A group of nonprofits sued the Bonneville Power Administration on July 10 in the 9th Circuit Court of Appeals over the agency’s decision to join SPP’s Markets+ instead of CAISO’s Extended Day-Ahead Market, saying the move will drive up costs and risk reliability in violation of federal statutes.
Represented by Earthjustice, the organizations asking the 9th Circuit to review and vacate BPA’s record of decision (ROD) include NW Energy Coalition, Idaho Conservation League, Montana Environmental Information Center, Oregon Citizens’ Utility Board and the Sierra Club.
The group alleges BPA rushed into its day-ahead market decision without considering the environmental impacts of its decision. The agency also now risks increasing costs for customers while ignoring its obligations to prioritize conservation and renewable power.
The group asks the court to vacate the day-ahead market decision and brings claims under the National Environmental Policy Act, the Pacific Northwest Electric Power Planning and Conservation Act, and the Administrative Procedure Act.
“Bonneville’s decision on markets will affect the transmission and generation of electric power across the West and is exactly the type of major federal action that should first consider the harms it could cause to our air quality, grid system reliability, fish and wildlife, etc.,” Jaimini Parekh, senior attorney with Earthjustice, said in a statement. “This is exactly why Congress enacted NEPA — to examine the consequences before acting. Here, however, the agency has completely ignored its obligations under federal law.”
The allegations will sound familiar to those who have followed BPA’s day-ahead market process.
In a news release, the group cites an analysis by state agencies in Washington and Oregon using BPA’s data that found the agency could have saved its customers $4.4 billion through 2035 by joining EDAM.
Those arguments follow a production cost study by Energy and Environmental Economics (E3) commissioned by BPA in 2024 that showed participation in EDAM could deliver the agency up to $106 million in greater benefits than Markets+. (See BPA Sticks to Markets+ Leaning Despite Study Showing EDAM Benefits.)
Proponents of EDAM have pointed to the E3 study and another by The Brattle Group — not commissioned by BPA — that found by 2032, the agency could earn $65 million in benefits from participating in EDAM versus an $83 million net loss in Markets+. (See Brattle Study Finds EDAM Gains, Markets+ Losses for BPA, Pacific NW.)
The suit argues that because EDAM provides a larger market footprint, BPA’s customers will miss out on significant cost savings, improved energy reliability and greater access to clean energy resources. EDAM also is “more geographically contiguous, its market participants include more of Bonneville’s historic trading partners and, consequently, the transmission system is better developed than is the case for Markets+,” the group claims.
“Moreover, Bonneville’s day-ahead market decision will likely require regional electricity providers to construct additional power generation facilities and/or increase operation of existing facilities, including natural gas, and coal plants, as a consequence of Bonneville’s participation in the smaller and less efficient, less diverse Markets+,” the suit states.
By joining Markets+, BPA also is leaving CAISO’s Western Energy Imbalance Market (WEIM) and will lose the benefits of participating in that real-time market, the organizations say.
Meanwhile, BPA has argued consistently its day-ahead markets process has been conducted with significant stakeholder input, noting in its final market decision issued in May that other electric utilities that have taken steps to join either Markets+ or EDAM have done so “without public process or transparency.” (See BPA Chooses Markets+ over EDAM.)
As for the production cost studies, the agency has contended those failed to factor in other key issues, like governance. BPA says the SPP market’s governance structure is “superior” to that of EDAM, despite ongoing efforts by the West-Wide Governance Pathways Initiative to relax the state of California’s oversight for CAISO’s EDAM and WEIM.
Still, the plaintiffs in the underlying suit claim BPA has prioritized governance over other obligations the agency is required to consider under law, such as protecting wildlife and promoting renewable energy.
The organizations also bring up the seams likely to arise after the launch of the two separate day-ahead markets, claiming BPA is contributing to the creation of artificial barriers to trade that will require complex negotiations between parties to ensure effective trade can continue.
However, BPA staff have noted throughout various public meetings that the agency is not solely responsible for creating seams and already manages a non-contiguous balancing authority area that spans six states that is adjacent to 18 other BAAs. BPA staff also noted the agency has more than 75 years of experience managing operations across seams, while acknowledging that day-ahead markets will add a new layer of complexity.
Reaction was swift:
“BPA’s decision to join Markets+ is inconsistent with its responsibility to maximize customer benefits in accordance with sound business principles,” said a statement released by Seattle City Light and attributed to Dawn Lindell, CEO and general manager. “Seattle City Light is deeply disappointed in the agency’s decision. BPA’s own record and analysis shows that Markets+ will increase costs for BPA and its customers. At a time when City Light and other utilities throughout the region are working to contain rising costs to meet growing energy needs, BPA’s disregard for the economic impacts associated with its day-ahead market decision is alarming. Our ratepayers will bear the burden of this decision as it increases energy costs $20 million to $40 million every year.”
When asked for a response, BPA said it doesn’t comment on active litigation.
SPP released a statement from Carrie Simpson, vice president of markets: “SPP is aware that a legal challenge has been filed regarding Bonneville Power Administration’s decision to participate in Markets+. We remain confident in the integrity of BPA’s decision-making process but respect the right of all stakeholders to have their concerns heard, and we trust the judicial process to appropriately consider the issues raised. We stand committed to working with BPA and others across the West to deliver reliable, efficient, and transparent market solutions that benefit the entire region.”
