Please, please, please...make a good market choice (yes, I'm talking about you, Colorado)

Please, please, please... make a good market choice (yes, I'm talking about you, Colorado)

Summer is starting to heat up, and once again, as temperatures begin to climb, so does urgency around grid reliability. From utilities making new market announcements to PUC hearings, June delivered the kind of craziness only a Sabrina Carpenter lyric can handle. Read on to see what's heating up.

Leah Rubin Shen, Managing Director at Advanced Energy United

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Developments in the States

Colorado

Last week, Tri-State Generation and Transmission Association filed an application to join SPP's RTO West with the Colorado PUC. This announcement comes three months after Xcel Energy filed its application to join SPP's Markets+ and raises concerns about how the Colorado utilities' decisions could further market fragmentation. The Colorado PUC will be making a decision on approving or rejecting Xcel’s application in mid-July.

If these applications are approved, Colorado could be split between several different energy systems, creating internal seams that will increase costs, reduce efficiency, and limit the ability to share the state's clean energy resources.

ICYMI:

Former Colorado State Senator Chris Hansen wrote an op-ed expressing concerns about Xcel Energy's plan to join Markets+, arguing that it is not a full RTO and may fall short of delivering the economic and environmental benefits required under SB 72. Hansen's op-ed also highlights recent findings from an Aurora Energy Research study showing greater economic benefits if Colorado utilities were to join EDAM.
My colleague, Brian Turner, published Part 2 of his blog series, exploring the important market decisions Colorado utilities are facing and what these decisions will mean for the state's clean energy leadership and future. In Part 1, Brian outlined the market choices facing Colorado utilities and concluded that the state can either “be a leader or a laggard.” Part 2 digs deeper, showing that Colorado now faces a pivotal decision: lead the clean energy transformation in the West or risk handing over control to a smaller market based outside the region entirely.

New Mexico

At a recent forum, a representative from Public Service Company of New Mexico (PNM) voiced concern that breaking up the Western Energy Imbalance Market could create a bifurcated market in the West and threaten grid reliability. Other utility and market leaders from CAISO, Portland General Electric, and Idaho Power echoed these concerns as well.

At the same time, Western Resource Advocates is asking the New Mexico PRC to request that El Paso Electric and PNM provide more information about their respective plans to join the two different day-ahead energy markets, SPP Markets+ and EDAM (see docket 23-00268-UT). Similar to Colorado, there are significant implications for cost, reliability, and clean energy resource sharing in the state if utilities join separate markets. This is particularly timely as El Paso Electric may soon make a binding financial commitment to Markets+ Phase 2, which is set to start in mid-August 2025.

California

Earlier this month, SB 540 saw a lively Senate floor debate that reflected increased understanding of many lawmakers about the importance of this issue, and then ultimately passage of the bill 36-0 in the Senate. SB 540 is now in the Assembly, where it will not be referred to a policy committee, reflecting that the Speaker is taking ownership of the bill. This is overall a positive development, as it will provide legislative leadership, the Governor's office, and Pathways supporters more time to reach a deal.

Yesterday, a broad coalition also sent a letter to leadership and the Governor, conveying that a wide range of stakeholders continue to support the policy goals outlined in the original version of the bill. Although there is a long road ahead, we remain optimistic that a satisfactory deal can be struck.

An updated Brattle Group analysis presented to the California Energy Commission earlier this month found that an expanded EDAM could deliver over $1 billion in benefits annually to California, compared to today's status quo. The study reaffirms that broader market participation, and a larger market footprint, will reduce renewable energy curtailment, lower costs, increase solar revenue, and reduce greenhouse gas emissions.

Day-Ahead Market Updates

The Western Energy Markets Governing Body announced Debra Smith, former CEO of Seattle City Light, as its newest member. Former Nevada PUC Commissioner Rebecca Wagner is now named chair.

On the SPP front, earlier this month the SPP board members overseeing the developments of Markets+ approved the governance transition plan, including stakeholder representation, meeting policies, and a $390,000 budget.