Understanding RTOs: Southwest Power Pool (SPP)

Refresher: What is an RTO?

While states set their own clean energy goals and utility policy, wholesale markets and electricity transmission between states are regulated by the Federal Energy Regulatory Commission (FERC). In many cases, this is organized through regional transmission organizations (RTOs). RTOs are responsible for managing the capacity market, which ensures that electricity supply meets future demand with adequate reserves.

What States Make Up SPP?

SPP (Southwest Power Pool) consists of 14 states: Arkansas, Iowa, Kansas, Louisiana, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas, and Wyoming.

Source: Energy Knowledge Base

How is SPP Structured?

The Board of Directors is responsible for overseeing the operations and setting the strategic direction of SPP. Also, since SPP is a member-based organization, members have voting rights, play a role in electing the Board of Directors, and provide input on important decisions such as organizational functions, operations, and regional issues. Members include investor-owned utilities, municipal systems, generation and transmission cooperatives, state authorities, independent power producers, and power marketers. 

Why Should You Care About SPP?

SPP plays a critical role in managing and maintaining the reliable supply of electricity across multiple states in the central United States. Although only states in the central United States are a part of SPP, there is ongoing work for RTO expansion into the Western Inconnection, which is the geographic area containing the synchronously operated electric grid in the Western part of North America. It is anticipated that this expansion could help members achieve renewable energy goals, reinforce reliability, and leverage new opportunities to buy, sell, and trade power. 

What Have States Done Around SPP?

As states currently within SPP look towards the integration of more renewable energy to meet environmental goals, expanded service and transmission will be key. State regulatory commissioners participate in regional transmission planning, transmission cost allocation, and resource adequacy policies at SPP through a Regional State Committee.  In 2023, SPP began Phase l of its Markets+ initiative, which is its own Western-focused energy market. Markets+ is a plan proposed by SPP to improve how they manage electricity. It involves combining day-ahead and real-time processes to handle the growing use of renewable energy more effectively.