The Bonneville Power Administration plans to issue a draft decision on its day-ahead market participation in August, followed by a final decision in November, the federal power marketing agency told stakeholders Feb. 1. 

The new timeline represents a shift from the one BPA initially set out last July when it launched a series of workshops to explore its potential participation in either CAISO’s Extended Day-Ahead Market (EDAM) or SPP’s Markets+ offering. 

At that time, the agency had targeted February 2024 for the release of a “policy direction” including a decision on whether to join any day-ahead market and a “leaning” on which of the markets it would likely choose. 

While the exact meanings of “policy direction” and “leaning” have been open questions for months, the expected content of both became somewhat clearer last week.  

BPA told stakeholders during its Feb. 1 day-ahead markets (DAM) workshop that it now plans to issue a “policy letter” in early April that will provide a “light touch” on the agency’s business case and legal authority to participate in a day-ahead market.  

The letter also will contain a “description of BPA’s strategic vision related to DAMs, including a staff recommendation on whether to pursue participation and which DAM may be the best fit for BPA at this time,” BPA said. 

In an emailed response to questions from RTO Insider, BPA spokesperson Doug Johnson said the letter “will provide a staff recommendation with an initial policy direction as to whether BPA sees value in joining a day-ahead market and, if so, which DAM option best meets its principles. BPA will include a brief description of its legal authority to participate, an initial evaluation of the value proposition and a discussion of other factors supporting its staff leaning.” 

BPA’s revised timeline now calls for the release of a “draft policy” on day-ahead market participation at the end of August, which will cover the agency’s business case and legal authority regarding participation. The draft will also “either validate BPA’s initial staff recommendation” on a market choice or “lay out an alternative direction,” the agency said. 

BPA has tentatively scheduled a public workshop on the draft policy for Sept. 19. It then plans to issue a final policy and record of decision in November.  

In the meantime, the agency said it will continue to engage with stakeholders on the day-ahead market issue. Another DAM workshop will be held in the first week of May to discuss the April policy letter, the staff recommendation and any comments received by the agency. Additional workshops are scheduled for June 5 and Aug. 6.   

Competing Concerns

The change in BPA’s timeline comes in response to the tangle of issues the agency confronts as it moves toward a decision. 

One of the thorniest relates to BPA’s “preference customers,” made up of publicly owned utilities across the Northwest, who are concerned that the agency’s deeper involvement in an organized market could compromise their rights to access low-cost power from the federal Columbia River hydroelectric system. They are seeking greater guarantees that protect their interests before BPA decides to join any day-ahead market. 

Another key issue relates to BPA’s choice of a market as CAISO and SPP compete for participants in their respective day-ahead offerings. BPA’s decision carries significant weight because it operates about 70% of the transmission in the Northwest and is the region’s largest power provider. 

It’s for that reason the agency has been under significant pressure on multiple fronts to slow down its decision-making process.  

At BPA’s second DAM workshop last September, stakeholders who support a single market for the West based on CAISO’s platform complained that the agency’s initial timeline was too aggressive. They were concerned BPA’s leaning effectively would constitute a final decision — and that the agency already was favoring Markets+.  

Key critics of the faster timeline include the environmental and consumer group Northwest Energy Coalition, as well as state energy officials from Oregon and Washington. They contend BPA should delay issuing a leaning until developments play out around the West-Wide Governance Pathways Initiative, a state-led effort to create the framework for an independent Western RTO that includes CAISO while addressing concerns about the ISO’s governance. In comments filed with BPA in November, municipal utility Seattle City Light questioned why the agency was not directly participating in the initiative given that it was designed to address many of BPA’s concerns related to CAISO governance. 

Others, including some public power representatives, have said a quick decision was necessary to ensure the agency exercised sufficient clout to shape market developments in the broader West. (See NW Stakeholders Divided on BPA Timeline for Day-ahead Decision.) 

BPA appeared to be touching the brakes on a decision during its November DAM workshop, when it told stakeholders it still would issue a policy direction during the first quarter of 2024, but that the content would change to cover the agency’s statutory authority to join a day-ahead market while also including a market leaning.  

During that meeting, Russ Mantifel, BPA director of market initiatives, acknowledged the agency still had “limited information” on which to base a market decision, saying the timing was “up in the air” in light of uncertainties around tariff timelines for EDAM and Markets+. (See Region Still Split as BPA Approaches Day-ahead Market Decision.) 

Since then, FERC has approved CAISO’s EDAM tariff and SPP has pushed back the schedule of its Markets+ tariff filing from early February. The Arkansas-based RTO now plans to put the tariff to a board vote in late March and hopes to win FERC approval within nine months, which then would allow the RTO to begin Phase II of the market’s development. (See SPP Markets+ Participants Executive Committee Briefs: Jan. 23-24, 2024.)  

‘Sufficient Information’

BPA on Feb. 1 rebuffed concerns by Oregon and Washington state agencies that the agency still lacks the information needed to support a leaning. In a slide presented during the workshop, the agency affirmed that it “will issue its initial staff recommendation regarding Bonneville’s policy direction on potential DAM participation in a letter this spring and feels it has sufficient information to do so.” 

BPA told RTO Insider the staff recommendation “will inform customers and stakeholders about its policy leaning to aid in their assessments of the changing energy landscape, provide considerations regarding potential DAM participation, inform customer product choices and operational goals, and invite discussion on other salient issues that BPA should consider when developing a more formal policy direction and issuing a record of decision in late 2024.  

“Any decision to join a DAM would be dependent on BPA rate and tariff proceedings and contract updates,” it said. 

BPA said it continues to monitor developments taking shape across the West, including efforts around the Pathways Initiative. 

“BPA staff have been assessing CAISO’s EDAM and SPP’s Market+ day-ahead market designs, public power concerns and support regarding potential participation, and considerations regarding issues such as carbon emissions reduction goals, continuing to meet environment, fish and wildlife stewardship obligations, maintaining close relationships with states and tribes, and providing service in the most economical, efficient and reliable manner,” Johnson said. “BPA has interfaced with other potential DAM participants to understand potential market footprints.”