FERC approves SPP plan to use topology optimization software against grid congestion
FERC approved Southwest Power Pool tariff revisions on 19 August 2026 allowing software-driven grid reconfiguration, with savings estimated at $18m to $44m.
Photo by Petr Ganaj on Pexels
The Federal Energy Regulatory Commission on 19 August 2026 approved tariff revisions allowing the Southwest Power Pool to reconfigure its transmission network with software rather than redispatching power plants when lines become congested. The approach, known as grid topology optimization, routes electricity around an overloaded line by opening and closing high-voltage circuit breakers. SPP filed the revisions on 21 May 2026 in docket ER26-2592-000 and asked for a decision within about 90 days so it could write and test the software before an effective date of 1 October 2026.
The revisions add a new Section 4.6, “Economic Topology Optimization”, to Attachment AE of SPP’s Open Access Transmission Tariff. The tariff language states that the analyses “assess the impacts of reconfiguring the system topology to relieve congestion such that market production cost is reduced while maintaining reliability”. SPP’s board of directors approved the package on 5 May 2026 after review by four stakeholder working groups and the Markets and Operations Policy Committee.
How grid topology optimization works at SPP
Either a market participant or SPP itself can propose a reconfiguration. A participant request must name the target flowgate, specify the operational action, and state the expected duration and system conditions. SPP may cap how many requests it studies per calendar month.
Each proposal has to clear three tests before it can proceed: system reliability, regional production cost, and funding of the Transmission Congestion Rights market. Failing any one means rejection. Proposals that pass go to the local transmission operator, which runs its own reliability assessment and approves or denies the switch. SPP can revert or adjust the topology later as conditions change.
This is an operations-planning process layered on top of the markets, not a change to the day-ahead market, the real-time balancing market or reliability unit commitment. Switches are implemented as real-time conditions allow, and the savings estimates apply to the real-time markets.
| Stage | Date |
|---|---|
| Markets Working Group review | 24 February and 24 March 2026 |
| Regional Tariff Working Group review | 26 February 2026 |
| Operating Reliability Working Group review | 4 March and 18 March 2026 |
| Markets and Operations Policy Committee | 14 April 2026 |
| SPP Board of Directors approval | 5 May 2026 |
| Section 205 filing with FERC | 21 May 2026 |
| FERC order | 19 August 2026 |
| Requested effective date | 1 October 2026 |
Source: SPP, “Submission of Tariff Revisions to Implement Economic Topology Optimization”, docket ER26-2592-000, 21 May 2026; FERC eLibrary accession 20260819-3087.
What the savings estimate is based on
SPP’s application rests on work by NewGrid, SPP and the Brattle Group. The filing states that the evaluation “found that historical system operating limit violations could be eliminated for 75% of the constraints analyzed” and that “the resulting congestion cost savings in the real-time markets were estimated to be in the range of $18-44 million annually”. The figure covers major constraints that were binding or overloading, not every constraint on the system.
That analysis is not new. It traces to a case study presented by Pablo Ruiz and co-authors at a FERC technical conference on 24 June 2020 in docket AD10-12-011, and to an SPP technology expo presentation from November 2018. A separate 2018 SPP pilot evaluated 100 flowgates with real-time congestion and found preferred reconfiguration solutions for 55 of them.
The context is a congestion bill measured in billions. SPP’s Market Monitoring Unit reported net congestion of $1,397 million in 2023, $1,881 million in 2024 and $1,612 million in 2025, a three-year average close to $1.63 billion. The same unit recorded congestion costs rising from $450 million in 2020 to $1.2 billion in 2021.
| SPP net congestion | Amount |
|---|---|
| 2023 | $1,397 million |
| 2024 | $1,881 million |
| 2025 | $1,612 million |
Source: SPP Market Monitoring Unit, “State of the Market 2025”, net congestion table.
