SPP’s Markets+ notched another in a string of successes Jan. 22 after the Chelan County Public Utility District in Washington said it will pay its $1 million to $2 million share of funding for the market’s Phase 2 implementation stage.
The announcement by the Wenatchee-based publicly owned utility (POU) came just a day after the biggest Markets+ funder, Powerex, committed to joining the market and providing its funding share, estimated to be about $34.8 million. (See Powerex Commits to Funding, Joining SPP’s Markets+.)
Powerex’s move followed FERC’s Jan. 16 approval of the Markets+ tariff, which opens the door for other such moves by backers of the market. (See SPP Markets+ Tariff Wins FERC Approval.)
Chelan spokesperson Rachel Hansen said the PUD’s announcement covered only funding for Phase 2 and did not constitute a commitment to participating in the market.
“Joining the market will be a separate decision,” Hansen told RTO Insider in an email.
In a statement accompanying the announcement, Chelan General Manager Kirk Hudson echoed a point the Bonneville Power Administration has made in defending its intention to contribute its own $25 million share of Markets+ funding before a participation commitment: that the investment is necessary to ensure that Western utilities have a viable alternative to CAISO’s Extended Day-Ahead Market (EDAM).
“It’s in our customer-owners’ interest to ensure that a day-ahead and real-time market option exists that features independent governance, encourages investment in resource adequacy and appropriately values hydropower,” Hudson said.
And like BPA, Hudson referred to the fact that Northwest utilities will inevitably face a need to participate in an organized day-ahead market.
“The success of wholesale power markets is critical to keeping rates low for Chelan PUD’s customer-owners. All around us, we see changes to the region’s electric system that will affect how utilities buy and sell power, including a shift to organized electricity markets,” he said.
Chelan is not a participant in CAISO’s real-time Western Energy Imbalance Market.
According to a spreadsheet posted on SPP’s website on Oct. 24, 2024, Chelan would be responsible for funding 0.7% of the estimated $150 million cost for Phase 2, based on the most likely Markets+ footprint scenario. SPP has told RTO Insider that it is using a funding mechanism similar to that of Phase 1 to calculate each participant’s share of the Phase 2 implementation costs.
As competition between Markets+ and EDAM has ramped up over the past year and a half, Chelan has been solidly aligned with the majority of BPA’s base of POU “preference” customers who have urged the agency to join Markets+ and asked federal officials to respect its independence in making a day-ahead market decision. (See Public Utilities Urge DOE to Respect BPA’s Day-ahead Decision Process.)
And along with Powerex and a handful of other utilities in the Northwest and Southwest, Chelan has been a consistent contributor to the series of “issue alerts” published by Markets+ backers that have favorably compared features of the SPP market with those of the EDAM.
Despite its status as a BPA preference customer, Chelan manages its own balancing authority area in Central Washington, operates 300 miles of transmission and controls a combined nameplate capacity of 2,037 MW from the Rocky Reach, Rock Island and Lake Chelan hydroelectric dams.
The utility serves about 49,000 customers in a territory covering nearly 3,000 square miles.
