Renewable Energy SPP

SPP Misses the Mark on Resource Accreditation Again

April 2, 2024

The Southwest Power Pool’s latest proposal once again downplays the risk of fossil fuel plant failures while it undervalues the advantages of wind power. 

SPP (Southwest Power Pool), the regional transmission operator (RTO) for much of the Great Plains and Midwest, continues to undervalue wind power by downplaying the risk of fossil fuel plant failures when power is needed the most. SPP has once again proposed a risk methodology for its system-planning work that inaccurately evaluates the possibility that generators will not be available when needed. Today, after months of working inside the process, NRDC and other organizations filed a complaint at the Federal Energy Regulatory Commission (FERC) to stop these rules from taking effect.

How did we get to this place? Let’s break it down.

In February, SPP, which oversees the power grids in all or parts of 14 states, proposed changes to how it counts the reliability value of each power plant in its system. All RTOs work through this “accreditation” process to ensure they have enough generators online and ready to meet customer demand throughout the year without interruption. Importantly, utilities also use SPP’s accreditation values to help decide what power resources to build in the future.

Sadly, SPP’s proposal fails to account for a well-documented record of coal and gas plant failures during recent bouts of extreme cold, when power shortages are most likely. If approved by FERC, SPP’s plan would slow the shift from fossil fuels to cleaner resources and increase the build-out of climate-damaging gas-fired generators. SPP’s latest resource accreditation proposal comes a year after FERC rejected an earlier version and sent the grid operator back to the drawing board.

Gas and coal plants often fail during extreme weather

To ensure system reliability, SPP requires utilities to demonstrate that they have enough accredited generating capacity to prevent blackouts. However, a biased accreditation scheme, like the one currently used by SPP, rewards coal and gas while penalizing renewables, significantly undermining grid reliability. 

For example, in recent extreme cold snaps—including Winter Storm Uri, which struck Texas and the SPP region in 2021, Winter Storm Elliott in 2022, and more recently, Winter Storm Gerri in January 2024—fossil fuel plant outages caused coal and gas plants to perform well below their accredited value, while renewable resources actually outperformed SPP’s accredited values for them. In fact, higher than expected wind output, together with electricity imports from other regions, likely averted power outages in SPP areas during Gerri. 

Looking at SPP’s data from the last several years during extreme weather events shows that its existing resource accreditation method presents an unrealistically rosy picture of how much gas and coal power would be available during winter storms. As seen in the charts below, the availability of gas and coal generators during recent winter storms (indicated by the red bars labeled “Available”) came in consistently and significantly short of expectations (indicated by the blue bars labeled “Accredited”)—up to 56 percent short during Uri.


On the other hand, wind generator availability either met or exceeded its accredited value during these winter storms, as seen below.


SPP’s proposal perpetuates the problem

SPP has been working to develop new methodologies since last March, when FERC rejected an earlier accreditation plan. NRDC, Sierra Club, and Earthjustice attempted repeatedly to persuade SPP to create an accreditation methodology that fairly represented the performance of different types of power plants. 

But in the end, utilities seeking to protect their interests had greater leverage in the stakeholder process and were able to push through a proposal that fails to provide incentives for generators to improve their performance during extreme winter weather. SPP’s proposal only reflects average power plant availability across a full season and doesn’t account for the much higher risk of generator failures during winter storms. Consequently, SPP’s approach doesn’t give those generators a strong signal that they need to improve their performance during storms and other extreme weather. Instead, SPP’s latest plan would perpetuate a fundamental mismatch between the inaccurate higher reliability value the grid manager assigns to thermal resources and the lower reliability value those resources actually provide to the grid. 

SPP’s proposal would also continue the unfair treatment of renewables compared with thermal resources. Overvaluing thermal plants relative to renewables will encourage utilities to build more gas power plants to compensate for their poor performance, and less wind, solar, and storage that otherwise could be used to meet reliability needs, costing consumers more and resulting in a dirtier electricity mix. 

Groups file complaint

Normally, when we don’t like an RTO’s proposed changes, we file a protest at FERC, asking the commission to send the proposal back to the time-consuming RTO stakeholder process. We did so in this case, asking FERC to reject SPP’s proposal because it understates the likelihood that coal and gas generators will fall short during winter storms. If FERC agrees with us, it will send the proposal back to SPP for more stakeholder discussion, followed by another SPP proposal to FERC and potentially another round of protests. 

All of that process could take another year or more. To speed things along, and since the status quo of SPP’s current accreditation method is also unlawful, NRDC and several other organizations filed a complaint at FERC today. If FERC grants the complaint, FERC would give SPP specific guidance on how to replace its existing methodology with one that accurately captures the likelihood that coal and gas power may not be available when needed. This could resolve our serious concerns much more quickly than another round of the stakeholder process, which, so far, has taken 11 months since SPP started revising the proposal FERC rejected last year. 

SPP has missed an opportunity to bring fairness to the accreditation process and accurately account for weather-related outages at all power resources. Regulators at the federal and regional levels must stop allowing overestimation of the capabilities of gas and coal and ensure that all resources are evaluated on a level playing field. Accurate accreditation of all resources will help ensure a reliable and more affordable grid and allow renewable resources to contribute to a clean, reliable, and resilient electrical system.