Understanding SPP and its interconnection to Oklahoma’s electric co-ops
Publisher’s Note: As consumer-members of Oklahoma’s electric cooperatives, it’s likely you have heard of the Southwest Power Pool (SPP).
In this article, we attempt to explain the scope of the SPP and how it relates to some of the generation and transmission cooperatives and their member distribution cooperatives in Oklahoma. This article is one in a two-part series; next month, you will read about a generation and transmission cooperative that is not a member of a regional transmission organization. These articles serve as an educational tool for consumer-members of electric cooperatives in Oklahoma.
The Southwest Power Pool (SPP), a regional transmission organization (RTO), states their mission is to “responsibly and economically keep the lights on today and in the future.” To fulfill this charge in an increasingly complex industry, SPP acts as an “air traffic controller” on behalf of the member utilities it serves across a 14-state footprint, including Oklahoma. A nonprofit corporation mandated by the Federal Energy Regulatory Commission (FERC), SPP ensures reliable supplies of power, adequate transmission infrastructure and competitive wholesale electricity prices in the central U.S.
Two out of three generation and transmission electric cooperatives that are members of the Oklahoma Association of Electric Cooperatives are also members of SPP. Western Farmers Electric Cooperative (WFEC), headquartered in Anadarko, Oklahoma, serving 17 distribution cooperatives in Oklahoma and four in New Mexico, is a member of the SPP as well as Golden Spread Electric Cooperative, based in Amarillo, Texas, which is the wholesale power supplier for the Oklahoma panhandle, serving distribution electric cooperative, TCEC as well as 15 distribution cooperatives in Texas (service areas displayed on map provided).
A few of the services SPP provides are:
• Reliability Coordination & Balancing Authority: SPP regulates power flow throughout its footprint, addressing, in real time, issues of transmission congestion, generation unit outages and changes in system load. SPP balances electric supply and demand, also known as a balancing authority, ensuring there is sufficient generation to meet electric demand by leveraging the region’s diverse fleet of hundreds of generating units with different characteristics and in varying conditions.
• Tariff Administration: SPP utilizes a FERC-approved tariff for all transmission services within their footprint. For example, Oklahoma-based WFEC is a transmission owner; however, as a member of SPP, WFEC does not sell transmission services independently. WFEC has agreed for SPP to sell on their behalf, and they buy from SPP under a rate that is fair and equal for all parties in the footprint. In the words of WFEC’s CEO, Gary Roulet, “Everyone is treated identically. There’s no competition.” This creates an ease of gaining access to critical transmission without utilities having to negotiate service in other systems.
• Market Operations: SPP maintains and coordinates an integrated marketplace to facilitate the sale and purchase of electricity in a way that ensures economical reliability. Member utilities such as WFEC utilize SPP’s day-ahead market, which selects the cheapest generation to serve load (energy) within the footprint in a reliable and cost-effective manner. “We offer available generation every day at cost to the SPP market; by offering generation at cost, we are guaranteed to at least break even,” Roulet says.
For WFEC, one key advantage of their membership with SPP is “significant less risk” when units fail, or unexpected events happen to a member utility.
“If you lose a big unit and conditions deteriorate, the RTO market will shield you from greater impact. The market will make sure your load is served. The risk is picked up by everyone in the footprint,” Roulet says.
To learn more about the SPP, WFEC and Golden Spread, visit: spp.org, wfec.com, and gsec.coop.