Southwest Power Pool has launched the second phase of development of its western day-ahead and real-time market and remains on track for a 2027 launch, the grid operator said Monday.
The second phase of the Markets+ initiative is backed by financing provided by Simmons Bank to cover the $150 million needed for full market implementation, SPP said. During this phase, stakeholders and staff will collaborate to develop the systems needed to operate the market, conduct market trials and parallel operations.
“Securing financing for phase two of Markets+ is a pivotal step forward,” SPP Vice President of Markets Carrie Simpson said in a statement. “It allows SPP to continue developing a more efficient, transparent and reliable energy market for our western stakeholders and their customers.”
SPP’s funding agreement framework was approved in April by the Federal Energy Regulatory Commission. The agreement details how implementation costs will be recovered over the market’s operational life, and so far eight utilities have signed on, including: Arizona Public Service, Bonneville Power Administration, Chelan County PUD, Grant County PUD, Powerex, Salt River Project, Tacoma Power and Tucson Electric Power.
Bonneville announced its plan to join SPP’s Markets+ in March, eschewing a market being launched by the California Independent System Operator.
The utilities signing on to SPP’s effort are located across the Desert Southwest, Pacific Northwest and Mountain West regions of the Western Interconnection and demonstrate “broad regional commitment and collaboration,” the grid operator said.
“With key regional partners on board, we’re ready to begin the next phase of development,” SPP Senior Director of Seams and Western Services Jim Gonzalez said.
Federal regulators say development of SPP’s Markets+ is important to improve grid reliability and energy affordability across the region.
In March, The Brattle Group published an analysis showing SPP could need up to $263 billion in generation investments in order to support load growth through 2050.
By mid-century, SPP will need 20 GW to 48 GW of new wind generation and 42 GW to 130 GW of new solar generation. As solar generation expands, 22 GW to 59 GW of battery storage “is projected to be cost effective (and often co-located) to maintain resource adequacy,” the report said.
