SPP has secured $150 million in financing and entered the second phase of development for its day-ahead market Markets+, the grid operator announced June 30.
Arkansas-based Simmons Bank provided the loan, which is collateralized by eight Markets+ funders, allowing SPP to begin developing “critical systems, processes and operations required to conduct market trials,” according to the announcement.
“Securing financing for phase two of Markets+ is a pivotal step forward,” Carrie Simpson, vice president of markets at SPP, said in a statement. “It allows SPP to continue developing a more efficient, transparent and reliable energy market for our western stakeholders and their customers.”
With the announcement, SPP has entered the second phase of market development. The grid operator already has started its requirement planning and Markets+ training for stakeholders. Stakeholder onboarding processes, including network and commercial modeling, are scheduled to begin Aug. 1, 2025, while connectivity and data exchange testing is slated for late 2026. SPP plans to launch Markets+ on Oct. 1, 2027, according to a timeline posted on SPP’s website.
In April, FERC approved the SPP Phase 2 funding agreement, which details how SPP will finance Markets+’s $150 million in implementation costs. (See FERC Approves SPP’s Funding Plans for Markets+.)
According to the June 30 news release, the eight Western entities that have signed the agreement include Arizona Public Service, Bonneville Power Administration, Chelan County Public Utility District (PUD), City of Tacoma, Grant County PUD, Powerex, Salt River Project and Tucson Electric Power. (See SPP Secures Funding to Begin Markets+ Phase 2.)
The agreement requires the entities to provide collateral to SPP’s lender to support the financing the RTO will use to develop Markets+ during the implementation phase. The collateral is equal to the amount of the entities’ Phase 2 obligations.
The recovery of the costs to repay the implementation financing “will be incorporated into the rates charged in the Markets+,” according to a frequently asked questions document posted on SPP’s website.
BPA, which committed to Markets+ in May, is one of the largest funders of SPP’s day-ahead market endeavor. (See BPA Chooses Markets+ over EDAM and BPA Markets+ Phase 2 Bill Could Reach $27M — or More.)
Agency spokesperson Nick Quinata told RTO Insider that BPA’s commitment for Phase 2 will not exceed $36 million based on the current number of funding parties.
“If additional parties join Phase 2, that would reduce BPA’s share of Phase 2 development costs and, thus, total liability,” Quinata said. “All entities participating in Phase 2 will have these costs recovered through transactional fees once they begin market participation.”
Meanwhile, Grant PUD spokesperson Christine Pratt said the utility acquired a letter of credit for about $4.2 million to contribute to Phase 2. The credit will assist with “the upfront expenses needed for market startup. This includes computer systems — hardware and software — and personnel.”
Grant PUD noted that it did not have to contribute any funds for Phase 2 but was required to provide a letter of credit in case the market failed. Under that scenario, the credit will be called for the amount needed by SPP to recover any costs incurred in standing up the market.
“We’re preparing for Markets+ trading by evaluating our own needs for personnel and equipment,” Pratt said. “Our basic interests or priorities are for the market to succeed. These priorities will likely become more specific as collaboration continues, but for now, a successful market is the goal.”
Chelan PUD spokesperson Rachel Hansen said the utility contributed about $820,000 in collateral.
Chelan now “will focus on preparing for market readiness and has not chosen its go-live target date,” Hansen said.
SPP said in the news release that stakeholders are signing additional Phase 2 funding and participation agreements “based on their entities’ respective sector and role in the market.”
