Dive Brief:
- The Bonneville Power Administration is rethinking its plan to join the Southwest Power Pool’s Markets+ and may instead participate in the Extended Day-Ahead Market run by the California Independent System Operator, according to a letter written by BPA Administrator Travis Kavulla.
- For BPA to join EDAM, the Regional Organization for Western Energy must meet governance-related criteria Kavulla outlined in the Sept. 3 letter to the newly formed organization, which is preparing to oversee EDAM and the Western Energy Imbalance Market.
- Kavulla, a former energy executive and regulator who joined BPA on June 29, said he was looking at the federal power marketer’s decision to join Markets+ with “fresh eyes,” and that his evaluation will be based on three principles: the ability to trust the durability of market rules; the depth and liquidity of the market; and how seams between markets affect reliability and economic efficiency. BPA plans to make a draft decision by the end of the year, he said.
Dive Insight:
BPA’s decision is crucial to market development in the West. The agency provides about one-third of the electric power produced in the Northwest, mainly from 22.5 GW of federal hydroelectric resources. BPA also operates about 15,000 circuit miles of high-voltage transmission in its service territory, which includes Idaho, Oregon, Washington, western Montana and parts of Montana, California, Nevada, Utah and Wyoming.
BPA participates in the CAISO-run Western EIM, which offers real-time balancing between electric supply and demand.
In May 2025, Bonneville opted to join Markets+, despite the greater financial benefits offered by EDAM. BPA said at the time that Markets+ was a better fit for the agency based on market design elements covering governance, resource adequacy, greenhouse gas accounting and congestion revenue.
However, joining Markets+ has drawbacks, such as the creation of seams between markets, according to Kavulla.
“Bonneville may have to withdraw certain transmission capacity from optimization within the market — an outcome antithetical to the ostensible goal of efficiently utilizing system infrastructure, which is the bedrock of attempts at well-functioning electricity markets,” he said in his letter to the ROWE.
Also, EDAM would provide more market depth and liquidity than Markets+, Kavulla said.
Not including BPA’s generation and demand, the average net generation in EDAM totaled 39 GW versus Markets+’s 19 GW and EDAM’s average demand totaled 48 GW compared to 19 GW for Markets+, according to the letter, which cited recent U.S. Energy Information Administration data.
“Depth and liquidity of a more unified market allow for greater trade and investment opportunities,” Kavulla said.
Further, there have been key governance changes since Bonneville decided to join Markets+, including the creation of the ROWE, Kavulla said. Also, California revised its laws a year ago so that the imbalance market and EDAM could be governed by a regional entity with a board appointed through an independent process.
If BPA sees “concrete actions” on certain governance-related issues, Kavulla said he intends to propose changing Bonneville’s market direction.
Those areas include: independent board leadership; quickly hiring a workforce to oversee CAISO as the “market services vendor”; stakeholder-driven governance; protection against unilateral state action; and the development of a platform for reliable investment, according to the letter.
The ROWE, for example, should issue a resolution by the end of November establishing a stakeholder governance framework that “empowers market participants to initiate and evaluate major market proposals,” Kavulla said. “When California's state regulators and CAISO interact with the ROWE as advocates for policy, they should do so on the same footing as all other stakeholders.”
The ROWE should also quickly issue a policy roadmap for developing rules around key issues such as resource adequacy, how transmission owners and rights holders will be paid in the EDAM market, and the prerogatives the BPA may assume for marketing its hydro resources, Kavulla said.
Advanced Energy United, a clean energy trade group, supports the BPA’s reconsideration of what market it may join.
"We're pleased BPA recognizes the important strides that have been made around governance and the importance of choosing an expansive market that can support the growth of important industry while strengthening reliability and keeping customers' costs low,” Brian Turner, AEU senior director, said in an email Tuesday.
