The Future of Energy Markets in the West: A Shift in Governance
In a bid to optimize energy trading and avoid wastage, a significant portion of western utilities engage in the Western Energy Imbalance Market (WEIM). Established in 2014 by the California Independent System Operator, WEIM facilitates power transactions across the region. However, its management by California has sparked debate among participants.
Brian Turner, a senior director at Advanced Energy United, highlights the contention surrounding WEIM’s current governance. “Besides just the kind of interregional rivalry that is pretty natural, the California ISO was created as a nonprofit corporation for the benefit of the state of California,” Turner explained. “And its board of governors is appointed by the California governor and confirmed by the state senate.”
Driven by a desire for autonomy, a coalition comprising APS, SRP, and Tucson Electric Power is preparing to establish an alternative market under the Southwest Power Pool, termed Markets+, by the next year. This strategic move would, however, reduce their trading partners to just 30% of the West, posing a significant risk, according to Turner.
“You’d now be reduced to about 30% of the West as your trading partners,” Turner noted. “You’ve got less visibility, less connectivity to other utilities that can help you out when it’s 115 degrees in Phoenix and the power is just off the charts and you need some immediate assistance.”
Advanced Energy United, which supports nationwide policies for easier integration of renewable resources into the U.S. grid, has been proactive in addressing these challenges. Turner has been part of the Pathways Initiative, advocating for an independent board to oversee WEIM, a proposal that has won approval from California officials. This transition to the Regional Organization for Western Energy (ROWE) is slated to take effect on January 1, 2028.
The impending change has caught the attention of the Bonneville Power Administration, a key potential partner for Markets+. In a communication to ROWE, Bonneville’s administrator, Travis Kavulla, acknowledged the evolving governance dynamics, stating, “Yet, notably, in just the last year, the State of California revised its laws to offer an opportunity for WEIM and EDAM to be governed by a separately incorporated regional entity.” Read the full letter here.
The potential decision by Bonneville to remain with WEIM could further reduce trading opportunities for Arizona utilities. Arizona Corporation Commissioner Lea Márquez Peterson has asked APS, SRP, and TEP to clarify how Bonneville’s stance might influence their transition to Markets+ by the upcoming Friday deadline. See Commissioner Peterson’s directive here.
An APS spokesperson confirmed the utility’s commitment to Markets+, expressing their intent to comply with Commissioner Peterson’s request and move forward with the new market setup.
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