Part One: An Introduction to SPP’s New Resource Adequacy Rules

In August 2024 the Southwest Power Pool (SPP), the Regional Transmission Organization (RTO) which covers territory from New Mexico to Montana, finalized new resource adequacy requirements for all load responsible entities. The new rules changed the way the RTO values electricity generating resources like wind, solar or fossil fuels. Utilities are now required to ensure to SPP that they have enough generation capacity to meet peak demand. Many utilities no longer satisfy SPP’s capacity requirements due to these new rules and now need to acquire more capacity or reduce their peak load. 

This blog series will explore the opportunity for energy efficiency and demand response to address emerging resource adequacy issues as utilities rush to acquire capacity or build new generation before the SPP rules go into effect in 2026.

SPP’s new rules establish an Effective Load Carrying Capability (ELCC) for non-dispatchable resources and a Performance Based Accreditation (PBA) for dispatchable resources. 

• Effective Load Carrying Capability: reduces the energy accreditation of non-dispatchable resources (solar, wind, storage, etc.), to reflect the reduced load-serving benefits as the concentration of like resources increases and these resources impact peak load hours.
• Performance Based Accreditation: reduces the energy accreditation of dispatchable resources (coal, natural gas, nuclear, etc.) to reflect historical forced outages, including winter-only fuel-related outages, over the last seven years. 

SPP is adopting the ELCC and PBA in response to recent extreme winter weather events, like winter storm Uri in 2021, which caused rolling blackouts across SPP service territory and resulted in 246 deaths in Texas. SPP asserts that the ELCC and PBA will help them better anticipate the availability of resources. 

One challenge with resource adequacy is the reliability, or availability, of generation resources. For all generation resources, the availability of resources is impacted by season and weather events. SPP stated that during extreme weather events, resource availability (the amount of energy SPP could draw from) was drastically different than the energy system’s accredited capacity (the amount of energy each generation resource is certified to contribute).  

During winter storm Uri, out of 30 GW of accredited capacity only 13 GW of gas resources were available, and only 17 GW of coal resources were operating, compared to 22 GW of accredited capacity. The availability of non-dispatchable resources varies significantly throughout the day. For example, on July 29, 2024, at noon there were 17,356 MW of wind generation in SPP’s resource mix, while at midnight there were 15,258 MW of wind generation, both varying from SPP’s nameplate capacity of 35,628 MW (May 2025). These inconsistencies have led SPP to adopt the PBA and ELCC to maintain a more accurate pulse on resource availability. Environmental advocates have criticized SPP for unequally devaluing renewable energy while designing a PBA which fails to effectively address the issue of widespread outages of dispatchable resources during extreme weather events. 

Additionally, SPP adopted an updated Accredited Capacity Planning Reserve Margin (ACAP PRM) for both summer and winter seasons. The ACAP PRM is calculated based on a utility’s peak load plus an assigned planning reserve margin percentage. With the ELCC and PBA devaluing many generation side resources, utilities are scrambling to update resource plans and bring online new generation resources to meet ACAP PRM requirements. One resource many utilities are reaching for are gas powered “peaker” plants – to meet peak demand. 

With an urgent need to comply with the new rules, many utilities are overlooking the most cost effective and readily available resources, Demand Side Management (DSM) solutions, including energy efficiency, demand response and customer-side storage. In the Midwest, the average utility cost of generating one MWh through a gas peaker plant is $110 to $228, while the average cost of saving one MWh through energy efficiency investment is $20 to $47. By investing in DSM solutions, utilities can begin lowering their ACAP PRM to meet existing generation resources in the near term, as opposed to chasing ever-growing peak demands. 

Lincoln Electric System (LES), a municipal electric utility in Lincoln, Nebraska, is conducting a public process to investigate potential resource solutions to SPP’s updated resource adequacy rules. The LES Administrative Board recently approved a resolution to implement a 4% systemwide rate adjustment to fund additional generation for the utility, including the construction of two natural gas combustion turbines totaling 100 MW of capacity. However, the utility is likely to require additional resource investment within the next year. MEEA has participated in this process as an advocate for energy efficiency and demand response investment. 

How utilities plan to meet resource adequacy requirements is a complex issue and plays into the growing conversation about how our energy system will evolve to meet rising demand across the Midwest. MEEA will continue to unpack this case study and emerging issues in a forthcoming blog.