On March 13, the Southwest Power Pool (SPP) approved a set of terms and conditions that will govern the Mountain West Transmission Group's pending membership in SPP.
Specifically, 18 policies were adopted addressing terms of SPP membership in areas including: governance; DC ties between the systems; transmission planning and resource adequacy; and rates and revenue. These policies are the result of work that has been taking place since January 2017, when the Mountain West Transmission Group formally announced it was exploring membership in SPP.
The policies likely address some of the difficult issues that the two groups have been working on and represent another step forward toward integration of the Mountain West group into SPP. If the process continues in this direction, SPP currently anticipates "full integration of Mountain West" in early 2020. This timeframe reflects necessary FERC and state regulatory commission approvals that will likely be required. The incentive to clear the regulatory hurdles appears strong, however. According to SPP, its current members could receive more than $500 million in net benefits during the first 10 years of mountain West's membership.
This recent development in the SPP/Mountain West process indicates it is increasingly likely that the Mountain West states will soon be participating in a competitive wholesale electricity market trough SPP. Such a change will be a significant departure from the status quo and will represent a shift away from the traditional regulation by state utility commissions in the region.
SPP hosted a webinar on March 22 to further address the policies adopted on March 13.
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