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Basin Electric board approves joining Southwest Power Pool

On July 16, Basin Electric Power Cooperative’s board of directors authorized the cooperative to join a regional transmission organization (RTO) – the Southwest Power Pool (SPP), subject to FERC approval of necessary documents. The decision reflects years of focused evaluation with Basin Electric’s members and its Integrated System (IS) partners, Western Area Power Administration and Heartland Consumers Power District.

Joining an RTO means Basin Electric and its members will have access to the market when Basin Electric’s system requires power or has surplus power to sell.

The board’s decision follows critical decisions by SPP and the boards of Basin Electric’s IS partners. On June 9, SPP’s board approved tariff changes making it possible for the Integrated System partners to join the RTO. Heartland’s board approved SPP membership July 8 and Western’s administrator approved SPP membership July 9.

Membership in SPP will not happen right away. Basin Electric staff will continue to work with its members, Western and Heartland to integrate into SPP by Oct. 1, 2015.

Membership in SPP was among three options Basin Electric and its partners collectively considered. The other options were standing alone outside its neighboring RTOs or membership in the Midcontinent Independent System Operator (MISO).

“Standing alone posed challenges for us all when we needed access to markets in times of surplus or deficit power supplies,” says Paul Sukut, Basin Electric CEO and general manager. “We determined we cannot remain an island within our nation’s energy infrastructure. These limitations directed our focus to RTO membership.

“Ultimately, we needed to balance the needs of our members – from cost, transmission, market, philosophical and geographic standpoints. SPP satisfied those criteria,” Sukut said.

About Basin Electric Power Cooperative

Basin Electric is a consumer-owned, regional cooperative headquartered in Bismarck, N.D. It generates and transmits electricity to 137 member rural electric systems in nine states: Colorado, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, South Dakota, and Wyoming. These member systems distribute electricity to about 2.8 million consumers.

About the IS

The IS is the backbone of the high-voltage transmission grid in the Upper Great Plains region of eastern Montana, North Dakota and South Dakota. This jointly developed transmission system evolved from the 1962 Joint Transmission System (JTS) agreement of the Bureau of Reclamation with Basin Electric and 103 cooperative and municipal preference customers in this region.

FERC

Norman Bay nominated to head of FERC

On Tuesday the Senate confirmed the nominations of Norman C. Bay to be a commissioner of the Federal Energy Regulatory Commission, and of Cheryl LaFleur to a second term as a commissioner. Senate Energy and Natural Resources Committee Chair Mary Landrieu, D-La., said an agreement had been reached to allow LaFleur to continue to serve as acting chair for nine months, after which President Obama would name Bay as chairman.

Norman Bay. Courtesy FERC

Norman Bay. Courtesy FERC

Bay will fill out former Chairman Jon Wellinghoff’s term ending June 30, 2018. LaFleur was confirmed to a five-year term expiring June 30, 2019.

Bay has headed FERC’s Office of Enforcement since 2009. Prior to joining the commission, he worked as a law professor at the University of New Mexico from 2002 to 2009. From 2000 to 2001, Mr. Bay was the United States Attorney for the District of New Mexico, and an Assistant U.S. Attorney from 1989 to 2000. He earned a B.A. from Dartmouth College and a J.D. from Harvard Law School.

Prior to joining the commission in 2010, LaFleur had more than 20 years’ experience in the electric and natural gas industry. She served as executive vice president and acting CEO of National Grid USA. Her previous positions at National Grid USA and its predecessor New England Electric System included chief operating officer, president of the New England distribution companies and general counsel. She began her career as a lawyer at Ropes and Gray in Boston. She has a J.D. from Harvard Law School, where she was an editor of the Harvard Law Review, and an A.B. from Princeton University.

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Heartland approves membership into Southwest Power Pool

Heartland Consumers Power District is one step closer to full integration into a Regional Transmission Organization (RTO). The Heartland board of directors recently approved a resolution authorizing execution of a membership agreement with Southwest Power Pool (SPP).

“Joining an RTO is a major shift in the way Heartland has traditionally operated, but we firmly believe our customers will benefit,” said Heartland CEO Russell Olson. “We look forward to working with the SPP staff and members as we continue the transition.”

Heartland delivers power to its customers over the Integrated System (IS), a high-voltage transmission system that covers a seven-state area and consists of over 9,500 miles of line. Under the terms of the membership agreement, functional control and operational authority of Heartland’s transmission facilities and service within the IS will be turned over to the SPP, and generation resources and customer load will be included within the SPP Integrated Marketplace. Heartland’s participation is contingent upon Federal Energy Regulatory Commission acceptance and approval of the agreement without modifications.

Heartland shares ownership of the IS with Basin Electric Power Cooperative (Basin) and Western Area Power Administration – Upper Great Plains (Western). The three organizations began evaluating a move into an RTO in late 2011 in order to increase access to other power markets and to reduce operating constraints. After an extensive research and assessment period, SPP was determined to be the best business decision to reduce costs and maximize opportunity.

