July May Come and Go, but Seams Stick Around

Last month, we told you to keep an eye out for market news in Colorado, where the Public Utilities Commission was weighing whether Xcel's application to join Markets+ should be approved. Yesterday, the PUC voted to approve the application, and while this isn't the outcome most intervenors had advocated for, it's not all bad news this month. Read on for more updates around the West, as well as what is on the horizon.

Leah Rubin Shen, Managing Director at Advanced Energy United

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Day-Ahead Market Developments

Colorado PUC Approves Xcel's Application to Join Markets+

As I mentioned above, the Colorado PUC voted 2-1 yesterday to approve Xcel's application to join Markets+. While the decision means Xcel will move forward, Commissioners Plant and Gilman both expressed concerns about the long-term implications of both seams and emissions tracking and reporting, emphasizing the need for ongoing oversight to make sure Xcel's decision aligns with Colorado's clean energy goals.

As my colleague Brian Turner told RTO Insider, other Markets+ trading partners are far from Xcel's neighbors, the participation will create more seams instead of delivering benefits, and the proposal was approved without the required legal analysis. Brian also said to the Colorado Sun, "this decision threatens to further balkanize the Western grid."

PNM Commits to Joining EDAM

Public Service Company of New Mexico (PNM) signed an agreement at the beginning of the month to join EDAM in the fall of 2027, becoming the seventh utility to join. In its announcement, PNM stated that joining EDAM will deliver an estimated $20 million in annual consumer benefits, enhance grid reliability, and expand opportunities to integraterenewable energy.

BPA Sued Over Day-Ahead Market Decision

Earlier this month, a coalition of environmental organizations sued the Bonneville Power Administration (BPA) over its decision to join Markets+ instead of EDAM. These organizations argue that BPA violated federal law by not prioritizing lower costs and more renewable energy in its market choice. BPA's own modeling showed greater savings from joining EDAM, although the agency defends its choice by saying that Markets+ offers a better market structure and will also lower costs and improve reliability.

Pathways Initiative Updates

California Legislation

SB 540 is still going through the legislative process, and with the California legislature out on recess until August 18, the coalition is focused on getting the bill back on track. This is a critical moment for legislative leadership, the Governor's office, and Pathways supporters to align on a path forward.

As originally introduced, the bill struck a balance between providing certainty around California's participation in an independently governed regional energy market, which is key for other market participants around the region, while also safeguarding the state's autonomy over its clean energy goals, which is critical for California policymakers. However, amendments introduced as the bill moved through the Senate threaten to disrupt this balance and erode trust, to the point that many supporters of the bill withdrew their support ahead of a scheduled Assembly hearing when those issues had not yet been resolved.

This month, we also saw the Assembly and the Governor publicly committed to getting a deal, with strong statements from both Speaker Rivas and Governor Newsom recognizing the urgency of getting the legislation across the finish line this session and committing to California's leadership on this issue.

Additional Updates

WEM Governing Body Approves Important Market Reliability Feature

With PNM signing an implementation agreement, the Western Energy Markets (WEM) Governing Body moved this month to a more independent governance structure as proposed by Pathways Step 1. This new structure gives the WEM Governing Body primary authority and 205 filing rights over WEIM and EDAM. Later in the month, the Governing Body took its first vote when it approved the continued use of an important reliability feature that enables WEIM balancing areas to access energy transfers when they lack sufficient capacity to meet demand.