SPP in conservative operations through Feb. 20, power prices set new records

New York — Southwest Power Pool remains in conservative operations due to high loads and other severe cold weather implications as power prices reach record levels and freezing temperatures continue across the region.

A period of conservative operations remains in effect until 10 pm CT Feb. 20. SPP officials have credited conservation with lessening the impacts of outages across the region, seeing load come in 2 GW below forecast peak at times.

"While grid conditions have improved, we anticipate load and generation fluctuation over the next 48 hours, and conditions could change rapidly," according to SPP's 10:02 am update. "In periods of conservative operations, SPP may use longer-term unit commitment notifications, including making commitments prior to day-ahead and/or committing resources that are in reliability status."

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Officials hoped the be out of the emergency and conservation situation by the end of Thursday or Friday, they said during a Feb. 17 update call.

SPP South Hub on-peak day-ahead locational marginal prices reached $3,821.05/MWh for Feb. 18 delivery, while North Hub on-peak day-ahead LMP reached $3,385.08/MWh, both surpassing the record levels set Feb. 15, according to SPP data.

Current situation

The SPP region was forecast Feb. 18 to be out of negative temperatures for the first time in days, but temperatures remain below freezing levels for much of the region. Little Rock, Ark., was forecast to reach 35 degrees Fahrenheit Feb. 18, while Kansas City was forecast to see a high of 17 F, according to CustomWeather. Forecast low temperatures range from 5 F to 22 F across the SPP footprint.

SPP forecast peakload around 41.94 GW for Feb. 18, 41.494 GW for Feb. 19, 35.972 for GW Feb. 20, 32.809 GW for Feb. 21 and 31.721 GW for Feb. 22. Actual peakload since Feb. 14 has averaged 34% above the five-year average, while forecast peakload through the rest of the week is averaging 35% higher than the five-year average.

Realtime prices were around $300/MWh at about 10:45 am CT Feb. 17, according to SPP.

SPP South Hub on-peak day-ahead for Feb. 19 was bid at $550/MWh and offered at $1,200/MWh on the Intercontinental Exchange, while South Hub weekend traded at $350/MWh.

Record load

The SPP system set a new winter peakload record of 43.661 GW Feb. 15, as South Hub on-peak day-ahead LMP reached $3,360.72/MWh and North Hub on-peak day-ahead LMP reached $3,202.59/MWh, the highest level in SPP history until Feb. 18, according to SPP data.

As demand surpassed available supply, SPP directed member utilities to shed power Feb. 15 and 16.

"We haven't been in this boat before where we had to give orders to take outages," SPP CEO and President Barbara Sugg said during a Feb. 17 updated call. "We are not out of the woods yet. The freeze is still here."

If controlled outages were not initiated, the grid runs the risk of cascading, uncontrolled outages.

"At the point where demand exceeds supply, we have to correct it nearly immediately," Lanny Nickell, SPP executive vice president and chief operating officer, said during the Feb. 17 update call. "If not, the system does that automatically and causes cascading, uncontrolled outages. We can't intervene when that begins to happen."

Energy Emergency Alerts

The extreme cold weather created energy deficiencies across SPP's region and marked the first time in its 80-year history that it had to declare Energy Emergency Alert Levels 2 or 3 for its entire region or had to direct member utilities to implement controlled, temporary service interruptions to prevent widespread blackouts, according to a Feb. 18 news release.

SPP declared conservative operations Feb. 9 until further notice in anticipation of the winter storm.

Load-serving utilities throughout the SPP region were requested to conserve energy beginning at midnight Feb. 15 and for the following 48 hours to mitigate the risk of more widespread and longer-lasting outages.

SPP declared an EEA Level 1 early Feb. 15, signaling the system may be unable to meet required contingency reserves. That was upgraded to an EEA Level 2 later late day, requiring SPP to direct member companies to appeal to the public to conserve energy. It also served as a maximum emergency generation notification for resources and informed the market that emergency ranges of any resources may be required.

An EEA 3 was declared Feb. 15 when SPP was forced to begin relying on required reserve energy. SPP directed member utilities to implement controlled, temporary service interruptions, and 641 MW were interrupted for about 50 minutes, representing about 1.5% of total load at the time, Nickell said during a Feb. 16 update call.

The situation eased to an EEA Level 2 shortly after noon Feb. 15 as load was restored to the region with enough generation to meet demand and minimum reserve requirements.

However, SPP declared an EEA Level 3 again early Feb. 16 as system-wide generating capacity dropped below current load of 42 GW due to extremely low temperatures and inadequate supplies of natural gas. Member utilities were directed to implement controlled, temporary service interruptions and 2.7 GW were interrupted for more than 3 hours, representing about 6% of load, Nickell said during a Feb. 16 update call.

Although there was enough generating capacity available to meet system-wide demand four hour later, SPP remained in an EEA Level 3, indicating it was still operating below required minimum reserves.

The situation eased to an EEA Level 2 by 11:37 am Feb. 16 and then to EEA Level 1 shortly after noon.

SPP escalated to an EEA Level 2 around 6:30 pm Feb. 16 and directed members to issue public conservation appeals.

The situation was downgraded to an EEA level 1 midday Feb. 17 but escalated to an EEA Level 2 at 6:20 pm. It later returned to an EEA Level 1 at 11 pm.