In 2004, the Southwest Power Pool (SPP) was created. This organization oversees multiple markets and services within the wholesale electricity industry, often referred to colloquially as the SPP market or SPP energy market (though it’s not a market itself).
The markets and services SPP oversees include:
- Regional Transmission Organizations (RTOs) services in the Eastern Interconnection through the SPP Integrated Marketplace (SPPIM)
- Western Reliability Coordinator
- Western Energy Imbalance Services (WEIS) for the far eastern side of the Western Interconnection
- Technology services to support the Western Power Pool’s (WPP) Western Resource Adequacy Program (WRAP)
- Two additional services working their way through stakeholder initiatives (RTO Expansion, also called RTO West, and Markets+)
SPP is a non-profit enterprise that defines their mission to be “Working together to responsibly and economically keep the lights on today and in the future.”
In this blog post, we’ll explore how the various SPP services work and what makes SPP different from other RTOs/ISOs, providing insights into its unique approach to capacity management and the potential benefits it offers to utilities and energy companies.
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SPP territory
With a service territory spanning more than 552,000 square miles, SPP operates across a vast region that significantly impacts the energy dynamics of the areas it serves. Understanding the scope of SPP’s territory helps contextualize the scale and importance of its operations.
An overview of the SPP integrated market
With a service territory spanning more than 552,000 square miles, SPP schedules power generation at 949 generation plants, manages more than 72,000 miles of transmission lines, and plans new transmission infrastructure in parts of 14 states in the Eastern Interconnection, one of the largest power grids in North America that spans the eastern half of the United States and Canada.
SPP also provides services for utilities in 23 states and Canadian provinces within the Western Interconnection, a major power grid that covers the western half of the United States and Canada. These services include RTO West, the Western Energy Imbalance Service (WEIS), the Western Reliability Coordinator, and the Western Resource Adequacy Program (WRAP).
Figure 1: SPP Service Territory. Source: SPP
SPP Integrated Marketplace (SPPIM), or ‘SPP Marketplace’
SPP takes a unique approach to managing capacity within its Eastern Interconnection footprint — unlike other RTOs, it does not operate a traditional capacity market. Rather than requiring utilities and electricity suppliers to purchase adequate capacity to meet demand (plus maintain a reserve margin), SPP has established what it calls the Integrated Marketplace, also called the “SPP Marketplace,” to meet capacity needs more dynamically.
In 2007, SPP launched its Energy Imbalance Service (EIS) market, which was designed to provide energy companies within its footprint a real-time market for least-cost power. In 2014, EIS was replaced with the more robust Integrated Marketplace, which includes EIS’ Real-Time market as well as a Day-Ahead market with transmission congestion rights and a reliability unit commitment process. It also incorporates price-based operating reserve procurement. SPPIM also consolidated many balancing authorities into a single Balancing Authority (BA), officially designated as SWPP — the Southwest Power Pool
SPP reports that the Integrated Marketplace saves participants more than $740 million each year.
Western Energy Imbalance Services (WEIS)
In February 2021, SPP introduced the Western Energy Imbalance Service (WEIS), a real-time market designed for entities outside its regional transmission organization, particularly on the eastern side of the western interconnect. WEIS streamlines the energy imbalance process by simplifying submissions and focusing on economic bids, ancillary service plans, commitment plans, and non-conforming load forecasts. This market aims to enhance renewable energy utilization and facilitate transfers between areas. Unlike WEIM, WEIS is set to be replaced by SPP’s next market iteration, such as Markets+ or RTO West, once they are operational. Another significant difference in the WEIS when compared to the WEIM, there are no base schedules in WEIS. Instead, an advanced after the fact process, Native Load Hedging, is utilized to determine the imbalance energy settlements.
Read more in, “A Look Ahead: The Future of the West Markets.”
Western Resource Adequacy Program (WRAP)
The Western Resource Adequacy Program (WRAP) aims to ensure the reliability of the western U.S. grid by optimizing resource adequacy and providing access to shared resources. Operated by SPP and governed by the Western Power Pool (WPP), WRAP uses transmission availability and market hubs to match entities with resource deficiencies to those with excess capacity. It includes two programs: the Forward Showing Program, which provides a seasonal view of capacity, and the Ops Program, which updates data closer to the operational day for better accuracy. WRAP’s independent data clearinghouse allows for regional collaboration while maintaining data confidentiality.
Read more in “The Role of WRAP in the Western Grid: A Game Changer for Sustainable Energy.”
RTO West
RTO West is an upcoming initiative by SPP aimed at enhancing coordination across Western electricity markets. It is designed to provide day-ahead and real-time market services to improve reliability and integrate renewable resources more efficiently. RTO West is expected to replace the WEIS market upon its completion (consolidating balancing authorities into a new Western SPP Balancing authority), streamlining operations and further supporting the transition to a sustainable energy grid. The project is still in development, with details and timelines being finalized. The general approach for RTOW is to mirror the SPPIM tariff, protocols, and technology with the absolute minimum changes necessary. SPP filed the RTOW tariff updates with FERC on June 4, 2024.
Read more in “A Look Ahead: The Future of the West Markets.”
SPP Markets Plus
SPP’s Markets +, or SPP Markets+, builds on the framework the organization established in 2021 with the launch of the Western Energy Imbalance Service (WEIS), a real-time energy imbalance market that’s open to entities outside of SPP’s service territory. Markets Plus would centralize day-ahead and real-time commitment and dispatch, enabling more reliable integration of renewable generation resources across the western regions of the SPP network.
Figure 2: Markets Plus Phase One Source: SPP
Markets Plus will be rolled out in two phases. In phase one, the 38 potential participants and stakeholders made financial commitments and began to establish the market protocols, tariff, and governing documents. In phase two, which will begin once FERC approves the Market Plus tariff, SPP will acquire the necessary infrastructure and participants will be integrated into the system. SPP filed the Markets Plus tariff with FERC on March 29, 2024.
The Markets Plus initiative is expected to play a crucial role in managing the electric grid and ensuring a reliable and efficient electricity supply across a vast region of the country. Because it will enable further integration of renewable energy resources, it will also aid in decarbonizing the electric grid. It is expected to go live in early 2027.
Read more in “SPP Goes Big: Markets+ & RTO West Promise to Reshape Western Grid.”
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