SPP Today and Tomorrow Missouri Public Service Commission 1 SPP - PDF document

SPP.org 1 SPP Today and Tomorrow Missouri Public Service Commission 1

“SPP 101” SPP.org 3 Our Beginning • Founded 1941 with 11 members � Utilities pooled resources to keep Arkansas aluminum plant powered for critical defense • Maintained after WWII for reliability and coordination SPP.org 4 2

SPP at a Glance • Incorporated in Arkansas as a 501(c)(6) non-profit corporation • FERC - Federal Energy Regulatory Commission � Regulated public utility � Regional Transmission Organization • NERC - North American Electric Reliability Corporation Reliability Corporation � Founding member � Regional Entity SPP.org 5 Operating Region 54 Members in nine states: • Arkansas Mississippi New Mexico Kansas Missouri Oklahoma Louisiana Nebraska Texas SPP.org 6 3

SPP Members SPP.org 7 Operating Region • 370,000 square miles service miles service territory • 47,000 miles transmission lines: 69 kV – 13,649 miles 115 kV 115 kV – 9,171 miles 9,171 miles 138 kV – 9,294 miles 161 kV – 4,550 miles 230 kV – 3,531 miles 345 kV – 6,620 miles 500 kV – 106 miles SPP.org 8 4

Independent System Operator (ISO) / Regional Transmission Organization (RTO) Map SPP.org 9 3 Interconnections / 8 NERC Regions SPP.org 10 5

SPP Mission Helping our members work together to keep the lights on – today and in the k th li ht t d d i th future. SPP.org 11 The SPP Difference • Relationship - Based p • Member - Driven • Independence Through Diversity • Evolutionary vs. Revolutionary • Reliability and Economics Inseparable SPP.org 12 6

SPP Milestones 1968: NERC Regional Council 1980: Telecommunications network 1991: Operating reserve sharing 1994: Incorporated as non-profit 1997: Security coordination 1998: Tariff administration 2001: Regional scheduling 2004: FERC-approved Regional Transmission Organization 2006: Contract Services 2007: Launched EIS market, NERC Regional Entity 2009: Nebraska utilities integrated as full members SPP.org 13 Grow th in Responsibilities SPP.org 14 7

SPP Expenses: 2001-2009 $/Mwh based on 12 CP Method * 2009 Operating Expenses reflect approved budgeted amount SPP.org 15 How does SPP impact you? Transmission typically represents 10% • of residential customer’s bill of residential customer s bill SPP cost = 30¢ of $100 residential bill • 2005 independent analysis by Charles River • Associates: � � $500,000 cost-benefit study $500,000 cost benefit study � On behalf of state regulatory commissions � 270% ROI for SPP services over the next 10 years SPP.org 16 8

SPP at a Glance • Little Rock based • 400+ employees • $114M operating budget (2009) • 24 x 7 operation p • Full redundancy and backup site SPP.org 17 IT Facts • Update 65,000+ data points every 10-30 seconds • Operations model solves 20 000 x 20 000 matrix Operations model solves 20,000 x 20,000 matrix every 2 minutes (6 minutes for contingencies) • 425 servers • 300 Terabytes of data storage • Systems availability goal of 99.98% • Fully redundant Internet and Wide Area Networks with maintained 100% availability • Operate two data centers SPP.org 18 9

Did You Know ? SPP’s 63,000 megawatts capacity resources • would power over 50 million homes. p In 2008, SPP members completed • 98 transmission projects totaling $325 million. SPP’s transmission owners spend over • $600 million annually to operate their electric transmission facilities. electric transmission facilities 47,000 miles of transmission lines • in SPP’s footprint would circle the earth - almost twice! SPP.org 19 Facilitation – Helping our members w ork together SPP.org 20 20 10

Regional State Committee • Retail Regulatory commissioners – Arkansas, Kansas, Missouri, Nebraska, New Mexico, , , , , Oklahoma, Texas � Louisiana maintains active observer status • Functions � Cost allocation � Ensure adequate supply � Ensure adequate supply � Market cost/benefit analyses SPP.org 21 Reliability Coordination As “Air Traffic Controllers,” our operators comply with… • Monitor grid 24 x 365 • Anticipate problems • Take preemptive action • Coordinate regional response • Independent …over 1,300 pages of reliability standards and criteria. SPP.org 22 11

Transmission Service As “Sales Agents,” we administer … Provides one-stop shopping • f for use of transmission lines f t i i li Consistent rates, terms, • conditions Regional focus • Independent I d d t • …a 1,621 page transmission tariff on behalf of our Process > 12,000 members and customers. • transactions/month SPP.org 23 Market Operation SPP’s Energy Market is like the “NYSE”… • Monitors resource / load balance load balance • Ensures economic dispatch while meeting system reliability • Provides settlement data …and follows over 200 pages of market protocols market protocols. • First year of spot market provided >$100 million in benefits to members � Annual $80 million expectation SPP.org 24 12

Compliance Enforcement and Standards Setting Enforce compliance with federal NERC Enforce compliance with federal NERC • reliability standards Create regional reliability standards • with stakeholder input Provide training and education to users, • owners, and operators of bulk power grid o ners and operators of b lk po er grid SPP.org 25 SPP Training World class regional restoration drills • NERC certifications • Train-the-trainer workshops • 2008 training program • awarded 12,116 continuing education hours continuing education hours SPP.org 26 13

SPP.org 27 Transmission Planning SPP.org 28 14

Current System SPP.org 29 Projects Constructed 2005-2008 SPP.org 30 15

Projects w ith Construction Commitments SPP.org 31 Balanced Portfolio Economic transmission upgrades (cost) to • lower generation production costs (benefit) lower generation production costs (benefit) Must balance costs and benefits in each zone • Transmission expansion costs shared • regionally (load ratio share) SPP.org 32 32 16

SPP.org 33 33 Extra High Voltage Study Looks to 2026 and beyond • Suggests overlaying SPP • footprint with 500 - 765 kV transmission Enhances access to all types • of generation, including renewables rene ables Long-range plan for • short-term decisions SPP.org 34 17

SPP.org 35 Wind Development Kansas, Oklahoma, Texas Panhandle, • New Mexico Nebraska New Mexico, Nebraska - wind “Saudi Arabia” � 50,000 – 100,000+ MW potential More wind than SPP’s uses during peak � 3,000 + MW wind in-service • � Over 51,000 MW in generation interconnection queue � Generation Interconnection Task Force working to improve process SPP.org 36 18

Advantages of harvesting “better” SPP w ind Many high density wind zones are located in the • western section of the SPP system Advantage of harvesting these wind zones over • the “next best” wind resources is significant � 30% capacity margin vs. 45% capacity margin � 50% more installed wind turbines required for the same wind potential in the 30% vs. 45% scenarios p Potential savings of harvesting more effective • wind over lower capacity wind in the footprint: Up to $10B SPP.org 37 Challenges w ith Wind Development Intermittent • � � M Must be supplemented with constant t b l t d ith t t sources Wind in remote areas • � Expensive new transmission needed “Not in my backyard” siting issues • Seams agreements • Renewable Electricity Standards (RES) • SPP.org 38 19

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