Sep

30

October 1st will be the day a new power market appears. It will be the product of a merger between two existing systems. The "Integrated System" (IS) is a emerging power market for Northern states. The "Southwest Power Pool" (SPP) is a more mature market for southern states. The merger will be called SPP.

The new SPP will cover 575,000 square miles from northern Texas to the Canadian border. It will serve all or part of Arkansas, Iowa, Kansas, Louisiana, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas and Wyoming.

Not everyone is happy. The City of Lubbock will have none of it. They plan to jilt SPP and join Texas' closed system, which is called the Electric Reliability Council of Texas (ERCOT).

Also a neighboring market seems upset. SPP finds itself squabbling with the Midcontinent Independent System Operator (MISO) over territory and market rights. Perhaps MISO had grand plans to eat SPP or IS, but did not move fast enough or provide good enough offers.

SPP's new market footprint will serve a large portfolio of coal generators. While emission compliance is not their responsibility, SPP may price coal resources near the margin.

This merger is part of a grander plan. The Federal Energy Regulatory Commission (FERC) wants the entire nation to use markets. Many states resist. In particular, states located in the southeastern portion of the country hate FERC's idea. South Carolina, Georgia, Alabama, Mississippi and neighbors currently resist free markets.

It's not just the states. It's also utilities regulated by the states. Southern and Duke would prefer to have FERC stay out of their business.


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