Southwest Power Pool CEO talks wind, coal and 2020 departure

Source: By Rod Kuckro, E&E News reporter • Posted: Thursday, August 1, 2019

Nick Brown, CEO and president of the Southwest Power Pool that spans 14 states, announced yesterday that he’s stepping down next year, teeing up a search for new leadership at the nation’s youngest regional transmission organization.

Brown is the only CEO the Arkansas-based grid operator has known since it was designated as an RTO by the Federal Energy Regulatory Commission in 2004.

Brown, 60, told the SPP board yesterday that he plans to leave in April 2020 after 35 years at the company.

When he first took the helm in December 2003, the grid operator was radically different. During Brown’s tenure, SPP become an RTO, earning it federal recognition to oversee reliability across a huge portion of the U.S. power grid. The nonprofit also launched an energy imbalance service market in 2007, built a new corporate campus in 2012, started a wholesale market for day-ahead power in 2014, invested nearly $10 billion in transmission upgrades and grew its service territory from eight to 14 states.

Brown recently set SPP on a path to invite nonmember utilities in the western United States to join a new Western Energy Imbalance Market (EIM), set to open in early 2021. It represents a direct competitor to the EIM now operated by the California Independent System Operator.

But Brown said that perhaps the most important development during his time with SPP occurred before he was CEO.

“The most significant [thing] that sticks in my mind was the implementation of regional security coordination in ’97 and the implementation of our first regional tariff in 1998,” he said in an interview.

SPP’s members at the time took a leap of faith and “really had to let go of being in charge of the reliability of their facilities and also the management of their transmission assets, where we — in a one-stop-shopping fashion — could sell service over all of their transmission facilities,” he said. “That was a pretty big deal for utilities in the central part of the U.S. in the late ’90s.”

Larry Altenbaumer, the former president of Illinois Power and chairman of SPP’s board of directors, said Brown has “made an indelible mark on this organization and will leave it with momentum carrying us toward a successful future.”

Executive search consultancy Russell Reynolds Associates has been hired to find a successor, SPP said.

Wind vs. coal

SPP now has 99 members, nearly twice as many as in 2003.

They include investor-owned utilities, electric cooperatives, municipal utilities, independent power producers, independent transmission companies and state agencies that serve more than 18 million customers across a mostly rural service territory ranging from North Texas to the Canadian border.

As SPP’s service area has expanded since 2003, the transmission operator has added new lines to serve customers and allow for renewables to power the grid.

Those 66,000 miles of transmission lines have enabled the RTO to draw on more inexpensive wind power, a synergy envisioned by the Obama-era Clean Power Plan.

But Brown insisted the new wind in SPP was not the result of the Clean Power Plan, but a consequence of industry trends that were already underway.

The Clean Power Plan called for “the shutdown of coal generation in the [SPP] footprint at an accelerated rate,” Brown said.

“Had that happened, we would not have been able to integrate the degree of renewable resources in our footprint that we accomplished — and the reason is the variability of wind,” he said.

Although wind “looks tremendous” based on annual energy output and its degree of market penetration, he pointed out that SPP has experienced days when it lost massive amounts of wind capacity in a matter of hours.

“Had we not had the coal generation in our footprint, there’s no way in the world the lights would have stayed on,” Brown said, adding that Obama’s initiative “was not needed.”

‘A work in progress’

Brown was equally dismissive of the Trump administration’s ongoing efforts to promote coal power, noting that it “is not going to do anything. It’s government stuff.”

“The industry was already moving in the direction it was moving in. We didn’t need mandates of what to shut down. In fact, we didn’t need mandates of what to ramp up,” he said. “I view the previous administration’s effort to move the ball and the current administration’s effort to move the ball back as both being unnecessary — and quite frankly, they produced no change in the current direction of the industry.”

Earlier this spring, SPP set a record for wind energy production when it served 67.3% of customer demand with wind on April 27. Factoring in other renewable sources, SPP hit 71.4% renewables penetration that day.

Coal-fired power plants still play a significant role across the organization’s 546,000-square-mile service territory, producing 42% of SPP’s electricity in 2018. But that figure is down from 64% in 2008.

The contribution of natural gas has not changed as dramatically, falling to 23% in 2018 from 27% in 2008.

The biggest shift has been with wind power, which contributed 24% in 2018, up sharply from just 3% a decade earlier.

That integration should continue as long as the grid operator is prudent, Brown said.

The expansion of its Western market offerings over the next 18 months, he said, is “a step in the right direction” and will make the region “absolutely” more connected.

“I won’t be around to see that,” he said. “But you know what? SPP has always been a work in progress, and it will always be a work in progress.”