New power ac­cord likely to be struck

Moun­tain states might join util­ity al­liance that stretches from North Dakota to Texas

The Denver Post - - BUSINESS - By Aldo Svaldi

Util­i­ties in the moun­tain states are edg­ing closer to join­ing forces with elec­tric­ity providers stretch­ing from North Dakota to north­ern Texas in a move that back­ers say could save Colorado house­holds $68 a year on av­er­age.

“From my per­spec­tive, it is highly likely,” South­west Power Pool pres­i­dent and CEO Nick Brown said of the high­landers join­ing forces with the low­lan­ders.

An in­for­mal al­liance of util­i­ties in the re­gion known as the Moun­tain West Trans­mis­sion Group, which in­cludes Xcel En­ergy Colorado, Black Hills En­ergy, and Tri-State Gen­er­a­tion & Trans­mis­sion, be­gan eval­u­at­ing whether to join the South­west Power Pool in Jan­uary.

A for­mal ap­pli­ca­tion is still pend­ing, but more signs are point­ing to­ward the moun­tain util­i­ties join­ing the SPP, a re­gional trans­mis­sion or­ga­ni­za­tion, or RTO, that han­dles the power grid in part or whole in 14 states.

“While we can only speak for Xcel En­ergy as one of seven util­ity ser­vices providers in the Moun­tain West Trans­mis­sion Group, we can state that we be­lieve we have made some pos­i­tive progress with SPP in our ef­forts to eval­u­ate if an RTO is right for our

cus­tomers in Colorado,” said Mark Stutz, a spokesman for the state’s largest util­ity.

A key ben­e­fit to join­ing an RTO is that it elim­i­nates the tar­iffs charged when power moves across ser­vice ter­ri­to­ries, said Brown, who was in Den­ver on Mon­day for a quar­terly board meet­ing with 200 stake­hold­ers of the non-profit as­so­ci­a­tion.

Mem­bers in the SPP also have ac­cess to a whole­sale power mar­ket where they can trade elec­tric­ity on a day-ahead or real-time ba­sis. That mar­ket would keep util­i­ties in the re­gion from hav­ing to turn on more ex­pen­sive gen­er­a­tion sources or man­u­ally call­ing up neigh­bors to buy power through bi­lat­eral con­tracts.

Au­to­ma­tion and at­tach­ing a mar­ket sig­nal helps with re­li­a­bil­ity, Brown said. Power can quickly be dis­patched to where it is needed most, re­duc­ing the like­li­hood of out­ages. And the more gen­er­a­tion sources a util­ity in Colorado or Wy­oming has to draw on, the less likely it will be gouged, or even worse, left short, in a pinch.

“Re­gional op­ti­miza­tion is what it is all about,” Brown said.

The SPP man­ages the trans­mis­sion grid in its ter­ri­tory and will make cap­i­tal in­vest­ments that pro­vide a re­turn for the net­work. For ev­ery dol­lar in­vested in grid im­prove­ments be­tween 2012 and 2014, the SPP es­ti­mates $3.50 in value for the net­work was gen­er­ated.

And be­cause about 15 per­cent of the gen­er­a­tion ca­pac­ity in the SPP’s re­gion is tied to wind, util­i­ties in the moun­tain re­gion could tap a large pool of re­new­able power. In the early morn­ing hours of Feb. 12, the SPP had a record 52.1 per­cent of the power on its sys­tem com­ing from wind.

Colorado house­holds could end up sav­ing $68 a year on their elec­tric­ity bills if util­i­ties in the state join the South­west Power Pool, said Mike Ross, se­nior vice pres­i­dent of govern­ment af­fairs.

But the ben­e­fits are not one sided. The SPP serves a pop­u­la­tion of about 17.5 mil­lion and could boost that by more than a third if it added Colorado and most of Wy­oming, along with sec­tions of Ari­zona, New Mex­ico, Ne­braska and other ter­ri­to­ries look­ing to join.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.