SPP board, members committee initiate review of February storm event, outages

New York — The Southwest Power Pool board of directors and members committee approved March 2 a comprehensive review steering committee to look into the events surrounding the February winter storm that hit the US and caused SPP to direct rotating outages Feb. 15-16.

The five-path collaborative review, approved during a special board and members committee meeting, will report overall assessments and lessons learned to the board of directions in July.

"We're pretty proud of how things functioned, but not so proud that we don't think we can do better next time," SPP President and CEO Barbara Sugg said.

The five parallel reviews include:

• perations, focused on operational reliability, balancing authority, market performance and gas/electric coordination;
• financial, focused on settlement issues, credit issues and make-whole payment review;
• Regional State Committee, whose review focus area is to be determined;
• Market Monitoring Unit, which will focus on the actual gas costs for settlement purposes, market behavior and rules issues, and how the markets worked overall; and
• communications, focused on communications protocols and coordination.

Winter storm impact

The SPP system set a new winter peakload record of 43.661 GW Feb. 15, surpassing a three-year record, according to SPP data.

SPP set record-high prices Feb. 18 for both on-peak and off-peak at both hubs, surpassing highs reached Feb. 15. SPP South Hub on-peak day-ahead locational marginal prices hit $3,821.05/MWh for Feb. 18 delivery, as off-peak day-ahead LMP peaked at $4,072.14/MWh, according to SPP data.

The extreme cold weather created energy deficiencies across SPP 's region. SPP issued several declarations for Energy Emergency Alert Levels 2 or 3.

SPP issued a weather alert Feb. 4 in anticipation of the winter storm, and declared conservative operations Feb. 9 that status remained until Feb. 20.

Public appeals for energy conservation also went out.

"We could see demand was going to be at an all-time high for this time of year," said Lanny Nickell, SPP executive vice president and chief operating officer. "We used every single alert level available to us."

Rotating outage drivers

As demand surpassed available supply, SPP directed member utilities to shed power. On Feb. 15, 641 MW were interrupted for about 50 minutes, representing about 1.5% of total load at the time, while on Feb. 16 there was 2.7 GW interrupted for more than 3 hours, representing about 6% of load, SPP officials said during update calls last week. Rotating outages are issued to prevent widespread blackouts.

"In 80 years, SPP has never had to issue local curtailment instructions across it's footprint like we did here," Nickell said, adding SPP did everything to prepare for the event. "We used every last megawatt we could get within out footprint and from neighbors."

There were three drivers to the need for rotating outages, Nickell said about generation unavailability, rapid reduction of energy imports and record wintertime energy consumption.

"The major contributor to the conditions we were experiencing was lack of generation," Nickell said.

Generation was unavailable due to a lack of fuel supply – for natural gas and coal generators – and icing and extreme cold weather-related outages – for mostly wind generators, Nickell said, adding SPP normally expects to have 60 GW available, but available generation dropped about 20 GW below historical February expectations.

"Gas generator was probably hit the hardest and that was because of fuel supply," Nickell said about gas generation representing about 60% of total unavailable generation, adding the same natural gas people use to heat their homes is the same fuel used to generation electricity.

Wind generation outages were about five times more than the first week of February, Nickell said.

"If we didn't have those imports we would have been in a much longer duration of outages," Nickell said about more people effected.

However, there was also a rapid reduction of energy imports that was transmission congestion related, in addition to other regions' tightening supply conditions. SPP imported generation from MISO in the east, as well as others in the east, and via DC tie from the west, Sugg said.

Lastly, SPP had record wintertime energy consumption and set a new peakload record.

Temperatures across SPP averaged about 12 degrees Fahrenheit Feb. 14-20, 70% lower than normal, according to CustomWeather data.

"It's normal to expect cold temperatures in the north," Nickell said. "You normally don't see those temperatures in the south as well."

FERC waivers

The US Federal Energy Regulatory Commission granted SPP's expedited request for a limited waiver to allow SPP to post market settlement statement for operating days Feb. 13-16 on Feb. 24 instead of the normal seven-day posting schedule, said Paul Suskie, SPP executive vice president of regulatory policy and general counsel.

FERC noted that the SPP Market Monitoring Unit receive numerous offers that exceeded the $1,000/MWh offer cap, the possibility of repricing and SPP's need to be as accurate as possible when posting the statements.

"We felt that was important because those statements are binding," Suskie said.

FERC also granted SPP's expedited request for a limited two-week waiver for load serving entities' requirement to provide SPP with collateral within two-days notice. Some SPP market participants received or will receive collateral calls multiple times greater than the actual invoices for SPP market purchases, Suskie said. LSEs will now have until March 11.

SPP recalculated prices for 37 intervals on Feb. 14 due to system/software error after a massive winter storm struck the region and caused record-high gas prices that led to record-high power prices.

Cold weather caused record-high natural gas spot prices and with natural gas generators burning high-prices fuel it caused the price of electricity to climb. Day-ahead locational marginal prices in the SPP footprint, but not at a hub location, reached an all-time high of $4,274.96/MWh on Feb. 15.

"Things were happening in real time and a lot of this was happening in uncharted waters we've never been in before," SPP board of directors chair Larry Altenbaumer said.