A wave of changes is coming to western energy markets. The last MCG Energy blog discussed CASIO EDAM, RTO West and Markets Plus are just as significant to the future of power in the West. MCG Energy is closely tracking all of these developments to ensure MCG Energy’s solutions are ready for customers to work in these markets the first day of operation.
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What Is the Southwest Power Pool?
Southwest Power Pool (SPP) is a Regional Transmission Organization (RTO) that now serves 17 Midwestern and Plains states on the western side of the Eastern Interconnection. SPP has expanded its market footprint in recent years, launching the SPP Integrated Marketplace (SPPIM) in 2014, and the Western Energy Imbalance Service market (WEIS) in 2021. With Markets Plus (M+) and RTO West, SPP is now preparing to add day-ahead service to its real-time energy imbalance market. This will give load-serving entities an additional opportunity to arrange the resources needed to cover load across a broader market footprint. According to SPP, it will also improve energy affordability and reliability.
In order for consumers to benefit from these changes, it is critical that energy solution providers prepare their systems to accommodate these emerging markets. MCG Energy is devoting a significant portion of our research and development to ensuring that the MCG Energy Software Suite is ready for RTO West and M+ on day one. We are also on track for FedRAMP authorization by the end of 2023, to aid customers in making a seamless entry into these new markets.
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Markets Plus (M+)
In late 2022, SPP published details of the proposed M+ service with the stated aim of centralizing day-ahead and real-time commitments and dispatch in a Western energy market. According to SPP, M+ will build on WEIS by providing a “hurdle-free transmission service across its footprint” and will “pave the way for the reliable integration of a rapidly growing fleet of renewable generation.”
Interest in M+ is running high, and so is speculation on who will join the new SPP and CAISO markets. By April 2023, 31 utilities, power generators, market participants, and others signed agreements to participate in the first phase of M+, which includes market design and intensive review. According to SPP, those parties include Arizona Public Service Co., Bonneville Power Administration (BPA), NV Energy, Salt River Project, Tri-State Generation and Transmission Association, Tucson Electric Power Co. and PSCo (Xcel). Climate advocacy groups signed on as well, including the American Clean Power Association.
Participating in phase 1 does not mean participation in the new market is assured. PSCo President Robert Kenney stated “We will make that decision following our extensive review of the Markets+ design.” However, a number of participants in phase 1 provided funding, demonstrating their interest in the effort. BPA’s CEO John Hairston said funding the first phase of M+ “is an investment that we expect to provide multiple benefits… Markets such as this are the future of operations in the West and this ensures BPA and its customers will keep pace and help shape these important initiatives.”
The real-time portion of M+ is scheduled to go live in 2024. SPP has indicated that day-ahead components of the service will be developed simultaneously, with their launch is currently projected for 2026.
RTO West
The name “RTO West” reflects SPP’s ambition to be the first regional transmission organization to provide coordinated operation across the Eastern and Western Interconnections. Already serving 17 states in the Eastern Interconnection, seven utilities west of the Rocky Mountains plan to join SPP in 2026: Western Area Power Association (WAPA), Basin Electric, Colorado Springs Utilities, Deseret Generation and Transmission Cooperative, Municipal Energy Agency of Nebraska, Platte River Power Authority, and Tri-State Generation and Transmission Association. These utilities already participate in WEIS. Their full membership will mark the first major expansion of SPP’s service territory since SPPIM opened in 2014.
The 2026 rollout will coincide with the launch of M+, with plans to integrate more new members in 2027. Utilities wishing to join have a March 2024 deadline to indicate their interest in becoming members by March 2027.
MCG Energy – Your Resource for Working in SPP Markets
MCG Energy is working had to ensure that our Energy Software Suite is ready on day one for SPP’s Markets Plus and RTO West, as well as CAISO’s EDAM and DAME. Contact us today to discuss how our software solutions can assist you to succeed in all North American energy markets.
David Peterson, Ph.D. is the content specialist for MCG Energy Solutions.