Spring is officially here, bringing fresh developments...and unfortunately, the possibility of new market seams in the West. As many of you have likely heard, despite a strong push for a delay in its day-ahead market decision, Bonneville Power Administration (BPA) released a draft decision to join SPP's Markets+. This decision could have serious ramifications for market efficiency, leading to market seams across the region and all of the operational and economic inefficiencies that come along with them. More details on what this means for the West below.
Leah Rubin Shen, Managing Director at Advanced Energy United
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NW Energy Coalitionraised concerns about this decision, pointing to BPA's own analysis and other studies showing that this decision will lead to higher costs throughout the Northwest, and stated that BPA should align its decision with the best interests of all regional stakeholders.
My colleague, Brian Turner, spoke with E&E News, cautioning that this move could lock the West into a bifurcated electricity market and noting that a split market would lead to seams, higher costs, and barriers to sharing clean energy across the region. BPA defended its decision in that same article, arguing that the competition between markets has driven better outcomes and that BPA's participation in Markets+ helps maintain pressure on California to improve its own governance and market design.
At BPA's most recent day-ahead market workshop this month, officials limited discussion to clarifying questions about the draft decision andavoided discussing concerns about the market's impact in the broader region. This led to additional frustration from stakeholders, including Seattle City Light and NW Energy Coalition, the latter of which pointed out that "BPA's own study showed it would risk a net loss of $100 million a year or more by joining the smaller of the two market areas instead of staying in the WEIM, which has proven its value to all participating areas."
BPA is expected to issue a final decision in May.
Other Market Updates
FERC Approves SPP's RTO West
In other SPP-related news, FERC approved the plans for SPP to expand grid operator transmission services in the Western Interconnection. So far, a handful of utilities on the eastern side of the region have expressed interest in joining, including Colorado Springs Utilities, Tri-State Generation and Transmission Association, and some regions of the Western Area Power Administration.
This commitment adds yet another layer to the growing concern of seams in the West. As I mentioned last month, Colorado's Xcel Energy announced its intent to join Markets+, while other Colorado utilities are moving to RTO West. This means Colorado is at risk of splitting its electricity system across different markets, creating major seams both within the state and the region.
Rocky Mountain Power Files Application to Join EDAM
Rocky Mountain Power, a subsidiary of PacifiCorp serving customers in Idaho, Utah, and Wyoming, has filed an application with the Wyoming Public Service Commission to join EDAM. The utility already participates in the Western Energy Imbalance Market and argues that EDAM participation will provide reliable, economic, and environmental benefits for its customers in Wyoming. The Wyoming Public Service Commission is accepting public comments until April 11.
Pathways Initiative Updates
California Legislation
Earlier this month, the California Senate Energy, Utilities, and Communications Committee hosted an informational hearing on the Pathways Initiative, giving policymakers the opportunity to hear diverse stakeholder perspectives on the initiative.
There was certainly opposition, largely rooted in outdated assumptions, but also plenty of support. Advanced Energy United, alongside many other advocacy groups, voiced its support of Pathways and its enabling legislation, SB 540, and will continue to show up in support of the bill as it moves through the legislative process.
A recent opinion piece in the Sacramento Bee also highlights why SB 540 is so important and why California legislators should pass it to ensure that the state can bring down energy costs and increase reliability.
Stakeholder Engagement
Pathways is hosting its monthly stakeholder meeting today at 10:30 am PT. Zoom link here. This meeting will provide updates on next steps for regional organization development, timeline, and budget.
Western RTO Newsletter
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