Basin’s board took action in April to negotiate terms and conditions of joining SPP, and approval of the membership agreement is expected this month. Western Administrator Mark Gabriel approved and directed full membership of the Upper Great Plains Region with SPP July 9.

Founded in 1941, SPP is a group of 76 members in Arkansas, Kansas, Louisiana, Mississippi, Missouri, Nebraska, New Mexico, Oklahoma, and Texas that serve more than 15 million customers. Membership is comprised of investor-owned utilities, municipal systems, generation and transmission cooperatives, state authorities, wholesale generators, power marketers, and independent transmission companies. SPP’s footprint includes 48,930 miles of transmission lines and 370,000 square miles of service territory. As a Regional Transmission Organization, SPP ensures reliable supplies of power, adequate transmission infrastructure, and competitive wholesale electricity prices.

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Gallery

Heartland hosts 2014 Summer Conference

On Wednesday, July 9, Heartland hosted its annual Summer Conference and Invitational at the Lakes Restaurant and Golf Course on Lake Madison. This year’s event featured guest speaker Janet Ady, president and CEO of Ady Voltedge, an economic development consulting firm in Madison, Wisconsin.

Entitled the Secrets of Success for Economic Development, Ady’s presentation included discussions on the site selection process, identifying your community’s competitive positioning and the rural economic development toolbox. The event also featured a recap of Heartland’s economic development and energy efficiency programs as well as a discussion on the repercussions of the Environmental Protection Agency’s proposed clean air guidelines for existing power plants under the Clean Power Plan.

Following the presentations and lunch, attendees were treated to a scenic boat tour of Lake Madison or opted to participate in a 9-hole golf tournament. The event drew nearly 90 participants, including representatives from twelve customer communities and various state offices and entities. Several state legislators and field representatives from the offices of South Dakota’s U.S. legislators were also in attendance.

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Western administrator approves RTO membership

Upper Great Plains Region approved to join Southwest Power Pool 

Western’s Administrator Mark Gabriel yesterday approved and directed Western’s Upper Great Plains Region to take the necessary actions to accomplish full membership with the Southwest Power Pool.

Western Administrator Mark Gabriel signs the memo approving and directing the Upper Great Plains Region to join Southwest Power Pool. Courtesy Western UGP.

In signing the decision Gabriel said, “Western manages our assets, $4 billion strong, to ensure they are deployed wisely for our customers and for the nation to keep the power flowing safely and reliably to more than 40 million Americans. Effectively managing our resources is central to our success. Our comprehensive and rigorous Alternative Operations Study showed joining the Southwest Power Pool supports our Mission to market and deliver clean, renewable, reliable, cost-based federal hydroelectric power and related services yielding significant economic benefits under the unique circumstances in the Upper Great Plains. This business-based decision is in concert with our Vision and our Strategic Roadmap 2024, helping us keep costs low and efficiently serving our customers in the Upper Great Plains Region. We are extremely pleased with the process, spirit of cooperation and consideration by all of the SPP staff and members in helping us make this decision.”

Western’s Upper Great Plains Regional Manager Robert Harris added, “Due to the unique marketing and transmission footprint and the growth of organized markets around Western’s Upper Great Plains Region, we have faced increasing constraints and costs to reliably deliver low-cost, cost-based, hydro power to our firm power customers. We particularly appreciate the involvement and support of our customers in the process to reach this decision as well as the significant work by SPP, its members, committees and staff. SPP’s dedication and tenacity to find solutions benefiting all members is apparent.  We look forward to being full and active participants in SPP.”

The approval is contingent upon Federal Energy Regulatory Commission approval of the SPP tariff changes without significant modification to the negotiated provisions that allow Western to ensure compliance with statutory and regulatory requirements and continue to provide reliable, cost-based hydropower to its customers consistent with sound business principles. SPP’s tariff changes are expected to be filed in early August. Implementation will begin on a concurrent track, with full membership anticipated by October 2015.

The Upper Great Plains Region markets Pick-Sloan Missouri Basin—Eastern Division power and energy to preference customers in Montana east of the Continental Divide, North Dakota, South Dakota, western Minnesota and Iowa and eastern Nebraska. Western operates the Integrated Transmission System, which is owned by Western, Basin Electric Power Cooperative, and Heartland Consumers Power District.

The Upper Great Plains Region and the other IS owners have studied several forms of potential regional transmission organization participation since the 1990s. Beginning in 2001, the IS participants began to evaluate potential options of joining SPP, joining the Midcontinent Independent System Operator, or continuing operations on a stand-alone basis. These studies identified the option to join SPP as having the most benefit and the least risk.

Learn more about the decision at www.wapa.gov/ugp/powermarketing/AlternateOperationsStudy/AOS.htm or contact Randy Wilkerson, PublicAffairs@wapa.gov.