Five advocacy groups on Thursday sued the Bonneville Power Administration for deciding to join the Southwest Power Pool’s Markets+ day-ahead market.
The BPA’s May 9 decision to join Markets+ instead of a day-ahead market for the West developed by the California Independent System Operator will lead to higher electric costs, inefficient operations between market seams and potentially the need to build more generating facilities, according to the lawsuit filed by NW Energy Coalition, the Idaho Conservation League, the Montana Environmental Information Center, the Oregon Citizens' Utility Board and the Sierra Club.
“Bonneville’s decision on markets will affect the transmission and generation of electric power across the West and is exactly the type of major federal action that should first consider the harms it could cause to our air quality, grid system reliability, [and] fish and wildlife,” Jaimini Parekh, a senior attorney for Earthjustice, said in a press release. Earthjustice represents the advocacy groups.
The BPA’s decision violated the Pacific Northwest Electric Power Planning and Conservation Act, the National Environmental Policy Act and the Administrative Procedure Act, according to the groups.
“BPA did not rationally explain how joining the smaller, non-contiguous Markets+ footprint will enable it to meet its duty to promote an adequate, efficient, economical, and reliable power supply for the region that also gives priority to clean, renewable resources,” the groups said in the lawsuit filed at the U.S. Court of Appeals for the Ninth Circuit.
The groups also contend that BPA’s choice to join Markets+ will likely increase the risk of blackouts during periods of high or extreme electricity demand because of the “many and complex” seams that power must be transferred across in the market as compared to CAISO’s Extended Day-Ahead Market or a “no-action” alternative.
BPA does not comment on active litigation, said Nick Quinata, a spokesman for the federal power marketer.
In preparing to make its final decision, BPA said that while the CAISO’s EDAM may offer greater financial benefits compared to Markets+, overall the SPP market is a better fit for Bonneville based on market design elements covering governance, resource adequacy, greenhouse gas accounting and congestion revenue.
BPA is a key player in the Northwest’s power sector. The agency sells wholesale power from federal hydroelectric dams in the Northwest, totaling about 22.4 GW. The federal power marketer also operates about 15,000 circuit miles of high-voltage transmission across the Northwest. Bonneville mainly sells its power to cooperative and municipal utilities, and public power districts.
Two day-ahead markets are emerging in the West. Arizona Public Service, Xcel Energy’s Public Service Co. of Colorado, Salt River Project, Tucson Electric Power and UniSource Energy Services are among utilities planning to join Markets+.
PacifiCorp, the Los Angeles Department of Water and Power, the Balancing Authority of Northern California, Portland General Electric and Public Service Co. of New Mexico are among those set to join EDAM. Idaho Power, NV Energy and PowerWatch, formerly BHE Montana, are leaning towards joining the CAISO-run market.
In a day-ahead market, a grid operator schedules power production a day in advanced based on demand forecasts. They can lead to more efficient operations and reduce price volatility.
