The Bonneville Power Administration plans to contribute its full share of funding for Phase 2 of SPP’s Markets+, an executive with the federal power agency has said. 

“BPA intends to continue its funding of the development of Markets+ as we proceed with our public process,” BPA Vice President of Bulk Marketing Rachel Dibble said in a statement emailed to RTO Insider. “As outlined in our staff recommendation in April, Bonneville sees many benefits for its customers and the Pacific Northwest in SPP’s Western day-ahead electricity market, particularly its independent governance model.”  

BPA used similar language when it announced Aug. 26 that it would postpone until next year its decision between Markets+ and CAISO’s Extended Day-Ahead Market (EDAM), but it was unclear at the time whether the agency’s mention of continued support for the SPP day-ahead market included a commitment to funding its share of the estimated $150 million price tag for the Phase 2 implementation stage of the market, which is scheduled to begin in 2025. (See BPA Postpones Day-ahead Market Decision Until 2025.) 

“We are currently reviewing and negotiating Phase 2 funding agreements with SPP as are other utilities and participants. Ultimately, ensuring the viability of two day-ahead market options remains a key principle of our evaluation and decision process,” Dibble said.

A Sept. 5 article in the  Portland Business Journal article quoted Dibble as saying BPA estimates its Phase 2 costs will come to about $25 million.  

According to an SPP document dated July 31, BPA would be responsible for 17.4% of Phase 2 funding, second only to Powerex at 23.2%. Those percentages are likely to increase slightly after two Black Hills Energy utility subsidiaries recently committed to leave SPP’s Western Energy Imbalance Service to join CAISO’s Western Energy Imbalance Market, indicating their likely withdrawal from Markets+ development efforts. (See CAISO’s WEIM Plucks Black Hills Utilities from SPP’s WEIS.)  

Controversy Accompanies Funding Decision

BPA’s decision on whether to continue funding Markets+ represents yet another flashpoint in the already politically fraught atmosphere that has materialized around its process for choosing between Markets+ and EDAM.  

The controversy has risen into the upper reaches of U.S. politics, with all four Democratic U.S. senators from Oregon and Washington in July sending BPA Administrator John Hairston a letter urging the agency to delay its day-ahead market decision until more developments play out around the two markets. That letter reflected many of the concerns of Northwest supporters of the EDAM, who fear BPA is moving too quickly in the direction of Markets+. (See NW Senators Urge BPA to Delay Day-ahead Market Decision.) 

But BPA also faces pressures from below — in the other direction. A large contingent of BPA’s base of “preference” customers — the Northwest publicly owned utilities that rely on the federal Columbia River hydroelectric system for low-cost power — has urged the agency to stay the course and continue funding Markets+ into its implementation phase and ultimately join the market. (See Northwest Public Power Group Endorses Markets+ over EDAM.)  

Last month, 47 of those utilities collectively sent their own response to the letter from the Northwestern senators, asking the delegation to consider the impact of BPA’s day-ahead market decision on the region’s consumer- and tribal-owned utilities and cautioning them against applying pressure that could delay BPA’s funding for Phase 2.  

In a similar vein, Washington-based investor-owned utility Puget Sound Energy independently sent a letter to Washington Sens. Patty Murray and Maria Cantwell saying competition between the two markets “is proving beneficial for participants” and warning that “delaying market decisions will have the consequence of delaying real economic benefits to customers across the region.” 

On the other side of the debate, in conversations with RTO Insider, Northwest-based supporters of the EDAM have questioned the soundness of BPA committing so much funding to Markets+ ahead of other developments. Chief among them is the continued progress of the West-Wide Governance Pathways Initiative in moving CAISO’s markets toward more independent governance — something BPA and other Markets+ supporters view with skepticism. (See related story, ‘Leaning’ Evident in BPA Response to NW Senators.) 

One source, who is not authorized to speak on behalf of their organization, also pointed to the fact that, unlike the EDAM tariff, the Markets+ tariff still is in limbo after SPP’s filing received a deficiency notice in July covering 16 items. That source pointed out the notice contained a number of substantive issues for SPP to address, including important details the RTO assumed could go into the market’s business practice manual or protocols, but that FERC might require be included in the tariff itself.  

For its part, SPP had expressed confidence it can address FERC’s concerns about the Markets+ tariff. (See SPP Dispels Concerns over Markets+ Deficiency Letter.)