Dive Brief:
- Southwest Power Pool’s proposed Markets+ tariff is deficient and requires more information about how transmission capacity is made available to market participants, among other lacking details, the Federal Energy Regulatory Commission said in a Wednesday letter to the grid operator.
- SPP submitted its 600-page Markets+ tariff in March and amended the filing in April. SPP plans to launch the Western day-ahead electricity market in early 2027 in an effort to lower costs and improve system reliability across the region.
- “We’ve always anticipated that a deficiency letter from FERC was a possibility given the intricacies of the market structure. We have full confidence we can quickly and effectively address FERC’s request,” Antoine Lucas, SPP vice president of markets, said in a statement.
Dive Insight:
SPP officials said the work necessary to respond to FERC’s questions “will not negatively impact the Markets+ timeline.”
“The limited scope of the Commission’s requests for additional clarity indicates its broad understanding and acceptance of the Markets+ design as proposed, with a need for more detail on some specific, nuanced market characteristics,” the grid operator said.
FERC’s 12-page deficiency letter includes questions focused on transmission capacity availability and scheduling; a proposed greenhouse gas pricing mechanism; how hydroelectric resource capacity is assessed; and how resource aggregations may impact market operations.
Questions include:
- FERC wants to know how SPP will determine that a resource aggregation has or is anticipated to have a “material impact on market operations,” and requested the specific criteria that might be used to make the determination;
- The agency asked for clarification on whether and when market participants would be allowed to estimate [greenhouse gas] allowance prices, “and whether and when any price validation would occur if a market participant were to use expected costs”;
- FERC requested SPP to explain if the term “unused physical capability” is inclusive of unscheduled transmission capability “or if it only includes capability for which there is no network, firm, or non-firm point-to-point transmission service reservations”;
- FERC asked SPP to explain the “process and timeline by which Markets+ Transmission Service Providers communicate what transmission capacity is unavailable,” and how transmission capacity is opted-out “and how the opted-out transmission capacity is made available again for use in Markets+.”
FERC directed SPP to file its response within 60 days of the deficiency letter.
SPP “has already begun work considering [FERC’s] requests and is preparing responses that SPP leaders are confident will adequately demonstrate readiness to build and launch a regional, day-ahead market that effectively and equitably serves customers across the Western Interconnection,” the grid operator said.
SPP said Markets+ participants are still working on defining market administration protocols. The day-ahead market is designed to expand on SPP’s Western Energy Imbalance Services market, which began operating in 2021.
The second phase of Markets+ development begins in 2025 and will include the development of “systems, testing and parallel operations,” with the new market expected to go live two years later, the grid operator said.
“The Markets+ development timeline has always had flexibility,” said Lucas.
Stakeholders involved in phase one development of Markets+ include the American Clean Power Association, Arizona Public Service, Bonneville Power Administration, NV Energy, NW Energy Coalition, Pattern Energy, Salt River Project, Sierra Club, Western Resource Advocates and more than two dozen other entities.