Curtailment is the other cost
Congestion also shows up as renewable output that never reaches customers. SPP’s market monitor reported that average hourly curtailment of variable energy resources rose from 137 MW in 2019 to 1,483 MW in 2024, then fell to 1,382 MW in 2025, the second consecutive annual decrease. Solar accounted for an average of 10 MW per hour, or 0.73 per cent of the total, with wind making up the rest.
What MISO’s numbers show
The nearest working comparison is MISO, which established a formal reconfiguration process with stakeholders in June 2023, the first RTO to let market participants request grid reconfigurations to cut regional congestion. SPP’s filing records that 32 reconfigurations were submitted across 2024 and 2025, nine of which were implemented.
MISO’s own update to its Reliability Subcommittee on 18 August 2026 states that “2026 implemented economic reconfigurations resulted in estimated $95M in market benefits”, with benefits calculated for the window 6 May to 4 August 2026. That is a year-to-date figure, not an annual one. The same deck reports a 71 per cent success rate for 2026 submissions, with five of seven approved.
Texas is moving on a similar track. ERCOT already uses topology optimization software to support its Constraint Management Plan and has set implementation of its own mechanism for the first quarter of 2027, according to the grid operator’s technology roadmap cited in SPP’s filing.
Utility Dive reported that FERC commissioners Judy Chang and David Rosner filed concurrences urging other grid operators to follow. In Chang’s words as reported by the outlet, the approach is an example of “advanced transmission technologies that can readily help the U.S. power system quickly integrate more load and generation while reducing costs to all consumers”. The text of the order and the concurrences was not retrievable from FERC’s eLibrary at the time of writing, so those statements rest on Utility Dive’s reporting.
Topology optimization belongs to a wider family of grid-enhancing technologies now attracting regulatory attention. Winss Solutions has covered Australia’s AU$30 million in grid-enhancing technology grants, the 481 grid modernization actions US states took in Q2 2026, and FSU’s GridFusionX AI model for grid forecasting. Storage attacks the same congestion problem from a different direction: the IEA reported that battery storage additions hit a record 108 GW in 2025.
About the Southwest Power Pool
The Southwest Power Pool was formed on 16 December 1941, when 11 electric utilities pooled resources to supply the Jones Mill aluminium plant near Malvern, Arkansas, which needed 120 MW for wartime production. It became a founding member of the North American Electric Reliability Council in 1968, set up regional reserve sharing in 1991, incorporated as an Arkansas non-profit in 1994, and was certified as a NERC reliability coordinator in 1997. FERC designated it a regional transmission organisation on 4 October 2004.
SPP is headquartered in Little Rock, Arkansas, and had 116 member companies as of October 2024. Its fast facts list 105,464 MW of nameplate installed capacity as of January 2022, split 35.7 per cent gas, 29.6 per cent wind, 24.3 per cent coal, 6.3 per cent hydro and 2.0 per cent nuclear, with a coincident peak demand record of 56,184 MW set on 21 August 2023. Its western expansion went live on 1 April 2026, adding utilities in seven states and making SPP the first RTO to operate in both the Eastern and Western Interconnections; the footprint now covers 732,000 square miles across all or part of 17 states and about 20 million people.
The software vendor behind the underlying analysis, NewGrid, is based in Somerville, Massachusetts, and was spun out of a Boston University project funded by ARPA-E’s Green Electricity Network Integration programme in 2015. Its co-founder and chief executive, Pablo Ruiz, was the principal investigator on that project and presented the SPP and ERCOT case studies FERC’s 2020 technical conference now cited in the approved filing.
Sources: Southwest Power Pool; Utility Dive; FERC eLibrary; SPP Market Monitoring Unit; Federal Energy Regulatory Commission; ERCOT; Southwest Power Pool; NewGrid
Featured image: photo by Petr Ganaj on Pexels (free Pexels license).
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I specialize in sustainability education, curriculum co-creation, and early-stage project strategy. At WINSS, I craft articles on sustainability, transformative AI, and related topics. When I’m not writing, you’ll find me chasing the perfect sushi roll, exploring cities around the globe, or unwinding with my dog Puffy — the world’s most loyal sidekick.
