SPP Pricing Revisions - February Winter Storm
by Gaby Flores
On February 24th, 2021, SPP began publishing day-ahead and real-time LMP price revisions resulting from the cold snap that took place between February 13th and February 17th. Within minutes, Yes Energy began processing these files and made them available to our customers. In this blog post, we’ll analyze the results of these significant pricing recalibrations.
First, let’s talk data. SPP revised a significant number of prices:
Over 3,200,000 rows of data were re-collected
In the real-time, five-minute market, 237 timestamps had revised pricing
In the real-time, five-minute market, where changes occurred, the revised LMP was, on average, $1,000 less than the initial posting; this occurred primarily because some intervals were adjusted by over $50,000
However, some real-time five-minute LMPs were posted with prices almost $2,000 higher than the initial publication
In the day-ahead market, 48 timestamps had revised pricing
In the day-ahead market, where changes occurred, there was an average price increase of $440, and some hours increased by as much as $2,000
Yes Energy typically only reports the latest and greatest pricing available from the ISO in order to ensure accurate information for our customers. However, considering how significant these pricing changes were, we have created two data series with the original prices for the RT LMP and the DA LMP*. This data is available to our customers in both PowerSignals and DataSignals.
*These data series only exist for this specific week of pricing recalibrations. Original pricing is not available for other ISOs or time frames, at this time.
Transmission Congestion Rights Market
One of the markets drastically impacted by the pricing revisions was SPP’s Transmission Congestion Rights (TCR) market. While TCRs have occasionally been underfunded in SPP, on February 16th, the TCR Funding percentage came in at a record 2357%. Analysis of the changes shows an overall increase of $14 million dollars in congestion revenue for TCR contracts held in February 2021. This can be seen in the chart below showing the total difference in TCR revenue from contracts held in February 2021 based on the day-ahead congestion component following revisions released for February 13th and 14th. Paths that sourced or sinked at nodes in Nebraska Public Power District (NPPD) were most impacted. The NPPD_GGS1 node saw the largest change. Overall, due to the congestion on SPP’s system throughout this event, there was a net increase in all TCR Revenues throughout the February cold snap.
Make Whole Payments
On March 1st, SPP updated their Make Whole Payment file for the cold snap. The Make Whole Payments were the highest SPP has ever published. On February 14th, there was a $300 million imbalance from the day-ahead make-whole process. Make Whole Payments per MW resulted in extremely high Make Whole Payment rates. The day-ahead Make Whole Payment per MW was $311.93, and the real-time Make Whole Payment per MW came in at $103.39.
The ultimate results of this historic week remain to be seen. However, on March 4th, Barbara Sugg, SPP President, and CEO announced that the SPP board of directors approved an assessment of SPP and its members’ performance during the February cold snap. The review will consist of five teams who will assess operational, financial, communications, and other factors related to the storm. Early findings will be presented in early April, and a final report and recommendations will be delivered at the SPP Board of Directors and Members Committee meeting on July 27th.