was placed in the SPP Integrated Marketplace. Those first few hours of observation were tense for staff, but all transferred functions operated smoothly and have been operating smoothly since."
Sundsted credits the success to the 18 months of preparation involved, as well as the integration team members who dedicated their time, attention and experience to the project. "I can't thank them enough for the outstanding job they did."
The large amount of pre-integration planning and setup by the team resulted in a seamless integration with the SPP, with the interconnection's benefits exceeding WAPA's expectations.
"The Alternate Operations Study that WAPA and UGP authored before joining SPP projected $11.5 million in first-year savings, mostly from cost avoidance," explained Sundsted. "By joining SPP we have, in fact, avoided costs at a greater rate than projected."
Some of this cost avoidance is attributable to the full access UGP now has to SPP's Integrated Marketplace. This allows the region to purchase energy to meet firm commitments to customers and to sell any surplus hydropower generation.
"This past year our generation was reduced, due to below-normal hydropower conditions," Sundsted said. "We had to purchase just under 1.6 million megawatt-hours of energy in the Integrated Marketplace, and the price we paid per megawatt-hour was at a historic low not seen since the 1980s. Energy pricing is influenced by the price of natural gas and renewables, however access to the SPP Integrated Marketplace has allowed us to avoid additional third party transmission costs."
Access to the Integrated Marketplace also avoided potential issues with transmission loading relief schedule cuts. Before joining SPP, UGP saw many of its energy schedules cut to relieve congestion inside of the neighboring RTOs. This caused UGP to re-dispatch generation within the balancing area. "That was, at times, very challenging to accomplish, and not economical when compared to the schedules that were cut," Sundsted explained.
This is just a portion of the benefits UGP has experienced over the previous year. In joining SPP, UGP had to fundamentally change many of its marketing, transmission, financial and business practices. All of the consideration, planning, and hard work involved in making the interconnection was worth it, however.
"Our first year of results in SPP have proven that our pre-integration planning and setup was successful," Sundsted concluded. "It's enough to say that WAPA is extremely pleased."