Southwest Power Pool knew that its path to establishing a new day-ahead wholesale electricity market in the west would require many steps.
The nonprofit Little Rock power grid operator learned of an extra step on July 31.
That’s when the Federal Energy Regulatory Commission asked for more details on SPP’s plan to develop an equitable power market along with 34 electric entities in nine western states.
The market, called Markets+, is still expected to go live in 2027.
It would distribute power in parts of Washington state, Oregon, Montana, Idaho, California, Nevada, Arizona, Colorado and Wyoming. Participants hope to get better prices and enhanced grid reliability as Markets+ aligns generation sources with utilities needing power.
Member utilities will no longer serve customers solely with electricity they generated or purchased themselves. Instead, Markets+ will match them with other generation asset owners, creating a much larger pool of power. And that, in turn, will optimize power generation and distribution to give utilities the lowest-cost electricity possible, according to SPP Vice President of Markets Antoine Lucas.
The FERC’s request for more information from SPP concerned the proposed tariff for Markets+, an outline for how the market would work.
“At its simplest, what FERC’s decision means … is that our staff will take some extra time to provide the commission additional information, context, and clarity about our initial filing,” SPP spokesman Derek Wingfield told Arkansas Business early this month.
“It doesn’t represent a rejection of the market’s overall design or a disagreement in its value proposition. FERC approval is obviously what we’re aiming for, but considering that Markets+ is the first service of its kind to be considered by the Commission and a complex design at that, SPP and our western stakeholders always knew it was unlikely we’d get full tariff approval on the first try.”
Wingfield said FERC’s questions were reasonable, limited in scope and “easily answerable” in a filing the regional transmission organization plans to submit within 60 days. “We’re confident at this point that we’ll be able to handle this extra work without it affecting our planned market launch in early 2027.”
SPP made three separate filings to get FERC approval for a smaller and simpler market that it has operated since 2021. That’s the Western Imbalance Service Market.
“In the grand scheme of our market development plans, we consider this to be part of the normal course of business and evidence that FERC is doing its due diligence in ensuring the integrity of our proposed service,” Wingfield said.
Markets+ is half of SPP’s expansion in the Western Interconnection of the U.S. power grid. The nonprofit organization is also offering western power entities membership in the RTO itself. SPP is the first RTO to operate in both the Eastern and Western Interconnections. Its ambitions come at a crucial time, as extreme weather and emerging stressors like the proliferation of data centers test the grid like never before.
SPP envisions a diversified future of power generation and transmission to bring cost and reliability benefits to the West as it has in its 14-state footprint in the Midwest.
FERC clearance will let SPP proceed with phase two, the actual development and implementation of Markets+. The market will offer participating entities an expanded customer base and let them seize on economies of scale.
Utilities are expected to execute formal commitments to join the market by the end of the year, and Lucas expects Markets+ to ramp up in the second quarter of 2027.
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