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Southwest Power Pool, Mountain West effort moves forward

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Southwest Power Pool, Mountain West effort moves forward

An effort to integrate a group of western electricity service providers into the Southwest Power Pool took a step forward on March 13 after the board of directors approved a set of policies defining the terms and conditions of the entities' potential membership in the regional transmission organization.

The coalition of electricity service providers known as the Mountain West Transmission Group and the Southwest Power Pool, or SPP, have spent months hammering out details of membership in SPP and participation in its wholesale electricity markets. SPP in a news release said the board approved a series of policy statements and directed staff and stakeholders to draft appropriate supporting amendments to its tariff, bylaws and membership agreement.

A webinar will be held on March 22 to provide a detailed explanation of the policies, but they generally deal with matters such as SPP membership, governance, direct current ties, transmission planning, resource adequacy, rates and revenue.

For instance, the policy statement calls for the Mountain West entities to begin paying administrative fees to fund SPP's operating expense, known as Schedule 1-A fees, over three years. Further, SPP's Members Committee will grow by three seats and the Strategic Planning Committee by four seats, while the Regional State Committee would expand to include commissioners and utility regulators from western states.

The policy statement also calls on SPP to establish east and west planning regions. SPP's standard integrated transmission planning processes will govern planning in each region and across the combined SPP footprint. SPP, as needed, will work with appropriate planners on local solutions that will be incorporated into the integrated transmission planning portfolio of recommended projects.

The Mountain West coalition includes the Western Area Power Administration, Tri-State Generation and Transmission Association Inc. and Xcel Energy Inc.'s Colorado utility, known legally as Public Service Co. of Colorado. It has about 6.4 million customers and 16,000 miles of transmission lines primarily in the U.S. Rocky Mountain Region.

The coalition began discussions in early 2013 about whether to work toward a common transmission tariff or whether participants should join an existing regional transmission organization. Mountain West in September 2017 said it intended to pursue SPP membership. The move is expected to benefit both parties, SPP said.

Studies done for Mountain West have indicated annual savings of $80 million to nearly $154 million through participation in SPP's markets and optimization of direct-current ties linking the SPP and Mountain West footprints. Mountain West also expects to see additional benefits resulting from SPP's regional approach to transmission planning and efficiencies from the grid operator's provision of balancing authority, transmission service, reliability coordination and training services.

SPP estimates its current members could receive more than $500 million in total net benefits over the first 10 years of Mountain West's membership. Integration of the Mountain West entities as members will take roughly two years, SPP said, noting that it plans to implement reliability coordination services sooner, in late 2019.