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.

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.

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.

SPP Board approves changes to facilitate Integrated System membership

Southwest Power Pool, Inc. (SPP) announced yesterday board approval of changes to accommodate the Integrated System’s (IS) membership in SPP. Heartland Consumers Power District (Heartland), Basin Electric Power Cooperative (Basin) and Western Area Power Administration – Upper Great Plains (Western) jointly own the IS, the backbone of the high-voltage transmission grid in the Upper Great Plains region of eastern Montana, North Dakota and South Dakota. The board’s decision is an important first step towards the IS’ full integration into an regional transmission organization.

“These tariff changes will enable all the IS entities to join an RTO,” said SPP CEO Carl Monroe. “We are pleased that our culture and value to our members can provide benefits to our customers.”

Heartland, Basin and Western have been discussing the possibility of joining an RTO since late 2011 to increase options for buying and selling power. Following assessments and research, it was determined SPP was the best option to maximize opportunity.

In April, Basin’s board gave the cooperative’s management authorization to support Western in their federal process to join SPP and to negotiate terms and conditions of joining with SPP as a transmission owning member.

UGP Regional Manager Robert Harris said the action by the SPP board represents a major step toward Western’s full membership in SPP.

“It is the result of significant work by SPP, its members, committee and staff as well as Western,” Harris said. “We continue to be very impressed with SPP’s dedication and tenacity, working together to find solutions benefiting all members and look forward to being active participants in the SPP.”

According to Basin CEO and General Manager Paul Sukut, the next step in the process is Basin board action in July.

“Integrating with an RTO presents many complexities, but Basin and our entire member cooperative family are committed to working with our IS participants and SPP to facilitate this transition,” Sukut said.

Joining an RTO is a major shift in the way the IS members have traditionally done business, but all organizations involved firmly believe both the SPP members and the IS owners will benefit from the effort.

“The IS owners have been working on this effort for some time and we’re pleased the board endorsed the proposed changes as it is an important first step,” said Heartland CEO Russell Olson. “The SPP staff and membership have been a pleasure to work with. The open and collaborative process has reinforced an earlier decision to seek membership in SPP and we look forward to continuing our integration into SPP for the benefit of our customers.”

About Southwest Power Pool:

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. The SPP Regional Entity oversees compliance enforcement and reliability standards development.

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Heartland’s 2014 Annual Meeting