Addition of area utilities expands power pool

LITTLE ROCK, Arkansas – The addition on April 1 of Xcel Energy-Colorado, the Platte River Power Authority and Black Hills Colorado Electric LLC, the Western Energy Imbalance Service Market run by the Little Rock-based Southwest Power Pool has more than doubled in size, according to a report by the power pool.

The 2022 WEIS Benefit of Market Report estimated that the WEIS provided $31.7 million in net benefits to its 12 participating western utilities in 2022 at a benefit-to-cost ratio of 7-to-1. With the addition to the market of the three utilities that serve Colorado customers, the power pool anticipated that the benefits of the WEIS will grow significantly.

WEIS is a real-time balancing market that dispatches the lowest-cost available energy generated and made available by multiple power providers to serve the combined demand for electricity across its region. Without the centralized dispatch provided by WEIS, participants would either have to serve customers individually using their generation fleets or use hourly energy interchanges that are not optimized.

The WEIS report analyzed 2022 energy-use data to estimate what the cost of wholesale energy would have been without SPP’s market. The study compared this to actual energy costs in the WEIS and found that participants collectively saved $31.7 million in energy-cost reductions, surpassing their $4.7 million in contractual costs for market participation. The WEIS reduced the cost of wholesale electricity in the region by an average of $1.35 per megawatt-hour over the year, the report said.

“This report is another confirmation that the Western Interconnection can gain tremendous value from SPP’s services,” said Antoine Lucas, SPP vice president for markets, in a prepared statement. “We look forward to continuing to provide value to our WEIS and other contract service participants in 2023.”

Tri-State Generation and Transmission Association Inc. joined the pool in 2020, and Brighton-based United Power Inc. joined the pool last June as it made preparations to leave Tri-State.

Xcel Energy-Colorado, PRPA and Black Hills announced their intent to join the WEIS in January 2022. Since then, they have been working in collaboration with SPP to prepare their staff and systems to participate in the market. On April 1, following a period of testing, their activities in the market became financially binding.

“Our participation in the WEIS gives us the opportunity to create additional value for our customers,” said Kellie Ashcraft, Black Hills Energy’s vice president for Colorado operations. “We’re committed to supporting our customers with the safe and reliable energy they depend on and doing so in a manner that lowers energy costs, enhances service reliability and supports the expansion of renewable energy on our system.”

More buyers and sellers mean more available generating resources to choose from. According to an SPP news release, this is expected to increase the chance of further lowering costs and enhancing reliability by ensuring generation is always available to meet demand.

“Joining the SPP WEIS helps support our environmental stewardship and represents our commitment to financial sustainability for our owner communities and their customers while focusing on Platte River’s vision of improving our region’s quality of life through a more efficient and sustainable energy future,” said Jason Frisbie, PRPA’s general manager and CEO. “SPP WEIS allows Platte River to reduce costs and balance our energy generation with the real-time power needs of our region, as well as integrate greater amounts of renewable energy.”

Southwest Power Pool, Inc. is a not-for-profit corporation mandated by the Federal Energy Regulatory Commission to ensure reliable supplies of power, adequate transmission infrastructure and competitive wholesale electricity prices on behalf of its members in 15 states. Its region spans parts of the central and western United States, provides energy services on a contract basis to customers in both the Eastern and Western Interconnections, and is expanding its day-ahead energy market in the West.

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