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1

Fall 2019Quarterly Report

2MMU

Fall 2019 highlights

• Average hourly load up four percent

• Wind generation capacity climbed by 600 MW

• Energy prices and gas costs decreased

• Real-time make-whole payments increased

• Summary of report on rate pancaking and unreserved use

3MMU

Overall load increased

20

25

30

35

40

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2017 '18 '19

Ave

rag

e ho

urly

load

(GW

h)

2017 2018 2019 Fall

4MMU

Warmer September/colder October

0

100

200

300

400

500

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2017 '18 '19

Co

olin

g d

egre

e d

ays

2017 2018 2019 30 year avg

0

300

600

900

1,200

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2017 '18 '19

Hea

ting

deg

ree

day

s

2017 2018 2019 30 year avg

5MMU

Generation increased

0

5

10

15

20

25

30

Sep18

Oct18

Nov18

Dec18

Jan19

Feb19

Mar19

Apr19

May19

Jun19

Jul19

Aug19

Sep19

Oct19

Nov19

2017 '18 '19

Gen

erat

ion

(TW

h)

Wind Solar Renewable Nuclear Hydro Coal Gas, combined cycle Gas, simple cycle Other

Fall

6MMU

Coal generation continued decline

0%

10%

20%

30%

40%

50%

Sep18

Oct18

Nov18

Dec18

Jan19

Feb19

Mar19

Apr19

May19

Jun19

Jul19

Aug19

Sep19

Oct19

Nov19

2017 '18 '19

Nuclear Wind Coal Gas, combined cycle Gas, simple cycle

Fall

7MMU

Virtuals set prices more frequently in day-ahead market

0%

20%

40%

60%

80%

100%

Sep18

Oct18

Nov18

Dec18

Jan19

Feb19

Mar19

Apr19

May19

Jun19

Jul19

Aug19

Sep19

Oct19

Nov19

2017 '18 '19

Perc

ent o

f int

erva

ls o

n th

e m

arg

in

Virtual Other Gas, simple cycle Gas, combined cycle Coal Wind

Fall

8MMU

Wind set prices more frequently in real-time market

0%

20%

40%

60%

80%

100%

Sep18

Oct18

Nov18

Dec18

Jan19

Feb19

Mar19

Apr19

May19

Jun19

Jul19

Aug19

Sep19

Oct19

Nov19

2017 '18 '19

Perc

ent o

f int

erva

ls o

n th

e m

arg

in

Other Gas, simple cycle Gas, combined cycle Coal Wind

Fall

9MMU

Wind capacity continued to grow

0%

10%

20%

30%

40%

50%

0

5

10

15

20

25

Sep18

Oct18

Nov18

Dec18

Jan19

Feb19

Mar19

Apr19

May19

Jun19

Jul19

Aug19

Sep19

Oct19

Nov19

2017 '18 '19

Cap

acity

fact

or

Win

d c

apac

ity (G

W)

Wind capacity Real-time capacity factor Day-ahead capacity factor

Fall

10MMU

Outages have decreased

0

10,000

20,000

30,000

40,000

50,000

Sep18

Oct18

Nov18

Dec18

Jan19

Feb19

Mar19

Apr19

May19

Jun19

Jul19

Aug19

Sep19

Oct19

Nov19

2017 '18 '19

GW

h

Coal Gas, CC Gas, SC Hydro Nuclear Oil Other Renewable WindFall total

11MMU

Prices continued to fall

$0

$1

$2

$3

$4

$0

$10

$20

$30

$40

Sep18

Oct18

Nov18

Dec18

Jan19

Feb19

Mar19

Apr19

May19

Jun19

Jul19

Aug19

Sep19

Oct19

Nov19

2017 '18 '19

Gas

pri

ce ($

/MM

Btu

)

LMP

($/M

Wh)

Day-ahead price Real-time price Gas cost

Fall average

12MMU

Make-whole payments (RUC) increased

$0

$5

$10

$15

$20

Sep18

Oct18

Nov18

Dec18

Jan19

Feb19

Mar19

Apr19

May19

Jun19

Jul19

Aug19

Sep19

Oct19

Nov19

2017 '18 '19

Mak

e-w

hole

pay

men

ts ($

mill

ions

)

Wind Renewable Nuclear Hydro Coal Gas, combined cycle Gas, simple cycle Other

Fall total

13MMU

Negative price intervals increased

0%

5%

10%

15%

20%

Sep18

Oct18

Nov18

Dec18

Jan19

Feb19

Mar19

Apr19

May19

Jun19

Jul19

Aug19

Sep19

Oct19

Nov19

2017 '18 '19

Perc

ent

neg

ativ

e p

rice

inte

rval

s

LMP -$0.01 to -$25.00 LMP -$25.01 to -$50.00 LMP less than -$50.00

Fall average

day-ahead market

0%

5%

10%

15%

20%

Sep18

Oct18

Nov18

Dec18

Jan19

Feb19

Mar19

Apr19

May19

Jun19

Jul19

Aug19

Sep19

Oct19

Nov19

2017 '18 '19

Perc

ent

neg

ativ

e p

rice

inte

rval

s

LMP -$0.01 to -$25.00 LMP -$25.01 to -$50.00 LMP less than -$50.00

Fall average

real-time market

14MMU

Real-time breached intervals increased

0%

20%

40%

60%

80%

100%

Sep18

Oct18

Nov18

Dec18

Jan19

Feb19

Mar19

Apr19

May19

Jun19

Jul19

Aug19

Sep19

Oct19

Nov19

2017 '18 '19

Intervals with breaches Intervals with binding only Uncongested intervals

Fall average

15MMU

Congestion pattern similar between markets

16MMU

Prices vary across footprint

19.68

18.43

$10

$15

$20

$25

$30

Pric

e ($

/MW

h)

