The Bonneville Power Administration has said it will become the first Western utility to formally commit to funding further development of SPP’s Markets+ offering in the Western Interconnection.

In an Aug. 12 letter to the Public Power Council’s (PPC) Executive Committee, BPA Administrator and CEO John Hairston said that while the agency has not made a decision to join Markets+ as a market participant, it expects to fund its share of the market’s development phase in late 2022 and to participate in drafting a tariff and market protocols next year.

“By supporting and participating in SPP’s process, Bonneville and our customers can help shape the market design in a way that ensures it could work with our statutory obligations and support Bonneville’s customers’ needs and interests,” Hairston said.

He said BPA’s goal is to ensure the utility has a fully developed option “that could work for Bonneville” and that can be evaluated alongside CAISO’s Extended Day-Ahead Market (EDAM) proposal. The agency will continue to take part in the EDAM development process as well.

“Bonneville recognizes that independent governance is an essential aspect of any potential future market to ensure neutrality in market development, implementation and operation,” Hairston wrote. “While some aspects of the Markets+ governance proposal can be improved upon, Bonneville is encouraged by the representative nature of SPP’s existing governing structure and its participant-driven process.”

He said BPA supports the Markets+ governance proposal that includes independent, West-wide participation.

“Bonneville is also encouraged by SPP’s track record of accommodating the unique characteristics and statutory requirements of the Western Area Power Administration in its other markets and SPP’s long history of working with public power in its Eastern region,” Hairston said.

The letter was in response to an earlier letter from the PPC, which represents the Pacific Northwest’s public utilities in the region and in D.C. The PPC encouraged BPA to commit to a “fully informed decision” on meeting customers’ “evolving needs in the context of a rapidly changing Western electric grid.”

“This was welcome news as we look to evaluate all options on the table,” PPC Executive Director Scott Simms said in an email to RTO Insider. “Specifically, we in Northwest public power will continue to evaluate CAISO’s EDAM approach along with SPP Markets+ approach, with an eye to the governance structure and overall market design path that can create the greatest value to BPA and its customers in the Pacific Northwest.”

BPA’s decision is significant, as it is the region’s 800-pound gorilla with 15,000 circuit miles of transmission that serve the region. Its footprint’s size has been compared to France, and it serves nearly 3 million people.

The PPC’s members are among the largest purchaser of the utility’s transmission products and services. It said it is closely watching BPA to determine whether it will continue to provide “reliable, affordable and clean resources.”

Lauren Tenney Denison, PPC’s director of market policy and grid strategy, said BPA’s transmission and connectivity “will be critical” for enabling a successful organized market in the Northwest.

“BPA is adjacent to over a dozen other balancing authority areas, which are all also considering potential participation in Markets+ and other market opportunities,” she told RTO Insider. “Their access to those market opportunities will be impacted by the availability of BPA’s transmission to be utilized in that market.”

Denison said BPA’s 31 dams, with a nameplate capacity of 22 GW, could provide “considerable” value for any centralized market, but that its commitment to continue develop day-ahead options “signals an assurance from BPA and public power that they will work collaboratively with other entities in the region to find an integrated market option that will work for the region.”

“This is particularly important given the Northwest’s previous struggles with establishing organized markets,” Denison said. “BPA’s role as a federal power administration with statutory commitments can create challenges to the agency participating in organized markets. This statement … demonstrates a commitment to work through these issues.”

SPP welcomed the news.

“Over the last several months, SPP has been encouraged by the level of engagement among utilities like Bonneville Power Administration, plus public interest groups, state commissions and others interested in seeing Markets+ become a reality,” CEO Barbara Sugg said in a statement. “With their input on the challenges and opportunities of ensuring electric reliability in the West, and our experience designing, building and administering electricity markets, we’re confident we can deliver a market that brings tremendous value to a new part of the country.”

SPP is preparing to publish in November a service offering for Markets+, a conceptual bundle of services that would centralize day-ahead and real-time unit commitment and dispatch and provide hurdle-free transmission service. Staff say that the offering would provide a voluntary, incremental opportunity to realize “significant” benefits for those utilities that aren’t ready to pursue full RTO membership.

SPP has been working since last year with Western stakeholders to develop proposed service offerings, transmission availability and market design, and governance structure. Staff have held three in-person development sessions with the region’s stakeholders, most recently last week in Portland, Ore. It plans a fourth in-person session in November in Phoenix. (See SPP Continues to Build on Markets+ Offering.)