FERC audit pushes greater independence for SPP market monitor
Aside from the California ISO, SPP is the only regional grid operator without an independent market monitoring unit, RTO Insider points out. And judging by the grid operator’s statement, that appears unlikely to change.
“We’re pleased the auditors found no instances in which SPP exerted inappropriate influence on the MMU. Neither did FERC conclude the MMU is not independent, nor recommend that SPP’s market-monitoring functions be performed by a third party,” SPP General Counsel Paul Suskie said in a statement.
But FERC did say the RTO needs to take steps to enhance the monitoring unit’s independence. Among problems cited, the audit found SPP RTO executives attended MMU meetings with the Oversight Committee, “thereby having inappropriate access to information associated with MMU operations.”
“In addition, SPP RTO executives were inappropriately involved in the performance evaluation of the MMU Director, approval of the MMU budget, and compensation adjustments for MMU staff,” the audit continued. “SPP RTO executives’ participation in the MMU Oversight Committee meetings and involvement in certain MMU operations resulted in an inadequate separation between the MMU and SPP RTO.”
Among the audit’s recommendations, FERC said it wanted to see SPP’s Oversight Committee “in closer review of the performance of the MMU and in particular the MMU Director.” The operator should also separate the awarding of incentive contributions to MMU staff from approval by SPP RTO “and from measurement by performance of tasks in areas other than MMU-specific objectives.”
FERC also wants the Oversight Committee to have the authority to review and approve the MMU
budget, with review by SPP’s board only as as part of the overall SPP budget.
SPP said in its statement that its Oversight Committee agreed to all of the audit recommendations, “many of which were implemented in 2015 and earlier this year. Others were being implemented at the time of the audit report, and the remainder will be implemented to ensure continued MMU independence.”
SPP CEO Nick Brown offered insight into some of the internal disagreements between the MMU and other grid operator officials in a May interview, outlining a debate ove how to properly compensate natural gas plants for increased cycling as renewable energy penetration increases.