More than two dozen Western electricity sector entities sent a letter to SPP expressing support for the continued development of the RTO’s Markets+, which is competing for participants with CAISO’s Extended Day-Ahead Market (EDAM). 

The April 12 letter from the 26 entities, addressed to SPP CEO Barbara Sugg, arrived nearly three weeks after the RTO filed the Markets+ tariff with FERC and two weeks after Bonneville Power Administration staff issued a tentative recommendation that the federal agency choose Markets+ over EDAM. (See SPP Files Proposed Markets+ Tariff at FERC and BPA Staff Recommends Markets+ over EDAM.) 

“We collectively appreciate the effort and process that has resulted in the filing of the Markets+ tariff, and we look forward to participating in the ongoing development of the protocols and other market details,” the organizations said. 

SPP noted that the signers include organizations from the Pacific Northwest, Desert Southwest and Mountain West and represent about 57 GW of peak demand across 10 states and one Canadian province. 

“SPP is proud to receive support from a broad and diverse group of stakeholders across the Western Interconnection for the continued development of Markets+,” Vice President of Markets Antoine Lucas said in a statement issued April 15. 

Twelve of the U.S.-based signatories represent balancing authorities that will face a choice between the two day-ahead market offerings. They include Arizona Public Service, Avista, BPA, NorthWestern Energy, Public Service Company of Colorado, Puget Sound Energy, Salt River Project, Tacoma Power, Tucson Electric Power, and the Chelan, Douglas and Grant county public utility districts in Washington state. Another, Powerex, is the marketing arm for BC Hydro, the BA for the province of British Columbia. 

The other signers consist mostly of publicly owned utilities in the Northwest, most of which are in BPA’s BA area, as well as Tri-State Generation and Transmission Association, whose members span four states, three of which are in the Western Interconnection. 

The letter highlighted the “preferred aspects” of Markets+ for the signatories. Key among them is the market’s “independent, inclusive and robust governance structure,” a point BPA staff heavily emphasized in its recommendation. 

“As most of us were Phase 1-funding participants of Markets+, we have seen first hand the benefits and importance of the Markets+ governance structure. Critically, Markets+ has had independent governance from Day 1, including the establishment of an Interim Markets+ Independent Panel,” the organizations said. 

They also lauded SPP’s “stakeholder-driven decision-making” process, for which RTO staff provide a supporting role but do not lead. Some Northwest stakeholders have criticized CAISO for its more staff-driven stakeholder process, saying it creates a bias in favor of California interests. 

“We believe that the Markets+ framework would provide a level playing field for participants at the outset,” they said. 

WRAP Integration

The organizations also praised the fact that Markets+ will require participants to take part in a common resource adequacy framework, the Western Power Pool’s Western Resource Adequacy Program. 

“This requirement would help ensure that there are adequate resources to reliably serve load throughout the footprint and that such resources are installed and/or secured well ahead of market operations. It would also ensure that all market participants are equitably contributing to the reliability of the market footprint and that no participants are systemically leaning on others,” they said. 

They also noted that many of them “express specific support for the concept of the Markets+ design choice to deliver congestion rents to those participants with monthly or longer firm transmission rights, including both network service and point-to-point transmission rights.” 

The congestion rent mechanism would provide two benefits, they said. 

“First, it could help ensure equitable outcomes for firm transmission customers by providing the appropriate revenues (or hedges) to each customer on a path-specific basis. Second, it could create an appropriate ongoing investment incentive for firm transmission service, which helps protect transmission providers’ main source of revenue, preventing cost shifts between customers,” they said. 

They pointed favorably to other aspects of the Markets+ tariff, including “a must-offer requirement ensuring resource sufficiency that supports market liquidity and reliability,” treatment of greenhouse gases “that supports state requirements” and “prioritization of load service inside the Markets+ footprint over low-priority exports.” 

“We’re glad to see Western entities base their support on characteristics of our market design that we think make Markets+ a wise choice for the West, including enhanced system reliability, the affordability of wholesale energy, support for goals related to sustainability and equity in everything from governance to market pricing,” SPP’s Lucas said. 

The letter did not indicate financial commitments for the second phase of developing Markets+. 

“Each of us have different requirements around our decision process regarding moving forward with participation in a day-ahead market, and some of the undersigned stakeholders do not expect to make decisions about funding and joining a day-ahead market until the end of this calendar year,” the signatories wrote. 

Thirty-six entities participated in Phase 1 of Markets+.