Powerex said Jan. 21 that it will fund the next phase of SPP’s Markets+ and “re-affirmed” its commitment to joining the Western real-time and day-ahead offering, a move the company signaled as early as November 2023 — before the start of the extensive stakeholder process to develop the market. 

The announcement by Powerex, the marketing and trading arm of Vancouver, British Columbia-based BC Hydro, comes on the heels of another positive development for SPP in its competition for participants with CAISO’s Extended Day-Ahead Market (EDAM)/Western Energy Imbalance Market (WEIM): FERC’s approval of the Markets+ tariff. (See SPP Markets+ Tariff Wins FERC Approval.) 

“Powerex has greatly appreciated the collaboration of a diverse group of stakeholders who have invested countless hours over multiple years, with SPP providing facilitation and market expertise to aid in this effort,” Powerex CEO Tom Bechard said in a statement. “The end result is a fair, robust and durable initial market design built upon an inclusive and independent governance structure from the outset.” 

The announcement also follows by two months the first formal commitments to Markets+ by Arizona’s four largest utilities, including Arizona Public Service, Salt River Project, Tucson Electric Power and UniSource Energy Services. (See 4 Arizona Utilities Commit to Joining Markets.) 

“We are pleased to hear of Powerex’s commitment to join Markets+ phase two, and we look forward to continued collaboration with Powerex and other entities as we work together to build a Western market that will reduce costs for members, improve reliability and help members reach their renewable integration goals,” Antoine Lucas, SPP vice president of markets and incoming COO, said in an email to RTO Insider. 

FERC’s Jan. 16 decision approving the tariff opened the door for Markets+ backers to begin making formal participation commitments and provide the $150 million investment needed to fund the market’s Phase 2 implementation stage. 

According to an SPP spreadsheet posted to the RTO’s site Oct. 24, 2024, Powerex will be the single largest funder of Phase 2, responsible for 23.2% under the most likely market footprint scenario, equating to around $34.8 million.  

“Our share of Phase 2 is not yet finalized and will depend on who ultimately signs on,” Jeff Spires, director of power at Powerex, said in an email, adding that 23.2% “seems like a reasonable estimate based on participation in Phase 1.” 

“SPP is using a funding mechanism for Phase 2 similar to Phase 1 for determining each participant’s share of the Phase 2 implementation costs,” Lucas said. 

The Bonneville Power Administration, which has not finalized its funding commitment, would be the second-largest contributor, at about $25 million, or 17.4%. The federal power agency recently said it “is actively working with SPP and all other Markets+ participants on finalizing Phase 2 funding agreements.” 

In its statement, Powerex noted that a market footprint that includes much of the Northwest (BPA was not explicitly mentioned), the Arizona utilities and — likely — Xcel Energy-Colorado “will have substantial resource and load diversity, enhancing the benefits for all participants.” 

“This expected diversity includes an extensive hydro fleet in the Northwest, growing solar supply in the Southwest as well as expanding wind resources in the Northwest, Southwest and Rockies western subregions,” the company said. “The Markets+ footprint will also have both winter-peaking and summer-peaking utilities, further enhancing the opportunities for mutually beneficial trade.” 

Powerex said it also is “actively pursuing investments in transmission expansion efforts” to help support connectivity across Markets+. 

Markets+ Supporter, EDAM Critic

In nearly equal measure, Powerex has been one of Markets+’s most ardent supporters and one of CAISO’s harshest critics, having previously stated it had no intention of joining EDAM under any circumstances. 

The company has been a consistent critic of CAISO’s state-backed governance structure and an outspoken skeptic of the ISO’s dual roles as operator of and participant in the EDAM/WEIM, contending that CAISO market practices don’t provide equal treatment to non-California participants — all complaints CAISO and EDAM supporters in the Northwest have contested.  

In that capacity, Powerex has been a key contributor to the series of “issue alerts” Markets+ backers have been publishing since summer 2024 to compare key features of Markets+ and EDAM, covering such issues as governance, market operations, market design and market seams. 

In its Jan. 21 statement, Powerex said it “evaluated its decision to fund and join Markets+ based on three equally important pillars: independent governance, an impartial market operator and sound market design. These three pillars are critical to ensure equitable outcomes for all participants and ratepayers across the market’s footprint.”  

Powerex was one of the first entities to weigh in on the debate over CAISO’s response as WEIM operator during the January 2024 cold snap in the Northwest, which pushed a handful of the region’s balancing authority areas to the brink of rolling blackouts in the face of power supply shortages. 

The company criticized how CAISO distributed the high transmission congestion revenue rents resulting from the event, questioned California’s role in supplying its northern neighbors and even offered a recommendation that the Northwest use existing transmission to increase import capability directly from the Southwest and Rocky Mountain regions to circumvent flowing power through CAISO’s territory. (See Powerex Report Expands NW Cold Snap Debate.) 

The persistent debate around the cold snap prompted CAISO to respond eventually with its own rebuttal. (See CAISO Seeks to Dispel CRR ‘Myths’ Around January Cold Snap.) 

More recently, Powerex published its own analysis questioning the soundness of a Brattle Group comparative study that found Northwest utilities as a whole would financially benefit more from participating in EDAM than in Markets+. (See Powerex Contests Brattle’s EDAM/Markets+ Comparative Study.) 

In June 2024, clean energy industry group Renewable Northwest released a study contending that Powerex was backing Markets+ because the company would benefit more financially from a West divided into multiple markets than a single market that included California. The study was conducted by Grid Strategies. (See Group Claims Powerex Backing Markets+ to Benefit from Divided West.)  

At the time, Spires told RTO Insider the intent of the study “appears to be to distract from the essential governance and market design elements that differentiate the two day-ahead market options.” 

With Powerex’s announcement, the attention of participants in Western electricity market developments will return to BPA, which says it will issue a draft day-ahead market decision in March and a final decision in May.