Southwest Power Pool
The Southwest Power Pool (SPP) is the founding member of the North American Electric Reliability Corporation (NERC). Its headquarters are in Little Rock, Arkansas. The market lies on the western most edge of the Eastern Interconnection. Most of its wind generation lies on the western edge of the footprint, while most of the major load centers lie on the eastern edge, creating a dynamic wherein power frequently flows west to east. Furthermore, its vast latitude enables wide temperature gradients and often contributes to significant north to south or south to north flows, depending on the season.
Because SPP relies on wind for such a large amount of its generation, price spikes and scarcity pricing are frequently seen due to ramp shortages caused by rapid, unexpected changes in demand-net-wind. As wind across the footprint continues to grow, so does the forecast error. This results in a quite volatile market.
SPP's story began in the early days of WWII, when America was furiously ramping up production of weapons and military supplies. After entering the War, the USA had an immediate and crucial need to produce aluminum for aircraft manufacture. Alcoa and Reynolds Metals Company established themselves in Arkansas, which had the largest commercially exploitable bauxite deposit at that time. In 1941, government agency Defense Plant Corporation opened a plant in Jones Mill, Arkansas, with the intent of operating 24/7 to supply the war effort. The government leased the plant to Alcoa for operations. The Jones Mill Plant alone required 120,000 kilowatts (kW) of electrical power to operate; this exceeded the state's entire generation (100,000 kW at peak, excluding outages). Due to the war effort, there was not enough manpower nor raw materials to build further electrical generation. Executives of Southwest power utilities decided to pool their generation resources together to ensure the region's reliability and dependability during the wartime. The existence of Southwest Power Pool was out of necessity and scarcity. After the war, executives saw the expertise and efficiency that was created and decided to remain a power pool.
Southwest Power Pool was formed Dec. 14, 1941, with 11 regional utilities entering into an inter-company agreement. The 11 companies were: Arkansas Power & Light, Louisiana Power & Light, and Mississippi Power & Light (subsidiaries of Entergy), Southwestern Gas and Electric and Public Service Company of Oklahoma (now subsidiaries of American Electric Power), Nebraska Power, Texas Power & Light, Southern Light and Power, Oklahoma Gas and Electric, Kansas Gas and Electric, and Empire District Electric.
Members and company status
SPP was incorporated as a nonprofit corporation in 1994, and was approved as a Regional Transmission Organization (RTO) by the Federal Energy Regulatory Commission (FERC) in 2004. SPP is one of nine regional electric reliability councils under North American Electric Reliability Corporation (NERC) authority. NERC and the regional reliability councils were formed following the Northeast Blackout of 1965. SPP's mission statement is "Helping our members work together to keep the lights on...today and in the future." SPP is headquartered in Little Rock, Arkansas.
The SPP region lies within the Eastern Interconnection, in the central Southern United States, serving all of the states of Kansas and Oklahoma, and portions of New Mexico, Texas, Arkansas, Louisiana, Missouri, South Dakota, North Dakota, Montana, Minnesota, Iowa, Wyoming, and Nebraska. SPP members include investor-owned utilities, municipal systems, generation and transmission cooperatives, state authorities, independent power producers, and power marketers. SPP has many of the high voltage direct current (DC) ties which connect the Eastern interconnection to the Western Interconnection and both of the DC ties to ERCOT Texas Interconnection.
SPP has roughly 67,000 miles of transmission lines. Its all time peak load was 50,622 MW in the summer of 2016 and its nameplate generating capacity is 89,999 MW as of January 1, 2019. SPP sources most of its power from coal, with wind and natural gas coming in second and third, respectively. The Southwest Power Pool also has the highest wind penetration of any ISO, with a wind penetration record of 66.5% on April 21, 2019. This significantly higher than ERCOT's wind penetration record (54%).
- FERC Market Oversight
- FERC. "FERC Market Oversight". FERC. Retrieved 2009-01-12.