Mountain West electricity providers explore RTO options
Mountain West Transmission Group to open discussions on possible membership; expanded electricity market may improve reliability and create savings
DENVER (January 6, 2017) – Ten electricity service providers representing nearly 6.4 million customers primarily in the U.S. Rocky Mountain Region announced plans today to explore potential participation with an existing regional transmission organization (RTO). These providers could expand their electricity market operations if benefits can be realized.
The informal group, known as the Mountain West Transmission Group, began discussions in 2013 to evaluate a suite of options ranging from a common transmission tariff to RTO participation. Today, the group intends to commence discussions with the Southwest Power Pool (SPP) as the next step in exploring potential membership with a particular RTO. In the event these discussions with SPP are unsuccessful, however, the participants may pursue similar discussions with either the Midcontinent Independent System Operator (MISO), PJM Interconnection, or both.
“We are leveraging our collective strength through this mutually beneficial collaboration to increase flexibility,” said Mark A. Gabriel, Administrator and CEO of Western Area Power Administration. “Participating in Mountain West is part of WAPA’s evolution of mission-critical customer service in the ever-changing energy industry.”
Stuart Wevik, Group VP of Electric Utilities at Black Hills Energy said: “The development of a wholesale energy market presents opportunities to reduce costs and increase reliability. We will continue to evaluate these two pillars in the next phase of analysis to ensure that we continue to deliver safe, reliable and cost effective energy to our customers.”
“Participation in a regional market can provide operational efficiencies through economies of scale and increased opportunities to bring renewables into our system,” said Jason Frisbie, General Manager and CEO, Platte River Power Authority. “These advantages would enable us to add additional value for our member owners by increasing our ability to deliver reliable, cost-effective and environmentally-responsible energy.”
“Colorado Springs Utilities is looking forward to evaluating whether participation in an RTO is a good fit for the future our community,” said John Romero, general manager of Energy Acquisition, Engineering and Planning.
“This agreement marks an important step forward in our mission to deliver reliable, low-cost power and services to our members,” said Paul Sukut, Basin Electric CEO and general manager. “Leveraging the assets and strength of others in the region will facilitate enhanced service and increased capabilities for our members. Like our decision to join SPP for our east-side power supply, this announcement reflects years of diligent work and analysis by our employees and the Mountain West team. We’re committed to working with the participants and look forward to continued analysis for the betterment of our membership.
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Mountain West Transmission Group
“As Tri-State evaluates how an organized market could benefit its member systems, working together to explore RTO membership is a positive step in assessing the association’s needs and future direction,” said Joel Bladow, Tri-State Generation and Transmission Association senior vice president of transmission.
“This is a crucial step in evaluating the potential benefits of a regional energy market for the Mountain West,” said Steve Beuning, Xcel Energy director for Market Operations.
The decision to evaluate membership in an existing RTO follows substantial Mountain West analysis. Mountain West would bring a combined 15,700 miles of transmission line to an existing RTO. The group has performed a transmission cost study; a projected market benefits study; and an evaluation of proposals provided by four existing independent system operators, including SPP, MISO, the California Independent System Operator and PJM.
Subject to stakeholder input and appropriate approvals, Mountain West expects to make a decision in mid-2017 and, if applicable, reach market implementation by early 2019. While Mountain West is optimistic that an RTO may benefit its entire membership, each Mountain West participant will ultimately need to evaluate for itself whether potential membership makes sense.
About the Mountain West Transmission Group
Participants in the Mountain West Transmission Group include:
- Basin Electric Power Cooperative (BEPC), based in Bismarck, N.D.;
- Black Hills Energy’s three electric utilities in Colorado, South Dakota and Wyoming, subsidiaries of the Rapid City-based Black Hills Corp
- Colorado Springs Utilities (CSU);
- Platte River Power Authority (PRPA), based in Fort Collins, Colo.;
- Public Service Co. of Colorado (PSCo), an operating company of Xcel Energy based in Denver;
- Tri-State Generation and Transmission Association (Tri-State), based in Westminster, Colo.; and
- Western Area Power Administration (WAPA)’s Loveland Area Projects (LAP) and Colorado River Storage (CRSP) Project.
The Mountain West participants are exploring if joining an RTO would result in the anticipated level of benefits. RTO benefits may include optimized use of existing generation and transmission assets through an expanded electricity market; improved grid access; continued improved grid reliability services; and improved generation and transmission planning across multiple states and systems. By exploring membership with an existing RTO, the Mountain West participants would have the advantage of an existing electricity market design.
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