Southwest Power Pool

Southwest Power Pool (SPP) is a nonprofit regional transmission organization (RTO) that operates the electric grid and manages the wholesale power market for the central United States. Founded in 1941 as a tight power pool by 11 regional utilities, it has grown to serve all or parts of 14 states, including Arkansas, Iowa, Kansas, Louisiana, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas, and Wyoming.

History

The Southwest Power Pool was formed during World War II to meet the increased demand for electricity, particularly for aluminum production in support of the war effort. In 1941, the Defense Plant Corporation opened a plant in Jones Mill, Arkansas, requiring more electricity than the state could provide at the time. In response, regional power utilities agreed to pool their generation resources to ensure reliability. Post-war, the executives recognized the efficiency and expertise developed through this collaboration and chose to maintain the power pool.

Over time, SPP implemented several significant changes and improvements:

• 1968: Became a NERC Regional Council.
• 1980: Implemented a telecommunications network.
• 1991: Introduced operating reserve sharing.
• 1994: Incorporated as a nonprofit corporation.
• 1997: Implemented reliability coordination.
• 1998: Began administrators of tariffs.
• 2004: Approved as a Regional Transmission Organization by the Federal Energy Regulatory Commission (FERC).
• 2007: Launched the Energy Imbalance Service (EIS) market and became a FERC-approved Regional Entity.
• 2014: Introduced its Integrated Marketplace, which includes a day-ahead energy market, real-time energy market, operating reserve market, and transmission congestion rights.
• 2015: Expanded its service area by integrating new members such as the Western Area Power Administration – Upper Great Plains (WAPA-UGP), Basin Electric Power Cooperative, and Heartlands Consumer Power District.
• 2021: Established the Western Energy Imbalance Service (WEIS) to extend real-time market access to additional utilities in the Western U.S.

Operations and Services

SPP functions as an independent system operator (ISO), managing over 72,884 miles of high-voltage transmission lines. It operates a competitive wholesale electricity market to ensure reliable power supplies and adequate transmission infrastructure across its territory. SPP's services include:

Reliability Coordination: SPP monitors power flow and coordinates regional responses during emergencies.

• Tariff Administration: Provides consistent rates and terms for transmission services.
• Regional Scheduling: Ensures that the power sent matches the power received.
• Transmission Expansion: Plans and tracks transmission upgrades to address system limitations.
• Market Operations: Offers a day-ahead market and real-time balancing market for efficient energy dispatch.
• Ancillary Services: Procures supplemental, spinning, and regulation reserves to maintain power quality and grid stability.

Membership and Territory

As of 2023, SPP has 110 members, including investor-owned utilities, municipal systems, generation and transmission cooperatives, state authorities, independent power producers, and power marketers. The organization also provides energy services in the Western Interconnection, covering parts of Arizona, Colorado, Montana, New Mexico, Utah, Wyoming, and the Canadian province of British Columbia.

Energy Mix

SPP's generation mix is diverse, with significant contributions from natural gas, coal, wind, hydro, nuclear, and solar. As of 2024, wind energy accounted for approximately 38% of its production, followed by natural gas at about 28.4%, and coal at 24.7%.

Impact

SPP's operations are designed to maintain a reliable and efficient power grid while promoting competitive wholesale electricity prices. Its Integrated Marketplace provides annual net savings to participants, contributing to the overall stability of the energy market in its region.