The Bonneville Power Administration on May 9 issued its long-awaited decision on joining a day-ahead market, confirming its choice of SPP’s Markets+ over CAISO’s Extended Day-Ahead Market, marking a major milestone for Little Rock, Ark.-based SPP’s push to expand into the Western Interconnection.

BPA’s final record of decision (ROD) will come as little surprise to those who’ve been following market developments in the West. In March, the agency released a draft “policy direction” stating that the SPP market “is the best long-term strategic direction for Bonneville, its customers and the Northwest,” which followed by a year a staff “leaning” expressing similar determination.

The ROD was the culmination of a two-year stakeholder process conducted by BPA, an effort often marked by tensions between supporters of each day-ahead market, with some EDAM backers contending the process appeared to be working to a foregone conclusion.

The process even drew the attention of key Northwest political figures, including members of the Pacific Northwest’s U.S. Senate delegation, who largely were critical of the agency’s leaning in favor of the SPP market.

The ROD seems to anticipate potential complaints about how BPA conducted its day-ahead markets process, saying the agency “has held one of the most open and transparent public processes to evaluate day-ahead market participation.”

As in the “policy direction” issued in March and staff leaning published last year, BPA’s ROD emphasized the importance of Markets+’s independent governance framework. While recognizing the “qualitative” nature of the issue, BPA reiterated its oft-stated opinion that the SPP market’s governance structure is “superior” to that of EDAM, despite ongoing efforts by the West-Wide Governance Pathways Initiative to relax the state of California’s oversight for CAISO’s EDAM and Western Energy Imbalance Market (WEIM).

“Bonneville does not find merit in waiting for EDAM to incrementally improve its governance,” BPA wrote. “First, Bonneville has determined that the existing Markets+ governance is superior even to the Pathways Step 2 governance revisions currently proposed for EDAM, which still require legislative approval. Second, the Pathways Step 2 governance does not sufficiently address Bonneville’s concerns regarding independence and EDAM governance independence would continue to be insufficient, even under Pathways Step 2.”

BPA also pointed to the “strategic benefit” of deciding on a market now, including “better coordination” with other agencies and establishing an “early seat at the table” for participating in Markets+.

Reactions

Reactions from across the region were mixed.

“We respect BPA’s decision to join Markets+ and recognize the valuable contributions from diverse stakeholders across the Pacific Northwest during this evaluation process,” CAISO CEO Elliot Mainzer — BPA’s previous administrator — said in an email. “The CAISO continues to focus on the success of the Western Energy Imbalance Market (WEIM) and the Extended Day-Ahead Market (EDAM) to ensure inclusive and efficient energy market solutions. Our commitment to maintaining reliability and delivering economic value to our customers in the West remains unwavering, and we look forward to continued collaboration with all parties involved.”

“I have repeatedly stressed that BPA should take its time to get this decision right, which will impact Oregonians for decades,” Sen. Jeff Merkley (D-Ore.) said in an email. “Despite concerns from my fellow Senators and the Governors of Oregon and Washington, BPA has made a rushed decision. BPA still needs to go through a ratemaking process, and I remain laser-focused on prioritizing the needs of Oregon families to have affordable and reliable energy.”

Leah Rubin Shen, managing director at Advanced Energy United, called BPA’s decision “premature,” contending it could “entrench costly market seams and inefficiencies.” Rubin Shen pointed to the production cost study commissioned by BPA in 2024 that showed Markets+ would deliver the agency fewer economic benefits than EDAM.

“The West has the potential to come together and build a broad, unified market for the whole region,” she said. “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.”

The Northwest Energy Coalition (NWEC), a strong EDAM supporter in the region, expressed disappointment over BPA’s decision and also pointed to the BPA analysis showing the greater financial benefits stemming from the larger footprint of the CAISO market.

“Yet BPA has chosen Markets+, a smaller market footprint. When BPA joins Markets+, it will decrease net benefits to customers by $108 million each year. If BPA joins EDAM, it will increase net benefits to customers by $57 million each year,” NWEC wrote. “BPA’s decision to pursue a market with less economic benefits for customers and less direct interconnection with other utilities across the West will reduce the potential for all electricity users in the region to benefit from a unified day-ahead market. This decision is not in the best interest of the region.”

Seattle City Light said it is “deeply disappointed” in the decision. “BPA’s decision to join Markets+ is inconsistent with its responsibility to maximize customer benefits in accordance with sound business principles. BPA’s own record and analysis shows that Markets+ will increase costs for BPA and its customers.” The decision “will negatively impact the utility in two significant ways — as a market participant and as one of BPA’s largest customers. Our ratepayers will bear the burden of this decision as we spend $20-$40 million more every year on energy.  This is especially burdensome with the rising costs to meet growing energy needs.”

Read the full article here.