SPP said Feb. 14 it has received enough commitments to support the funding necessary for Markets+’s second developmental phase, the buildout of market systems that will begin in the second quarter of this year.

The grid operator said it has received signed Phase 2 funding agreements from eight interested participants in its proposed day-ahead service offering, including Arizona Public Service, Bonneville Power Administration, Chelan County (Wash.) Public Utility District (PUD), Grant County (Wash.) PUD, Powerex, Salt River Project, Tacoma Power and Tucson Electric Power.

Powerex, the marketing and trading arm of Vancouver, British Columbia-based BC Hydro, and Chelan PUD announced their Phase 2 funding commitments in January. (See Powerex Commits to Funding, Joining SPP’s Markets+ and Chelan PUD Commits to SPP Markets+ Phase 2 Funding.)

SPP noted in a statement that the entities operate a diverse mix of generating resources and serve more than 216,000,000 MWh in the Western Interconnection’s Desert Southwest, Pacific Northwest and Mountain West regions.

“The continued engagement and support of Markets+ by Western entities has certainly driven this day-ahead market one step closer to reality during this critical time for our industry,” SPP CEO Barbara Sugg said in the statement.

SPP said it will finance the projected $150 million in implementation costs, recovering them through the Markets+ operations. Staff said they have not distributed other funding agreements and do not yet have a full list of Phase 2 participants.

“There may be more coming,” SPP spokesperson Meghan Sever told RTO Insider.

The RTO said it will post exact financial commitments for Phase 2 funding on Feb. 17. Funding obligations will be based on the participants’ load share.

Powerex and BPA were the leading funders of Phase 1, meeting obligated 20.2% and 15.2% shares, respectively, for the phase’s $9.7 million in costs. Powerex was charged $1.96 million and BPA $1.47 million.

Public Service Co. of Colorado was the only other participant with a share above 10%, being charged 12.3% of Phase 1’s cost, about $1.19 million. PSCo has not yet returned to SPP a financial commitment agreement for the next phase.

Funding shares for all Phase 2 participants have increased due to the withdrawal of some entities from Markets+ development.

The grid operator gave interested Phase 2 financial backers a Feb. 14 deadline to submit executed funding agreements, a two-month extension from its original December target. It said the agreements are vital to meeting the Markets+ launch date of 2027.

FERC approved the Markets+ tariff on Jan. 16. (See SPP Markets+ Tariff Wins FERC Approval.)

BPA Looking at $26.6M Commitment

During Phase 2, stakeholders and SPP staff will work together to develop the systems needed to operate the market and conduct market trials and parallel operations.

BPA spokesperson Doug Johnson told RTO Insider the agency’s “initial commitment could be up to $26.6 million depending on the final number of Phase 2 funding participants.” The federal agency said it still plans a March release of its draft day-ahead market policy. It will issue a final decision in May.

BPA and SPP have differed over whether the Phase 2 funding is an actual commitment to join Markets+. In a December letter, a group of U.S. senators referenced an SPP statement that asserted, “[implementation] activities cannot begin until prospective market participants execute Phase 2 funding agreements, essentially committing to join Markets+.” (See BPA Has not Made ‘Business Case’ for Markets+, NW Senators Say.)

In response, BPA Administrator John Hairston rebuffed the assertion, saying “Phase 2 funding is not a commitment to joining Markets+; it is a commitment to continue funding development of the market.”

Hairston also noted that BPA will provide $25,000 toward the West-Wide Governance Pathways Initiative’s effort to bring independent governance to CAISO’s markets, SPP’s competitor in the West. (See In Letter to Senators, BPA Tempers Markets+ Leaning.)

SPP has maintained it simply wants to give Western entities a choice in markets. Its COO, Antoine Lucas, told RTO Insider during an October interview that the debate over day-ahead markets appears to be focused on pressuring entities into a market selection, “rather than work directly with those Western entities to truly understand what their issues and concerns are, and also work to try and accommodate them and address those issues so they want to choose to be within that market.” (See SPP Sees Bias in Brattle Western Market Studies, Exec Says.)

The RTO included comments in its news release from several Phase 2 participants who expressed their support of Markets+.

Chelan PUD’s Janet Jaspers said SPP’s market “offers consensus-driven, stakeholder-led governance” and an “equitable market design” that leverages the Western Resource Adequacy Program.

“We look forward to bringing the benefits of Markets+ participation to our customers and the western region,” Salt River Project’s Josh Robertson added.