SPP Integrated Marketplace OverviewBruce Rew, PE

Vice President, Operations

2

Operating Region

• Miles of service territory: 575,000

• Population served: 18M

• Generating Plants: 756

• Substations: 4,757

• Miles of transmission: 60, 944

• 69 kV 13,532• 115 kV 14,269

• 138 kV 9,117• 161 kV 5,647• 230 kV 7,608• 345 kV 10,772

3

Generation Capacity* by Fuel Type(87,086 MW total)

4* Figures refer to

nameplate capacity

as of 1/1/18

2017 Energy Productionby Fuel Type (259, 554 GWh total)

19.5%

46.3%

4.2%

22.7%

6.8% 0.6% 0.2%

Gas (19.5%)

Coal (46.3%)

Hydro (4.1%)

Wind (22.7%)

Nuclear (6.8%)

Other (0.3%)

Solar (0.2%)

5

MWTG and SPP Footprint (with DC Ties)

Eastern Interconnect

Western Interconnect

Texas Interconnect

Miles City (200)

Rapid City (200)

Stegall (100)

Sidney (200)

Lamar (210)

BlackWater (200)

Eddy (200)

MWTG

4 DC Ties MWTG

710 MW

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SPP’s Energy Market: Integrated Marketplace

• Similar to other competitive regional electric markets

• Matches buyers and sellers of energy

• Day-Ahead market includes unit commitment

• Real-Time spot market for energy

• Procures necessary ancillary services

• Consolidated Balancing Authority for reliability and optimized dispatch

• SPP does not have a Capacity Market

Reserve Margin at 30%+

Extensive renewable penetration

SPP

7

Market Facts

• 207 market participants

• 756 generating resources

• 2017 Marketplace Settlements = $16.7 billion

• 50,622 MW coincident peak load (7/21/16)

• Winter peak: 43,584 MW (1/17/18)

8

Marketplace Benefits

• SPP’s markets provide participants $422M in net savings annually

• Reduce total energy costs through centralized unit commitment while maintaining reliable operations

• Day-Ahead Market allows additional price assurance capability prior to real-time

• Operating Reserve products support implementation of the SPP Balancing Authority and facilitate reserve sharing

• Market continues to provide savings even with extremely low natural gas prices

• At the end of 2018 the savings amount was over $1.7 Billion from the Integrated Marketplace

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Integrated Marketplace Overview

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Key Components

Day-Ahead (DA) Market

Real-Time Balancing Market (RTBM)

Transmission Congestion Rights (TCR) Market

Products

Energy

Operating Reserve (Regulation Up, Regulation

Down, Spinning, Supplemental)

Congestion Rights

Day-Ahead Market• Determines least-cost solution to meet energy bids

and reserve requirements

• Participants submit offers and bids to purchase and/or sell energy and operating reserve:

• Energy

• Regulation-Up

• Regulation-Down

• Spinning Reserve

• Supplemental Reserve

• Financially binding market

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Day-Ahead Market Timeframe

12

Reoffer Period

(14:00 – 14:45)

Day-Ahead

Market

Processing

(09:30 – 14:00)

• Performs unit

commitment

• Sets DA prices

• Performs

clearing

Period when Market

Participants can

submit new offers

prior to DA

Reliability Unit

Commitment.

Pre-Day-

Ahead Market

Activities

(00:00 – 09:30)

24 Hours Prior to Operating Day

• Offers and Bids

Submitted (up to

7 days in

advance)

• Operating

Reserves Posted

* Times specified are the times associated with normal operating conditions. SPP may

delay these times to account for unforeseen circumstances; SPP will notify MPs of any

such timing delays.

Day-Ahead

Reliability

Unit

Commitment

(14:45 – 17:15)

Ensure enough

capacity

committed for

next operating

horizon

Real-Time Balancing Market (RTBM)

• Balances real-time load and generation committed by the Day-Ahead Market and Reliability Commitment processes

• Operates on continuous 5-minute basis Calculates dispatch instructions for energy

and clears operating reserve by resource

• Energy and operating reserve are co-optimized

• Settlements based on difference between results of RTBM process and Day-Ahead Market clearing

• Charges imposed on market participants for failure to deploy energy and operating reserve as instructed

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Improved Reliability and Resilience • Entities performing Reliability, Balancing and

Market function improve Reliability and Resilience of BES.

Functional control of Resources and can commit resources on a multi day ahead and day ahead basis to maintain Reliability.

Multi Day Reliability Unit Commitment studies that use Security Constraint Economic Dispatch logic to maintain N-1 secure Transmission System

Running voltage and stability studies on a multi day ahead basis

Both the MDRA studies and VSAT studies consider transmission outages that are scheduled

Running Intra Day Reliability Unit Commitment studies that use Security Constraint Economic Dispatch logic to maintain N-1

Contingency reserve clearing and regulation clearing

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Reliability Coordination:

• Monitor grid 24 x 365

• Anticipate problems

• Take preemptive action

• Coordinate regional response

• Independent

• Comply with more than 5,500 pages of reliability standards and criteria

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Congestion Prevents Access to Generation

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Load pockets see higher

prices (pay for more

expensive, local generation)

Low prices in areas

with high amount of

cheap generation

(wind), constrained

by transmission

outlets

Congestion’s Impact on Market Prices

17WDWFPLTATNOW: Woodward – FPL Switching Station 138kV

for the loss of Tatonga – Northwest 345kV

Woodward to FPL Transmission line

West East flow across NW Oklahoma

MEC: $29.36/MWh

West of constraint: $-9.66 /MWh

East of constraint: $86.88 /MWh

Bruce Rew, PE

Vice President, Operations

brew@spp.org

501-614-3214