Expanding Economies: A Focus on Construction and Trade in the Western World

The next phase of Markets+, a groundbreaking initiative designed to revolutionize energy trading in the western United States, is now in motion. The focus is on implementation and collaboration with utilities to construct and test the technical prerequisites for participation.

Markets+ is an evolution of existing energy imbalance markets, such as the Western Energy Imbalance Service operated by the Southwest Power Pool (SPP) and the Western Energy Imbalance Market run by the California Independent System Operator (CAISO).

The expansion of Markets+ has not been without controversy. Five consumer advocate groups have filed a lawsuit against the Bonneville Power Administration (BPA) for its decision to join the initiative. Meanwhile, Xcel Energy's Public Service Co. of Colorado has indicated plans to seek state regulatory approval to participate in Markets+, subject to a few conditions.

Traditionally, the American West has operated with individual utilities relying on bilateral contracts for power trading, in contrast to the organized markets prevalent in the eastern United States. However, Markets+ promises to introduce a day-ahead and real-time market, a significant shift towards a more integrated system.

Carrie Simpson, Director of Market Operations for the SPP, likened the current phase of Markets+ to the construction process. "We've drafted the plans for the house," she said, "but now we've got to go build the house to live in it."

Bonneville Power Administration, Chelan County PUD, Grant County PUD, Powerex, and Tacoma Power have pledged their support for the Markets+ market buildout, starting in Q2 2025. The initiative is expected to launch in 2027.

One of the key benefits of Markets+ is its potential to facilitate the movement of clean energy across different regions, reducing the need for curtailment. For instance, excess energy generated in the desert southwest could potentially be sold to states like Colorado.

Participation in Markets+ is expected to bring enhanced reliability and savings of nearly $100 million above current market participation. Four utilities, Arizona Public Service, Salt River Project, Tucson Electric Power, and UniSource Energy Services, have announced their intention to join Markets+, starting in 2027.

However, the competition between Markets+ and CAISO's Extended Day-Ahead Market reflects growing support for broader changes to the western electricity landscape, partially attributed to the energy transition. Public Service Co. of New Mexico has committed to joining CAISO's Extended Day-Ahead Market, which competes with Markets+.

The competition between these two initiatives has raised questions. Arizona Corporation Commissioner Kevin Thompson has publicly questioned whether Arizona's four major utilities may have erred in choosing Markets+ over CAISO's alternative.

For a deeper insight into the Markets+ expansion, listeners can tune into the With Great Power podcast, where Carrie Simpson discusses the initiative in detail. It's an exciting time for the western energy sector, as these changes promise to bring about a more efficient, cleaner, and more integrated power grid.

Unfortunately, further details about the additional Western grid operators supporting Markets+ by Q2 2025 remain undisclosed.

Markets+ recognizes the unique characteristics of western utilities and has adapted an existing marketplace tariff from the East to meet the needs of the West. The initiative's launch in 2027 is eagerly anticipated by those in the energy sector, as it promises to usher in a new era of energy trading in the American West.