The Colorado Public Utilities Commission has issued proposed rules that would govern how it will review applications from state utilities wishing to join the various regional electricity markets being developed in the Western Interconnection. 

The rules implement a 2021 state law by setting out utility filing obligations, timelines, a legal standard of review and required PUC findings depending on the type of transmission utility, the nature of the market and relevant policy concerns based on prior commission studies, cases and comments (22R-0249E). 

The rulemaking includes 10 conditions for market participation that reflect state law and the PUC’s policies. They include grid reliability, emissions tracking, customer rate impacts and transmission expansion for investor-owned utilities. Utilities also can keep a percentage (35%, to begin with) of the savings they gain from the markets.  

PUC Chair Eric Blank said in an email to Western regulators that his agency’s primary concern is to develop a “consistent framework for tracking and accounting for [greenhouse gas] emissions” and maintain an interconnection queue process that allows winning projects to move forward in a timely manner. It also has more general concerns over rates, transmission expansion and seams. 

The commission said it is important for Colorado utilities, regulators and other stakeholders to become involved in market development before market operators submit their tariffs for FERC approval because any subsequent changes will depend on the markets’ governance structures and stakeholder processes. 

“Given these timing and other challenges surrounding the FERC approval and modification process, the best opportunity for Colorado utilities, regulators, customers, [independent power producers], clean energy advocates and others to shape the key aspects and structure of the regional market options may be prior to the FERC filings,” the PUC wrote. “Once a tariff is filed at FERC, additional changes can be challenging and time consuming to get approved and implement.” 

The PUC held a March 5 hearing on the rules and is currently gathering written feedback from interested parties. It plans a full review following the comment period, which ends April 5. 

Market Choices

Colorado utilities can participate in any of three regional markets currently planned for the West: 

• • CAISO’s Extended Day-ahead Market, which already has FERC approval and is due to go live in 2026. PacifiCorp and the Balancing Area of Northern California (BANC) are its only two committed participants so far, although the Los Angeles Department of Water and Power has signaled its intent to join. 
  • SPP’s RTO West seeks to extend the services SPP currently offers in the Eastern Interconnection. It, too, is targeted to go live in 2026 and has seven utilities evaluating whether to place their facilities under its tariff, which is expected to be filed midyear. 
  • SPP’s Markets+ and its bundle of proposed services that would centralize day-ahead and real-time unit commitment and dispatch across a large footprint in the Western Interconnection. A tariff filing is planned for the end of March. 

CAISO and SPP also both have imbalance markets operating in the interconnection. The PUC noted Colorado participants in the latter’s Western Energy Imbalance Service (WEIS) market suggest that optimizing dispatch in real time has already reduced curtailment and lowered production costs in Colorado. 

SPP has already been working with Western stakeholders to develop a market solution, best practices, rules and protocols that support the Northwest’s only cap-and-trade program in Washington. Spokesperson Meghan Sever said the RTO is reviewing the proposed rules and has been working “extensively” with the Colorado commission and utilities on GHG emissions tracking and accounting. 

“We foresee no issue complying with the proposed rule as drafted,” Sever said. “While these proposed rules are more directed toward Colorado utilities, SPP sees no barriers in our ability to comply with the proposed rule.” 

Colorado Springs Utilities (CSU) and Tri-State Generation and Transmission Association are among the state’s utilities that are evaluating SPP RTO West. Both are already members of the RTO’s WEIS market that went live in 2021. 

Steve Berry, a senior public affairs specialist with Colorado Springs Utilities, said it is premature for the utility to offer a formal position on the proposed PUC rules. 

“We’ve been an observer of the process up to this point,” he said. 

Tri-State did not return a request for comment. It has already told the PUC it intends to transition its load within the Western Area Colorado Missouri balancing area, which includes portions of Colorado, Wyoming, Western Nebraska, New Mexico and Arizona, into RTO West in April 2026.