SPP begins phase I of Order 1000 solicitation process

The Southwest Power Pool (SPP) on April 1 opened the window for its qualified request for proposal participant (QRP) process, kicking off the RTO’s competitive solicitation process, or transmission owner selection process (TOSP).

The TOSP, which SPP developed to comply with FERC Order 1000, requires any transmission provider who wants to participate in competitive bidding in 2015 to obtain QRP status this year. One of Order 1000’s requirements was to remove right of first refusal (ROFR) language from federal tariffs in an effort to open the transmission development landscape up to competition from non-incumbents.

The QRP application window is open until June 30. SPP staff will then vet the applications and determine qualified applicants by Sept. 30, after which there will be a cure period for deficient applications.

“By the tariff, by Dec. 31, we will post a finalized list of all QRPs for 2015,” Ben Bright, SPP’s manager of regulatory process, told TransmissionHub on April 3.

SPP has not yet identified projects eligible for competitive solicitation in 2015, Bright said. The RTO will issue a needs assessment based on its near-term and 10-year integrated transmission plans (ITPNT and ITP10), after which it will open a 30-day detailed project proposal (DPP) window.

“As part of our normal integrated transmission planning process, and through Attachment O of our tariff, we’ve always allowed our stakeholders and our members to propose projects that could be needed to be built in the SPP footprint,” Bright said. “Now what happens is we have a little nuance to that called the detailed project proposal, so there’ll be a 30-day window that opens up once our transmission planning process puts out a needs assessment.”

The DPP process is designed to increase stakeholder participation and to encourage the submission of innovative project proposals to meet the region’s needs, Bright said.

SPP has also provided an incentive to participate in the DPP process: if a project proposed during the DPP period is eventually approved for construction by SPP’s board of directors, the sponsor who proposed the project will receive extra points in the point system used to determine the winning bidder.

“So, there is an advantage for people getting involved in the planning process, helping SPP come up with the most cost-effective innovative project approaches,” Bright said.

SPP expects to open the 30-day DPP window after issuing the ITP10 needs assessment on May 2. After the DPP window closes at the beginning of June, SPP will discuss potential projects with stakeholders, Bright said.

“The schedule today shows we’d have a portfolio of projects to present to the board for approval” in January, Bright said.

The board of directors meets in the last week of January every year.

Once projects are approved for construction by SPP’s board of directors, certain projects will then go out in a request for proposal (RFP) process. SPP must issue RFPs either seven days after the board approves a project, or within 18 months of expected financial expenditure, Bright said.

“What we’ll also be doing this year in 2014 is developing a pool of industry experts,” Bright said. “We’ll be looking for ” 20 to 25 industry experts that meet a number of qualifications.”

Applicants must have documented expertise in engineering and design, project management, construction and operations, rate design and analysis and finance, Bright said. Three to five industry experts will be assigned to review the applications for certain projects.

Project proposals will be evaluated and judged by this panel of industry experts, who will rate, review and score on a 1,000-point scale the transmission providers’ proposals. Transmission providers whose own proposals are chosen will receive 100 incentive points, Bright said.

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Rosy Lum, Chief Analyst for TransmissionHub, has been covering the U.S. utility industry for over six years. She began her career as an energy journalist at SNL Financial, for which she established a New York news desk. She covered topics ranging from energy finance and renewable policies and incentives, to master limited partnerships and ETFs. Thereafter, she honed her energy and utility focus at the Financial Times' dealReporter , where she covered and broke oil and gas and utility mergers and acquisitions.  She can be reached at rosyl@pennwell.com or at (347) 799-2802.

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