Bonneville Power Administration staff is recommending that the federal power marketer join the Southwest Power Pool’s Markets+ initiative instead of the California Independent System Operator’s planned day-ahead market, according to a policy paper released Thursday.

“Ongoing concerns with governance and some superior features related to greenhouse gas accounting and resource adequacy among others led to staff’s preference for Markets+,” Russ Mantifel, BPA director of market initiatives, said in a press release.

The BPA’s final decision, expected in November, will have a major effect on market development in the West. It sells wholesale power from federal hydroelectric dams in the Northwest and other resources, totaling about 27 GW of firm annual energy supply. The federal power marketer also operates about 15,000 circuit miles of high-voltage transmission across the Northwest. The BPA mainly sells its power to cooperative and municipal utilities, and public power districts.

In an initial finding, BPA staff said a cost-benefit study conducted for the Western Markets Exploratory Group, a group of 26 utilities, indicates the power marketer will benefit by participating in a day-ahead market.

But, Bonneville’s participation hinges on its requirement for independent market governance that is not obligated to a single state, entity or trade association, staff said, noting that CAISO’s board is appointed by California’s governor.

The BPA intends to get comments on the recommendation at three public workshops between May and August. The federal power marketer plans to issue a draft record of decision in August with a final decision expected in November.

Too soon to decide: AEU

It’s significant that BPA staff found joining a day-ahead market is beneficial and legal, according to Advanced Energy United, a trade group for clean energy companies.

However, AEU contends it is too soon to decide which market to join. “This is a very dynamic landscape that is rapidly changing,” Leah Rubin Shen, an AEU managing director, said in a statement. “BPA’s own modeling shows their customers and partners will benefit most from being in the same market as California, and there is a robust effort underway – the West-Wide Governance Pathways Initiative – to resolve BPA’s primary objection regarding independent governance.”

The initiative is exploring options for an independently governed entity to oversee wholesale power markets in the West. A straw proposal is expected to be released April 10, according to AEU.

“More and more entities are moving toward the broadest possible regional electricity market in the West, and we urge BPA to be a part of the solution,” Rubin Shen said. “We are expecting continued developments from the Pathways Initiative and other Western utilities in the coming weeks and urge all entities to make the most informed decision that takes all the options into consideration.”

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