New Mexico regulators have launched a process to develop “guiding principles” regarding participation in a regional day-ahead market or RTO.

The Public Regulation Commission on Thursday voted 3-0 to approve an initial order opening a docket on the matter and scheduling a workshop at 2:30 p.m. Sept. 21.

The docket will be used to investigate factors that two investor-owned utilities in the state, Public Service Company of New Mexico (PNM) and El Paso Electric (EPE), should consider when deciding whether to enter an RTO or day-ahead market. Both utilities currently participate in CAISO’s Western Energy Imbalance Market.

Following one or more informal workshops, the PRC may opt to begin a formal rulemaking process.

Commissioner Patrick O’Connell called the order “a good step forward on a very important topic.”

“This is not a trivial thing,” O’Connell said. “I think there is a lot of potential value for our customers. Getting it right is where the work is.”

The commission also gave a homework assignment to PNM and EPE in the form of questions to answer in writing on RTO and day-ahead market issues. The utilities will present their answers during the workshop.

The questions are organized under 14 topics. On the topic of reliability, the commission wants to know whether system reliability is improved by regional market participation and how a utility’s responsibility for local reliability might change.

Two questions fall under the topic of transmission. The commission has asked if participation in a day-ahead market would improve the transmission system for New Mexicans and how that would compare to joining a full RTO. A second question asks whether the regional market should require participating transmission providers to make all their capacity available to the market and what exceptions should be made.

Under the topic of market transparency and performance, the utilities will discuss the types of data that would be provided to the commission and the public to assess market performance.

On another topic, the utilities were asked to describe the impact of joining either CAISO’s Extended Day-Ahead Market or SPP’s Markets+ on “seams.”

Another question is how rural electric cooperatives can participate in the market.

With dozens of questions for the utilities to answer, the commission could decide that a series of workshops is needed, rather than a single session.

The PRC also has asked Southwestern Public Service (SPS), which is a member of SPP, to submit written comments about benefits or impacts to ratepayers resulting from RTO participation.

Other stakeholders are encouraged to participate in the process.

“Stakeholders’ comments here about what they expect to get out of regional markets will be very valuable as we try to develop the guidance principles and expectations,” Commissioner Gabriel Aguilera said.

New Mexico’s effort comes just as competition is heating up between CAISO and SPP over their respective efforts to bring day-ahead markets to the West, which likely would be a precursor to a full RTO. (See In Contest for the West, Markets+ Gathers Momentum — and Skeptics.)