Chris Hansen is CEO of La Plata Electric Association.
On April 1, La Plata Electric Association joined the Southwest Power Pool as it expands into the Western Interconnection. That step reflects a broader evolution underway across the Western grid. Utilities are moving away from localized operating models and toward more coordinated, regional approaches to managing electricity systems.
For decades, the Western grid has been divided across numerous balancing authorities, each responsible for managing its own supply and demand. While that structure provided local control, it also limited the ability to efficiently share resources, optimize transmission and respond to system-wide challenges.
Organized markets introduce a different model.
Within a regional transmission organization, system operators coordinate dispatch across a wide geographic footprint, drawing on the most efficient available resources while maintaining reliability standards. This approach improves how existing infrastructure is used and expands access to a broader range of generation assets.
It also changes how utilities plan. Rather than building and operating systems in isolation, participants can coordinate investments, share costs and make more informed decisions about when and where new infrastructure is needed.
These dynamics are becoming more important as the grid evolves. Demand is increasing from large loads, drought has put permanent pressure on hydro power, resource portfolios are shifting and expectations for reliability continue to rise. In that environment, coordination across regions becomes more valuable.
The impact of that coordination can be observed quickly.
Following its transition into SPP, LPEA expects an immediate reduction in greenhouse gas emissions of roughly 20% based on its updated supply portfolio, along with reduced wholesale power costs with expanded access to competitively priced energy. This outcome highlights how market structure can simultaneously improve cost and emissions performance.
The Western grid has long been fragmented across more than three dozen balancing areas. That fragmentation has historically limited efficiency and constrained how resources move across the system. Expanding regional coordination begins to address those limitations.
This shift has been years in the making.
I have spent much of the past decade working on policies to enable broader participation in organized markets. As a state senator, I crafted legislation designed to move Colorado in this direction, including a bipartisan law enacted in 2021 (SB 72) that requires utilities to participate in a regional market by 2030. Those policies are now being implemented.
Early participation provides insight into how these transitions can unfold in practice. It demonstrates how utilities can engage in regional coordination while maintaining local governance structures and decision-making authority. More broadly, it points to a direction of travel for the Western grid.
As additional utilities evaluate different levels of market participation, the question is no longer whether to participate in organized markets, but how quickly they can adapt to a more coordinated system.
That shift will require balancing regional efficiency with local priorities, integrating evolving resource mixes and maintaining reliability under changing conditions.
Organized markets do not resolve every challenge facing the grid. However, they establish a framework that supports more coordinated operations, more transparent pricing, lower emissions and more efficient use of existing resources.
The shift is already underway. The question now is how quickly the rest of the West will follow.
