Join us November 27, 2013 for a complimentary webinar about the upcoming changes to the Southwest Power Pool market. The ZEMA Suite has helped other ISO market participants meet similar challenges before, including when ERCOT transitioned to ERCOT Nodal, and is well-prepared for the new data, analytic and integration problems that market participants will be facing with the new SPP market changes.

The Southwest Power Pool (SPP)

The SPP was created in 1941, uniting 11 power companies to keep plants running in order to meet war-time demands (SPP). Currently, the SPP acts as a Regional Transmission Organization, which feeds a region across 9 states that consumes 230 TWh of electricity per year. In 2012, “transmission and wholesale market transactions totaled $2.3 billion” (SPP).

Starting in March 2014, the SPP will be switching from a real-time based Energy Imbalance System to an Integrated Marketplace, designed to generate approximately $100 million per year in savings while maintaining the reliability and security of transmission operations (SPP). The new Integrated Marketplace will introduce a number of elements to the system, including:

  • a Day Ahead Market
  • Transmission Congestion Rights
  • a single, centralized Balancing Authority

To better understand these changes, let’s take a look at each in turn.

Day Ahead Market

Right now, the SPP matches energy demands with offers to supply energy in a real-time balancing market, resulting in potential price and allocation inefficiencies. The Day Ahead market will provide the same function, but determined for the following day, and will commit participants to pay (or accept) the market-clearing price for the energy they have demanded (or offered). This will promote “additional price assurance capability prior to real-time” (SPP), and eliminate the inadequacies of the current system.

Transmission Congestion Rights (TCRs)

Along with the Day Ahead market, Transmission Congestion Rights (TCRs) will be introduced in the new SPP marketplace. TCRs are financial instruments designed to hedge against the costs of congestion by entitling the owner to revenue or charges when the transmission system is oversold on the Day Ahead market (SPP). These rights can be acquired by converting Auction Revenue Rights (ARRs) in an annual process, by purchasing them during the TCR Auction or by purchasing them directly from another TCR holder.

Central Balancing Authority

Finally, the SPP will be consolidating the 16 balancing authorities that presently make up the market to a single, centralized authority. This body “will balance the region’s supply and demand, maintain frequency, and maintain electricity flows between adjacent BAs” and will “facilitate centralized unit commitment”, thereby reducing costs (SPP).

Figure 1: Map taken from the SPP website, showing the 16 Balancing Authorities to be centralized.

Each of these market changes generates a complex set of challenges for managing data. For example, since the SPP will continue operating the real-time market, the addition of a Day Ahead market with TCRs will drastically increase and complicate the amount of information being generated, processed, and stored. With such a wide range of data from so many different sources, capturing and normalizing the data is difficult and costly.

However, the ZEMA Suite is prepared to meet the SPP market changes head on. ZEMA already has the tools needed to automate the collection of SPP’s public and behind certificate data, as well as the facility to normalize and validate the information, thereby reducing our clients’ dependence on time-consuming manual data collection. ZEMA is capable of generating data analyses and forecasts that can be easily integrated with any downstream systems used for further assessment.

Be sure to register for our upcoming webinar to learn how ZEMA will help you prepare for the changes coming to SPP.