The Bonneville Power Administration is pulling back from its ambitious schedule for choosing which Western day-ahead market it will join, officials with the federal power marketing administration said during a workshop Nov. 29.
When BPA launched its process for deciding between the markets in July, staff said it would propose a “policy direction” in the form of a “record of decision” on the issue shortly after SPP filed its Markets+ tariff with FERC in February, following a series of five stakeholder workshops.
The decision would cover two points: whether BPA would participate in a day-ahead market, and which of the two it would join, staff said. (See Regulators Propose New Independent Western RTO.)
Some industry stakeholders criticized the timeline for being overly aggressive and expressed concerns that the timing of the decision suggested an implicit bias in favor of Markets+. Others said the pacing was necessary to ensure that BPA — and the Northwest at large — had a strong influence on the direction of electricity market developments in the West. (See NW Stakeholders Divided on BPA Timeline for Day-ahead Decision.)
The critics may have partly gotten their wish during BPA’s fourth workshop on the issue, when agency officials revealed that while they’ll be sticking to the original timeline for issuing a decision in the first quarter of 2024, they intend to alter the content of that decision.
That record of decision is now likely to cover whether BPA has the statutory authority to join a day-ahead market, while potentially conveying a “leaning” on what market the agency is favoring by that time, Russ Mantifel, the agency’s director of market initiatives, said during the workshop.
Mantifel acknowledged the level of uncertainty around the issue and said BPA still has “limited information” on which to base a decision.
“I would say that the timing of this is still up in the air, right? Like, there’s literally no market that somebody could join. Right now, EDAM has not been approved. There’s no tariff yet for Markets+,” he said, pointing out that SPP is still surveying potential participants on “even what it would look like to start making the commitment” to that market.
Mantifel pointed to other, internal matters that BPA must deal with before making a decision on whether to join a market, including the impact on its rates, tariffs and contracts with power and transmission customers.
“I think it’s fair to expect that that policy direction will establish our authority to join a market and will establish the business case for pursuing a market,” Mantifel said.
“Our customers and regional leaders have expressed to us the importance that our market engagement needs to be consistent with our statutory obligations. We’re right there with you,” said Suzanne Cooper, BPA senior vice president of power services.
Cooper pointed to another factor that might be prompting BPA to ease up its timeline: stakeholder requests that the agency more deeply evaluate the “cost advantages” of a single Western market.
In that vein, she said, the agency continues to monitor developments around the West-Wide Governance Pathways Initiative (WWGPI), which seeks to establish an independent entity to oversee an RTO that would include CAISO and build on the grid operator’s existing market services without subjecting non-California members to the ISO’s state-run governance. BPA has not been participating in that effort. (See West-Wide Governance Pathway Group Digs into its Work.)
“We have heard and definitely acknowledge the requests that we’ve heard for taking some more time for additional analysis and to allow the Pathways concept to develop,” Cooper said. “We’ve heard also from many entities, including within our public power customers, that desire for BPA to maintain our current timeline.”
To Lean or Not to Lean
A representative from a key group representing many of those public power customers asked BPA for more clarity on the process that will follow the first record of decision.
Lauren Tenney Denison, director of market policy and grid strategy at the Public Power Council (PPC), noted that in the “multiphase” process that BPA followed in its decision to join CAISO’s Western Energy Imbalance Market, “it was pretty clear what was being decided and what was still open for discussion.”
“What is the expected action that will happen after the leaning is issued at the end of this process?” Denison asked.
“I think that is still up in the air,” Mantifel said. “The processes for joining the markets themselves are still somewhat fluid as opposed to EIM.”
Fred Heutte, senior policy associate at the Northwest Energy Coalition, advised BPA not to include a “leaning” in the first record of decision. NWEC has been a consistent advocate for a single Western market that includes California.
Reading from comments that NWEC submitted to BPA a day earlier, Heutte said, “The BPA day-ahead market policy should provide principles and a road map for assessment, analysis and modeling to inform BPA’s decision about joining a day-ahead market. Given the wide range of implications for market selection, we strongly urge BPA not to proceed with a leaning on day-ahead market choice at this time.
“We feel that any leaning, whichever direction this goes, not be included with day-ahead market policy, because it really belongs with the decision process.”
Mike Linn, director of market analytics at the PPC, took the opposite view.
“We think that because of the nature of Bonneville’s system, Bonneville’s decision or leaning would be very informative to other Western prospective participants, and [I] just want to kind of re-emphasize that we do think that is a key element and something to include.”
Mantifel defended BPA’s inclusion of the leaning.
“I worry that just making a statement generally about a day-ahead market without recognizing the reality of the fact that there are two options that people are making decisions on … might not reflect the practical reality that entities are facing at this point in time in terms of needing to be in a position to make commitments,” he said.
The Nov. 29 meeting left lingering question about exactly what BPA will provide to stakeholders in the first quarter of 2024.
“BPA is on track to issue a proposed policy decision with respect to participation in day-ahead markets early next year,” agency spokesperson Doug Johnson told RTO Insider. “BPA indicated that it would continue to address stakeholder comments in its public process to evaluate day-ahead market participation.”
Johnson said BPA has “committed to provide a timeline of what decisions would be made and when because some decisions would take place in different processes, such as our rates and tariff proceedings.”
BPA tentatively plans to hold its final day-ahead workshop Feb. 1, but the date is subject to change.
(Editor’s Note: This article was originally titled “BPA Delays Decision onDay-ahead Market Choice.” BPA requested the title be changed to reflect the fact that the agency still intends to issue a proposed policy direction related to day-ahead markets in early 2024.)