Day-ahead LMP SPP day-ahead average Real-time LMP SPP real-time average

17MMU

High congestion in Oklahoma

0%

10%

20%

30%

40%

50%

$0

$20

$40

$60

$80

$100

Perc

ent c

ong

este

d

Shad

ow

pri

ce ($

/MW

h)

Real-time average shadow price Day-ahead average shadow priceReal-time percent intervals congested Day-ahead percent intervals congested

18MMU

Virtual transactions continued to grow

0%

6%

12%

18%

24%

Sep18

Oct18

Nov18

Dec18

Jan19

Feb19

Mar19

Apr19

May19

Jun19

Jul19

Aug19

Sep19

Oct19

Nov19

2017 '18 '19

Cle

ared

vir

tual

s as

per

cent

of l

oad

Cleared virtuals bids as percent of load Cleared virtual offers as percent of load

Fall average

19MMU

Most virtuals by financial-only participants

0

500

1,000

1,500

2,000

Sep18

Oct18

Nov18

Dec18

Jan19

Feb19

Mar19

Apr19

May19

Jun19

Jul19

Aug19

Sep19

Oct19

Nov19

2017 '18 '19

GW

h

Financial only owners demand bids Resource/load owner demand bidsFall average

0

500

1,000

1,500

2,000

Sep18

Oct18

Nov18

Dec18

Jan19

Feb19

Mar19

Apr19

May19

Jun19

Jul19

Aug19

Sep19

Oct19

Nov19

2017 '18 '19

GW

h

Financial only owners supply offers Resource/load owner supply offersFall average

20MMU

TCRs are underfunded

-20%

0%

20%

40%

60%

80%

100%

120%

-$40

$0

$40

$80

$120

$160

$200

$240

Dec18

Jan19

Feb19

Mar19

Apr19

May19

Jun19

Jul19

Aug19

Sep19

Oct19

Nov19

2017 '18 '19

Fund

ing

per

cent

Mill

ions

Day-ahead revenue Transmission congestion right funding Surplus/shortfall Funding percent

Fall total

21MMU

ARR funding

0%

40%

80%

120%

160%

200%

$0

$20

$40

$60

$80

$100

Dec18

Jan19

Feb19

Mar19

Apr19

May19

Jun19

Jul19

Aug19

Sep19

Oct19

Nov19

2017 '18 '19

Fund

ing

per

cent

Mill

ions

Transmission congestion right revenue Auction revenue right funding Surplus Funding percent

Fall total

22MMU

OMS-RSC Seams Discussion

23MMU

Unreserved use

• Unreserved use charges• Transmission customer does not reserve

adequate transmission service to cover its load obligation

• Charges are punitive in nature• Can affect load on the seam during

transmission outages• Charge could be assessed by neighboring

transmission provider

24MMU

Unreserved use

• Unreserved use analysis• SPP

• January 2017 – June 2019: $770,000• MISO

• 2017 and 2018: $610,000

• None of these charges were due to transmission outages on the seam

25MMU

Rate pancaking

• Occurs when energy is scheduled across more than one transmission providers’ borders and each provider assess transmission charges

26MMU

Rate pancaking

• Analysis• Types of transmission used• Analyzed effects by modeling the reduction of

duplicated transmission charges between SPP and MISO

• Effects on production cost changes with redistribution of transmission charges

27MMU

Real-time transmission scheduled

Transmission service

type

SPP transmission MISO transmission

SPP imports

from MISO

SPP exports to

MISO

MISO imports

from SPP

MISO exports

to SPP

Firm* 66% 74% 67% 57%

MIS** / Spot-In 31% n/a 33% n/a

Non-firm Hourly 2% 18% 0% 42%

Non-firm Secondary 1% 8% 0% <1%

* Firm includes grandfathered service/agreements

** Market Import Service

28MMU

Estimated import/export change

-12

-8

-4

0

4

8

12

Jul18

Aug18

Sep18

Oct18

Nov18

Dec18

Jan19

Feb19

Mar19

Apr19

May19

Jun19

Ave

rag

e ho

urly

exp

ort

MW

SPP to MISO increase MISO to SPP increase Net

29MMU

Estimated production cost change

$0

$100

$200

$300

Jul18

Aug18

Sep18

Oct18

Nov18

Dec18

Jan19

Feb19

Mar19

Apr19

May19

Jun19

Ave

rag

e ho

urly

co

st

Redistribution of transmission fees: exports SPP to MISORedistribution of transmission fees: imports MISO to SPPRedistribution of transmission fees: totalProduction cost change

30MMU

Notes

• Rate Pancaking and Unreserved Use Study found here; https://www.spp.org/Documents/60995/SPP%20MMU%20Rate%20Pancaking%20and%20Unreserved%20Use.pdf

31MMU

Questions?