The Southwest Power Pool will assume reliability coordinator duties for much of the Western Area Power Administration's balancing authorities in late 2019, while the California ISO will assume those duties for the Sierra Nevada region, the administration announced late Sept. 4.
The announcement prompted praise from SPP officials, but the Western Power Trading Forum's executive director expressed uncertainty over the future of power markets in the West.
Reliability coordinators ensure members comply with reliability standards and help restore operations of the bulk power system after a major disruption.
Peak Reliability in July announced plans to wind down its operations as reliability coordinator for most of the Western Interconnection at the end of 2019 after the CAISO in January announced plans to serve as its own reliability coordinator starting in the spring of 2019. Western Area Power Administration, or WAPA, began exploring new providers in early 2018 when it submitted notices of withdrawal to Peak RC.
WAPA's announcement said SPP would serve as reliability coordinator, or RC, beginning in late 2019 for the following regions: Western Area Upper Great Plains — West region, which includes significant parts of Montana; Western Area Colorado Missouri, which includes most of Colorado and Wyoming, plus parts of Arizona, Nebraska, New Mexico and South Dakota; and Western Area Lower Colorado, which includes significant parts of Arizona.
Carl Monroe, SPP executive vice president and COO, welcomed the news of his organization's being chosen as RC for these areas.
"SPP has a proven history of working effectively with neighboring RCs, and we have experience in RC services that include both market and non-market areas, allowing us to ensure equitable operations," Monroe said. "We're confident our experience, tools, and processes can contribute to enhancing reliability in the west. And as we've done with our neighbors in the eastern interconnection, we’re committed to working with CAISO to establish tools and data exchanges that ensure wide area visibility between RCs."
The Sierra Nevada region, a transmission operator within the Balancing Authority of Northern California, will follow the authority's schedule in using the CAISO as RC, also expected to occur in late 2019. The CAISO and SPP must be certified to serve as RC providers in the Western Interconnection before these changes can be made.
Kevin Howard, WAPA executive vice president and COO, said, “We will work with neighboring utilities to ensure an orderly transition to the SPP and CAISO RCs as Peak winds down its operations in 2019.”
In August, the Bonneville Power Administration, Idaho Power Co. and PacifiCorp committed to using the CAISO as RC.
WPTF Executive Director Scott Miller said that "RC selection has been used by some as a stalking horse for market platform choices." However, a bill to facilitate the expansion of the Cal-ISO market outside the state failed to pass by the Aug. 31 deadline, which impedes such an expansion, Miller noted. So "it remains to be seen if RC selection is really a trend towards something beyond RC services or one dot on a plot line that is yet to be drawn," he said.
Mark Watson is a reporter for S&P Global Platts which, like S&P Global Market Intelligence, is owned by S&P Global Inc.