In 2009, OPPD joined the Southwest Power Pool (SPP) and became members of the ever-growing regional transmission organization (RTO), which spans from Texas to North Dakota and west to Montana.
As one of nine RTOs, Little Rock, Ark.,-based SPP manages the bulk electric grid, operates a wholesale market and plans transmission on behalf of its 95 utilities and transmission companies.
SPP covers a 546,000-square-mile territory in 14 states and is made up of a diverse group that includes investor-owned utilities, marketers, electric cooperatives, municipals, companies that own transmission, public power utilities and state and federal agencies.
The organization was formed in 1941 – when 11 companies pooled resources to guarantee the power kept flowing, uninterrupted, to Jones Mill outside Malvern, Ark. The mill was a critical producer of aluminum in support of the American war effort during World War II.
As an SPP member, OPPD has certain generation requirements it must uphold, said OPPD’s Joe Lang, Director of Compliance & RTO Policy. OPPD must be able to meet its peak load, plus 12 percent in available capacity, known as the planning reserve requirement.
Much like an air traffic controller, Lang said, SPP manages the power grid around the clock ensuring the grid’s safety and reliability when bad weather strikes and plants or transmission lines go down. The wholesale energy market is communicating with all of its power generators at least every four seconds, which makes it possible for OPPD and other members to sell their wholesale power to other power pool participants using the Integrated Marketplace. SPP also ensures the availability of economical and reliable energy to consumers.
Through its wholesale electricity market, SPP facilitates the selling and purchasing of electricity across its territory and boasts about $500 million in annual savings to its market participants. Last September, SPP announced its wholesale markets reduced the cost of electricity by more than $1 billion since 2014.
Another recent milestone was reached earlier this year, when SPP became the first RTO to get more than half of its real-time power from wind energy.
To help maintain the health and future viability of the grid, SPP also works with its members to plan transmission projects across the region. An example of one of those projects is the recently completed 180-mile, 345-kilovolt Midwest Transmission Project (MTP).
MTP was completed specifically to ease the north-south transmission congestion through an area of Nebraska and Missouri. The project was completed in December 2016.
A robust transmission system offers more continuous, reliable access to power around the SPP region for its members and non-members wishing to purchase electricity from within SPP. SPP membership allows OPPD to purchase renewable energy from wind facilities located inside the SPP footprint at no wheeling cost if SPP transmission capacity is available.
And for OPPD, membership in SPP helped the utility meet the needs of Facebook, who earlier this year announced it would be building a data center in Sarpy County, believed to be one of the largest investments in the state’s history.
“Through OPPDs membership in SPP and participating in the SPP Integrated Marketplace, OPPD is able to offer Rate 261M to customers taking high voltage transmission service,” Lang said. “This structure gives customers flexibility in how they meet their energy goals, while charging fair and reasonable rates that cover OPPD’s costs.”
SPP is working to ensure customers continue benefitting from lower-cost and more diverse sources of energy no matter where in the region it may be. Such benefits, along with planning for future generation and transmission needs, are the main attributes of belonging to an RTO, according to Michigan State University’s Kenneth Rose, who has more than 20 years of research experience in the structure, economics, and regulation of U.S. electricity markets.
“The primary benefit to an RTO is that it pools resources across a wide area,” Rose said. “With more generation resources to dispatch, this can lower the cost – assuming there are the transmission resources in place to do centralized dispatch across the region. Also, there can be administrative cost saving to having one party responsible for operating the regional system, instead of each utility having their own separate operation.”