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Xcel, other mountain-states power providers eye cost-saving regional move

A group of 10 power utilities and agencies serving Colorado and neighboring states, including Xcel Energy Inc., say they are beginning talks aimed at joining a multistate organization and taking part in a regional energy market, a move that they say could lead to better reliability, efficiency and cost savings.

The electricity providers — collectively known as the Mountain West Transmission Group — said Friday they are looking into joining what is known as a “regional transmission organization,” or RTO, a membership agency that oversees a region’s bulk electric grid and wholesale power market.

An RTO helps electricity providers move power across large transmission lines from one location to another more cheaply. Members of an RTO agree on a common transmission tariff, or rate, to move power across a region, rather than each member charging its own toll along the route.

About 60 percent of the U.S. power supply is managed by RTOs. But while most eastern states — from Texas through the Midwest and across the Northeast states — as well as much of California are part of an RTO, the Mountain West’s utilities do not belong to one.

In Friday’s announcement, the Mountain West Transmission Group said it will begin discussions with the Southwest Power Pool, or SPP, about possible membership. SPP, based in Little Rock, Arkansas, is an RTO that includes power suppliers in Nebraska, Kansas, Oklahoma, the Dakotas and parts of several other states.

If those talks aren’t successful, Mountain West said it would move on to discussions with other RTOs.

“This is a crucial step in evaluating the potential benefits of a regional energy market for the Mountain West,” said Steve Beuning, Xcel’s director for market operations, in Friday’s announcement.

In addition to Xcel’s Colorado division, Mountain West includes another Colorado power utility — Black Hills Energy, a unit of Black Hills Corp., serving a large area of southeast Colorado.

“The development of a wholesale energy market presents opportunities to reduce costs and increase reliability,” said Stuart Wevik, group vice president of electric utilities at Black Hills Energy. “We will continue to evaluate these two pillars in the next phase of analysis to ensure that we continue to deliver safe, reliable and cost effective energy to our customers.”

The Mountain West group also includes the Westminster-based Tri-State Generation and Transmission Association, a wholesale supplier of electricity to local cooperatives across much of Colorado; Colorado Springs Utilities and the Fort Collins-based Platte River Power Authority, both public power utilities; and the Western Area Power Administration’s Loveland Area Projects and Colorado River Storage Project.

Read full article at Denver Business Journal