RTO Insider reports that four Arizona utilities announced their plans to join SPP’s Markets+ day-ahead market over CAISO’s competing Extended Day-Ahead Market (EDAM). United's Brian Turner expressed cautioned saying that two Western day-ahead markets will create seams and market inefficiencies.
Four Arizona utilities announced their plans to join SPP’s Markets+ day-ahead market, a significant win for SPP after a string of victories for CAISO’s competing Extended Day-Ahead Market (EDAM).
Arizona Public Service (APS), Salt River Project (SRP), Tucson Electric Power (TEP) and UniSource Energy Services made the announcement Nov. 25.
Markets+ is expected to save the utilities nearly $100 million while enhancing reliability and supporting the addition of renewable resources to the grid, the utilities said in a joint release.
The utilities said they plan to begin Markets+ participation as soon as 2027.
“Together with our neighboring utilities, APS plans to join Markets+ to efficiently deliver energy and bolster the resilience of our shared energy grid in Arizona and across the region,” Brian Cole, APS vice president of resource management, said in a statement.
When asked about the reasons for choosing Markets+ rather than CAISO’s EDAM, an SRP spokesperson said the primary drivers are governance and resource adequacy.
The Markets+ governance structure promotes independence, transparency, inclusivity and stakeholder-driven decision-making, the spokesperson said.
The announcement comes as SPP awaits FERC’s decision on the Markets+ tariff, which initially was filed in March. FERC issued a deficiency letter in July identifying 16 problems in the tariff. (See FERC Finds SPP Markets+ Tariff ‘Deficient’ in Several Areas.)
SPP filed a response to the letter in September, addressing each issue and asking FERC to issue an order by Nov. 20.
But FERC isn’t required to abide by that request and will take “as much time as they need,” an SPP spokesperson told RTO Insider. SPP said previously it’s confident it can address concerns the deficiency letter raised.
In contrast, CAISO’s EDAM already has received FERC approval.
The Arizona utilities’ announcement of their Markets+ decision is the latest step in the evolution of two day-ahead market footprints in the West. In addition to the Arizona announcement, Bonneville Power Administration has expressed a “leaning” toward Markets+ over CAISO’s EDAM. BPA is waiting for FERC’s ruling on the Markets+ tariff before deciding. (See BPA Execs Lay out Markets+ Benefits, Risks, Reasons.)
Brian Turner, who leads Advanced Energy United’s regulatory engagement in the West, said AEU is pleased that Arizona utilities are “embracing broader energy markets,” which have the potential to bring customer benefits including greater reliability and affordability.
But Turner said the Arizona announcement is “bittersweet,” as having two Western day-ahead markets will create seams and market inefficiencies.
As the market footprints are now developing, Markets+ could end up with a “big fat seam” in Northwest-Southwest trade caused by NV Energy and California entities joining EDAM, Turner said in an interview.
And the Arizona utilities are giving up known benefits of their participation in CAISO’s Western Energy Imbalance Market (WEIM) in exchange for unknown potential benefits of Markets+, he added.
But how the Western day-ahead markets ultimately take shape remains to be seen.
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