SPP returns to conservative operations, downgrading from fifth declared EEA Level 1

Southwest Power Pool returned to a period of conservative operations, a downgraded from the fifth energy emergency alert level 1 declared in as many days, as sub-freezing temperatures remain across the 14-state balancing authority footprint and wholesale power prices continue to trend well above seasonal levels.

Conservative operations remain in effect until 10 pm CT Feb. 20 due to continuing high loads and other implications of severe cold weather, the grid operator announced in a Feb. 19 morning update.

"The declaration of conservative operations signals that due to extreme weather, utilities should operate with heightened awareness of possible contingencies," according to SPP.

Peakload is expected to return to seasonal levels Feb. 21 as SPP forecast peakload around 41.494 GW Feb. 19, 35.972 GW Feb. 20, 32.809 GW Feb. 21 and 31.721 GW Feb. 22. Month-to-date peakload has averaged about 38.2 GW, up 17% from the five-year average for the same period.

Low temperatures were forecast to remain below freezing until Feb. 23 for most of the SPP footprint, with high temperatures ranging from the mid-30s to upper 50s Feb. 20, low 40s to low 50s Feb. 21, low 50s to low 60s Feb. 20 and mid-50s to upper 60s Feb. 23, according to CustomWeather.

Prices were still trading at elevated levels on the forecast of higher load from freezing temperatures.

South Hub on-peak day-ahead was bid at $40/MWh and offered at $750/MWh for Feb. 22 delivery on the Intercontinental Exchange, while balance-of-the-week was bid at $40/MWh and offered at $250/MWh. The South Hub on-peak weekend package was bid at $60/MWh and offered at $350/MWh on ICE.

Off-peak prices rival on-peak

SPP set record high prices Feb. 18 for both on-peak and off-peak at both hubs.

SPP South Hub on-peak day-ahead locational marginal prices reached $3,821.05/MWh for Feb. 18 delivery, while North Hub on-peak day-ahead LMP reached $3,385.08/MWh, both surpassing the record levels set Feb. 15, according to SPP data.

SPP North Hub on-peak day-ahead locational marginal prices fell below $1,000/MWh for the first time in a week to $908.86/MWh for Feb. 19 delivery. However, South Hub on-peak day-ahead LMP was at $1,007.10/MWh for Feb. 19 delivery, according to SPP data.

SPP on-peak day-ahead LMPs averaged $2,569.93/MWh Feb. 15-19, 11,280% higher than the five-year average for that period, according to SPP data.

Off-peak prices have been rivaling on-peak levels throughout the week, with North Hub off-peak first surpassing on-peak Feb. 16 and then both hubs' surpassing on-peak Feb. 17-19, according to SPP data. Off-peak prices climbed to as much as $583.22 above on-peak prices to set record highs.

North Hub off-peak day-ahead LMP peaked at $3,659.54/MWh for Feb. 18 delivery, $274.46 above the on-peak record, as South Hub off-peak day-ahead LMP peaked at $4,072.14/MWh, $251.09 above the on-peak record.

For Feb. 19 delivery, off-peak prices averaged $534 higher than on-peak LMPs, according to SPP data.

Record load from extreme cold

The SPP system set a new winter peakload record of 43.661 GW Feb. 15, according to SPP data.

As demand surpassed available supply, SPP directed member utilities to shed power Feb. 15 and 16. If controlled outages were not initiated, the grid runs the risk of cascading, uncontrolled outages, officials said.

SPP directed member utilities to implement rolling outages Feb. 15 and 641 MW were interrupted for about 50 minutes, representing about 1.5% of total load at the time.

Member utilities were directed to implement rolling outages Feb. 16 and 2.7 GW were interrupted for more than 3 hours, representing about 6% of load.

Energy Emergency Alerts

The extreme cold weather created energy deficiencies across SPP's region and marked the first time in its 80-year history that it has to declare Energy Emergency Alert Levels 2 or 3 for its entire region or had to direct member utilities to implement controlled, temporary service interruptions to prevent widespread blackouts, according to a Feb. 18 news release.

SPP declared conservative operations Feb. 9 until further notice in anticipation of the winter storm.

Load-serving utilities throughout the SPP region were requested to conserve energy beginning at midnight Feb. 15 and for the following 48 hours to mitigate the risk of more widespread and longer-lasting outages.

SPP declared an EEA Level 1 early Feb. 15, signaling the system may be unable to meet required contingency reserves. That was upgraded to an EEA Level 2 later late day, requiring SPP to direct member companies to appeal to the public to conserve energy. It also served as a maximum emergency generation notification for resources and informed the market that emergency ranges of any resources may be required.

An EEA 3 was declared Feb. 15 when SPP was forced to begin relying on required reserve energy.

The situation eased to an EEA Level 2 shortly after noon Feb. 15 as load was restored to the region with enough generation to meet demand and minimum reserve requirements.

However, SPP declared an EEA Level 3 again early Feb. 16 as system-wide generating capacity dropped below current load of approximately 42 GW due to extremely low temperatures and inadequate supplies of natural gas.

The situation eased to an EEA Level 2 by 11:37 am Feb. 16 and then to EEA Level 1 shortly after noon.

SPP escalated to an EEA Level 2 around 6:30 pm Feb. 16 and directed members to issue public conservation appeals.

The situation was downgraded to an EEA level 1 midday Feb. 17 but escalated to an EEA Level 2 around 6:20pm Feb. 17. It later returned to an EEA Level 1 around 11 pm Feb. 17.

Likewise, the situation was downgraded to conservative operations status. early Feb. 18, but an EEA Level 1 was declared that evening.