On September 20, 2012, the Federal Energy Regulatory Commission
(FERC) issued an order conditionally accepting a proposal by
Southwest Power Pool, Inc. (SPP) to begin systematic and automated
curtailments of Non-Dispatchable Resources, including electric
generation from wind and solar resources, during periods of
congestion. The order is designed to address the substantial
increases in Non-Dispatchable Resources that have been experienced
since the inception of the Energy Imbalance Service (EIS) market,
as well as projections that an additional 4,000 MW of
Non-Dispatchable Resources will be added to SPP's system over
the next three years. Under the new market rules,
Non-Dispatchable Resources will be curtailed in SPP's EIS
market based on their existing transmission service priority.
That priority is based on whether the Non-Dispatchable Resource is
(i) scheduling against a transmission reservation, (ii) a
Qualifying Facility (QF) exercising its rights under the Public
Utility Regulatory Policies Act (PURPA) to deliver its net output
to its host utility, or (iii) using unscheduled service.
Security-constrained economic dispatch is to be exhausted before
any Non-Dispatchable Resources are curtailed.
QF output sold under PURPA will be curtailed proportionately and
on a basis equivalent to firm service. In other words, such
output will be curtailed only during a North American Electric
Reliability Corporation Transmission Loading Relief (TLR) level 5
event or activation of a constraint in SPP's Market Operating
System (MOS), and only after all other lower-priority service has
been curtailed to relieve congestion. QFs will not be subject
to Uninstructed Deviation Charges if they do not participate in the
EIS Market (these are QFs that exercised their rights under PURPA
to deliver all of their net output to their host utilities and that
did not register in the EIS Market but instead were involuntarily
registered by SPP). All other output from Non-Dispatchable
Resources will be subject to Uninstructed Deviation Charges if such
Non-Dispatchable Resources fail to comply with curtailment
The new automated curtailment rules will become effective
October 15, 2012 for all Non-Dispatchable Resources that become
commercially operable on or after that date. For
Non-Dispatchable Resources operable before that date, SPP is
required to undertake a further stakeholder process in order to
develop a revised proposal that must be filed with FERC and will
become effective on September 20, 2013. This difference in
treatment stems from FERC's findings that (i) SPP failed to
justify applying its proposal to existing Non-Dispatchable
Resources, (ii) until now, manual curtailment instructions have
typically been issued only to the Non-Dispatchable Resource making
the largest contribution to a constraint, not to all
Non-Dispatchable Resources, and (iii) there may be older
Non-Dispatchable Resources that are unable to comply with the new
FERC further requires SPP to modify its tariff to provide that
Non-Dispatchable Resources with point-to-point transmission service
rights receive a TLR level 5 curtailment priority up to the amount
of firm transmission service reserved. In addition, SPP must
modify the tariff to clarify that Non-Dispatchable Resources that
are designated network resources will receive such priority up to
the level of output designated for such Non-Dispatchable Resources,
provided that the aggregate generation from designated network
resources for a particular network load does not exceed the
associated network load plus losses.
The order rejects calls to require SPP to implement 15-minute
scheduling or "closer to real-time adjustments" to
scheduling, noting that FERC Order No. 764 gives Regional
Transmission Organizations until June 22, 2013 to implement
15-minute scheduling capability. The order does, however,
direct SPP to address in its compliance filing how its treatment of
both existing and new Non-Dispatchable Resources will work within
the Integrated Marketplace proposed by SPP in FERC Docket No.
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