E&E News reports that the Bonneville Power Administration has opted to join the Southwest Power Pool's Markets+ day-ahead market instead of the California Independent System Operator's Extended Day Ahead Market, a decision with major implications for the Western power grid's future. United's Leah Rubin Shen condemned the move, cautioning that it risks creating a fragmented market structure, increasing costs, and reducing grid reliability.
The largest electricity supplier in the Pacific Northwest on Friday finalized its decision to join a market being formed by Arkansas-based Southwest Power Pool, rather than one out of California.
The choice by the Bonneville Power Administration — a federal agency that distributes hydropower from the Columbia River Basin — sets the stage for the West to be bifurcated between two day-ahead markets after decades of trying to organize the region.
Joining SPP’s Markets+ operation will allow BPA to buy and sell power on a day-ahead market with a wider footprint of trading partners. In a letter Friday announcing the decision, BPA Administrator and CEO John Hairston said the decision “offers an opportunity to ensure a reliable, abundant and affordable energy supply for consumers in the Northwest.”
A broader day-ahead market is expected to lower costs and increase reliability by offering participants a larger pool of resources to buy from. It is also likely to boost low-cost renewable power.
BPA’s own modeling had shown that joining a separate market being organized by the California ISO known as the Extended Day-Ahead Market, or EDAM, could result in greater cost savings. However, the organization said it was concerned about the governance of the EDAM market and the degree to which it would be independent from California politics.
Markets+ offered a “superior market design, independent governance structure and inclusive stakeholder process,” BPA said in a policy document released Friday. SPP’s Markets+ is set to launch in 2026 and builds upon an existing real-time market that includes 10 Western utilities. The day-ahead market will give SPP a broader footprint that spans both sides of the Rocky Mountains and is expected to boost reliability and lower costs by allowing members to share from a broader pool of resources.
The market has also attracted commitments or interest from utilities in Arizona, Colorado and Washington. There was a strong lobbying effort to convince BPA to join California’s EDAM or at least
to delay a decision until the state worked through more governance questions. That market is set to launch in May 2026 and builds on the existing Western Energy Imbalance Market, which has 22 participants and represents nearly 80 percent of electricity demand in the Western Interconnection.
to delay a decision until the state worked through more governance questions. That market is set to launch in May 2026 and builds on the existing Western Energy Imbalance Market, which has 22 participants and represents nearly 80 percent of electricity demand in the Western Interconnection.
BPA is currently a member of that market and would have to leave to join Markets+. BPA said it is not sure of the timeline for when it would leave the California market and when it would join Markets+. While studies have shown that a Western market with a large footprint that includes California would offer the greatest regional savings, many potential participants have balked at a market that would be influenced by the blue state. The California ISO’s board is appointed by the California governor.
A bill in the California Legislature would allow the California ISO to spin off governance of the energy markets to an independent third-party organization. The bill has passed two key committees but has yet to be heard on the Senate floor and still faces questions over whether ceding control of the market could mean the state loses control over its own electricity mix.
“The West has the potential to come together and build a broad, unified market for the whole region,” said Leah Rubin Shen, managing director at Advanced Energy United. “Unfortunately, this decision takes us away from that vision, cementing a narrower path that could lock us into a fragmented market structure and undermine the immense reliability and cost-savings benefits of sharing resources across the region.
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