The Southwest Power Pool’s plan to launch its Markets+ market in the West drew support, opposition and recommended changes from utilities, state regulators and other stakeholders, in Monday filings at the Federal Energy Regulatory Commission.
One of the main concerns is how to manage the seams that would be created between the Markets+ footprint and the pending Extended Day-Ahead Market set to be run by the California Independent System Operator, as well as with other balancing authorities.
Other concerns include a lack of clarity about some aspects of the plan, its greenhouse gas tracking provisions and inadequate ratepayer representation in the market’s governance structure, according to comments.
Late last month, SPP asked FERC to approve its Markets+ market, which includes day-ahead and real-time energy and flexibility reserve product markets, carbon pricing and congestion rent models, along with a transmission coordination model. SPP aims to launch the market for the West in 2027.
Markets+ garners utility support
Arizona utilities Salt River Project, Tucson Electric Power and Arizona Public Service urged FERC to approve SPP’s proposal.
“Markets+ has great potential for customer cost savings and enhanced reliability,” APS said. “These benefits are enabled through ISO/RTO market-like features existent in the market design adopted by Markets+.”
The proposal includes an independent governance structure that facilitates equitable representation for market participants and stakeholders, the Phoenix-based utility said. It also includes key reliability features such as adopting the Western Resource Adequacy Program as a common resource adequacy structure for market participants, according to APS.
APS said that Markets+ will improve the efficiency of market seams by producing a market solution using a flow-based dispatch to optimize unit commitments and dispatch between market participants. Seams between balancing authority areas will exist in the West even if there is only one day-ahead market, according to APS.
“If Markets+ is not approved, APS and other entities may determine that continuing with only real-time market participation is the best option and refrain from joining a day-ahead market,” the utility said. APS currently participates in the real-time Western Energy Imbalance Market.
Public Service Co. of Colorado and the Public Power Council, which represents municipal utilities, public utility districts and electric cooperatives, also supported SPP’s proposal.
Nick Myers, Arizona Corporation Commission commissioner, urged FERC to approve the Markets+ proposal.
“With the inclusion of an independent governance structure, Markets+ makes it possible for the interests and concerns unique to Arizona to fairly influence the trajectory of the market moving forward,” Myers said. “The Markets+ tariff strikes a balance by adopting a market design that enables states with GHG regulations to meet their identified goals without holding market participants in other states to the same GHG policy requirements.”
SPP’s market monitor “generally supports” Markets+, but has several concerns about the proposal, including its GHG provisions, physical withholding exemptions and potential exceptions to the data that the monitor has access to.
Clean energy trade groups — American Clean Power Association, Advanced Power Alliance, Colorado Solar and Storage Association and Solar Energy Industries Association — supported SPP’s proposal, saying it would make generation and transmission use more efficient and bolster grid reliability.
Earthjustice, others oppose plan
However, in a joint filing, Earthjustice, Natural Resources Defense Council, NW Energy Coalition, Sierra Club, Sustainable FERC Project, Western Grid Group and Western Resource Advocates said FERC should reject SPP’s proposal without prejudice to give the grid operator more time to refine it.
SPP rushed its market development process, which it shortened to nine months from an initial 21 month estimate, according to the groups. The proposal leaves some key issues unresolved, making it hard to assess if it is just and reasonable, the coalition said.
Some parts of the proposal aren’t just and reasonable, such as how it accounts for state GHG policies and how SPP will handle “high priority” imports and exports between the market footprint and neighboring balancing authorities, the groups said.
Further, the proposal’s governance provisions are “so severely lacking” around transparency and accountability that FERC cannot approve it, according to the coalition. The governance structure is biased towards Eastern market participants, the groups said.
“The SPP board has ‘ultimate oversight authority’ over the Markets+ market, and thus policies and tariff rules that apply to the [Western] market participants and stakeholders, including the ultimate beneficiaries, electricity consumers in the West,” the coalition said.
Renewable Northwest asked FERC to order SPP to evaluate market seams issues as the market configuration becomes more clear in the West; report to the commission on potential harm from the seams; and implement agreements with CAISO and others on managing power flows across the seams before the Markets+ market starts.
Call to boost ratepayer role
The Colorado Office of the Utility Consumer Advocate said FERC should ensure that utility participation in Markets+ results in no net increase in retail electricity rates or bills for residential and small commercial consumers.
The office called for elevating the role of ratepayer advocates in the Markets+ proposed governance structure. FERC should require the market to provide a dedicated funding stream to create a regional consumer office that would support state consumer advocates’ representation, according to the Colorado ratepayer advocate’s office.
Also, state ratepayer advocates should have unrestricted access to all data and reports from the SPP’s market monitor, the office said.
