Four Arizona utilities announced their plans to join SPP’s Markets+ day-ahead market, a significant win for SPP after a string of victories for CAISO’s competing Extended Day-Ahead Market (EDAM). 

Arizona Public Service (APS), Salt River Project (SRP), Tucson Electric Power (TEP) and UniSource Energy Services made the announcement Nov. 25. 

Markets+ is expected to save the utilities nearly $100 million while enhancing reliability and supporting the addition of renewable resources to the grid, the utilities said in a joint release. 

The utilities said they plan to begin Markets+ participation as soon as 2027. 

“Together with our neighboring utilities, APS plans to join Markets+ to efficiently deliver energy and bolster the resilience of our shared energy grid in Arizona and across the region,” Brian Cole, APS vice president of resource management, said in a statement. 

When asked about the reasons for choosing Markets+ rather than CAISO’s EDAM, an SRP spokesperson said the primary drivers are governance and resource adequacy.   

The Markets+ governance structure promotes independence, transparency, inclusivity and stakeholder-driven decision-making, the spokesperson said.  

And Markets+ will adhere to a single, shared resource adequacy program — the Western Resource Adequacy Program — providing a consistent method to make sure enough resources are available to reliably serve load across the Markets+ footprint. 

“It also ensures that all market participants contribute fairly to the reliability of the market footprint, preventing any participants from systemically leaning on others,” the SRP spokesperson said. 

SRP expects a critical mass of entities joining Markets+ in spring 2027, and SRP will sign an implementation agreement before the market goes live. 

Tariff Decision Pending

The announcement comes as SPP awaits FERC’s decision on the Markets+ tariff, which was initially filed in March. FERC issued a deficiency letter in July identifying 16 problems in the tariff. (See FERC Finds SPP Markets+ Tariff ‘Deficient’ in Several Areas.) 

SPP filed a response to the letter in September, addressing each issue and asking FERC to issue an order by Nov. 20.  

But FERC isn’t required to abide by that request and will take “as much time as they need,” an SPP spokesperson told RTO Insider. SPP said previously it’s confident it can address concerns the deficiency letter raised. 

In contrast, CAISO’s EDAM has already received FERC approval. 

A TEP spokesperson said the company fully expects FERC to approve the Markets+ tariff, while acknowledging the approval can be an “iterative process,” a comment echoed by SRP. 

“We will continue to work with FERC and SPP throughout the process in demonstrating the value this direction will bring to our customers,” the TEP spokesperson said. 

FERC approval of the tariff will mark the start of a second phase of Markets+ development. 

“SPP thanks all Markets+ stakeholders for their engagement and collaboration in phase one development and looks forward to their continued involvement,” Antoine Lucas, SPP vice president of markets, said in a statement provided to RTO Insider. “We eagerly anticipate receiving signed phase two commitments by the end of the year so we can continue to work together to build a market that provides benefits for all western entities.” 

Footprints Taking Shape

The Arizona utilities’ announcement of their Markets+ decision is the latest step in the evolution of two day-ahead market footprints in the West. In addition to the Arizona announcement, Bonneville Power Administration has expressed a “leaning” toward Markets+ over CAISO’s EDAM. BPA is waiting for FERC’s ruling on the Markets+ tariff before deciding. (See BPA Execs Lay out Markets+ Benefits, Risks, Reasons.) 

Although Powerex has not yet made a formal commitment to a day-ahead market, it has clearly signaled an intention to join Markets+ and to not join EDAM. 

The Arizona announcement “is a clear indication of the value that many utilities are seeing in the Markets+ day-ahead market option,” Lauren Tenney Denison, director of market policy and grid strategy at the Public Power Council (PPC), said in an email to RTO Insider. 

The Portland-based PPC, a trade group representing the extensive network of Northwest publicly owned utilities that buy low-cost power from the Bonneville Power Administration, has been a consistent advocate of BPA choosing Markets+ over CAISO’s EDAM. (See Northwest Public Power Group Endorses Markets+ over EDAM.) 

“As a participant in the development of Markets+, PPC has appreciated the collaboration we have had with these Arizona utilities and the shared goals we have for a well-designed, well-governed day ahead market option,” Tenney Denison said. 

Meanwhile, EDAM scored its latest win this month with Public Service Company of New Mexico’s announcement of its plans to join the CAISO market. (See PNM Picks CAISO’s EDAM.) 

PacifiCorp, Portland General Electric and Balancing Authority of Northern California have signed EDAM implementation agreements with CAISO and the list of entities expected to join EDAM has grown to include NV Energy, Idaho Power and Los Angeles Department of Water and Power.  

In October, the Western Area Power Administration’s Desert Southwest (DSW) Region said it would cooperate with Arizona G&T Cooperatives on a study examining the potential benefits of DSW joining EDAM. DSW this year withdrew from the second phase of developing Markets+ after determining it would realize few benefits from participating in that market. (See Arizona G&T Cooperatives Announces Pursuit of EDAM Benefits Study.)    

After NV Energy announced its intent in May to join EDAM, Advanced Energy United issued a statement encouraging other entities, especially those in the Southwest, to join EDAM. The industry association said EDAM was becoming “the most viable day-ahead market.” 

Brian Turner, who leads Advanced Energy United’s regulatory engagement in the West, said AEU is pleased that Arizona utilities are “embracing broader energy markets,” which have the potential to bring customer benefits including greater reliability and affordability. 

But Turner said the Arizona announcement is “bittersweet,” as having two Western day-ahead markets will create seams and market inefficiencies.  

As the market footprints are now developing, Markets+ could end up with a “big fat seam” in Northwest-Southwest trade caused by NV Energy and California entities joining EDAM, Turner said in an interview. 

And the Arizona utilities are giving up known benefits of their participation in CAISO’s Western Energy Imbalance Market (WEIM) in exchange for unknown potential benefits of Markets+, he added. 

But how the Western day-ahead markets ultimately take shape remains to be seen. 

“Things are still very dynamic,” Turner said. 

Robert Mullin contributed to this article.