Southwest Power Pool Launches New Electricity Market for Western Utilities

Southwest Power Pool on Feb 1 launched its Western Energy Imbalance Services market designed to balance generation and load regionally and in real time. The initiative is the latest in a series of measures to better serve the Western Interconnection and is expected to lower electricity costs and enhance price transparency. Moreover, the move will aid in the mitigation of congestion on the transmission system for market participants.

Western utilities that have announced their intent to join the Western Energy Imbalance Services Market include Basin Electric Power, Desert Power Electric, and the Tri-State Generation and Transmission Association, to name a few. As with SPP’s previous regional market initiatives, the new market will provide price transparency and enable market participants to bilaterally trade and hedge against expensive congestion. Tri-State Generation CEO Duane Highley cited the “low cost of entry” and immediate economic benefits of joining the market, and underscored the ability of the five-minute intra-hour market to help integrate more renewable resources that will further the clean energy transition.

The new market adds to a series of services that SPP offers to western utilities. In 2018, the grid operator became the administrator of the Western Interconnection Unscheduled Flow Mitigation Plan. Subsequently, in 2019, SPP launched its Western Reliability Coordination service, becoming the first regional transmission organization to provide the service in both the Eastern and Western Interconnections. Through this service, SPP ensures the reliability of the bulk electric system in the west on behalf of 12 entities across seven states.

Southwest Power Pool manages the electric grid across 14 states in the central U.S namely, Arkansas, Iowa, Kansas, Louisiana, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas and Wyoming.