The Federal Energy Regulatory Commission (FERC) has approved a plan allowing the Southwest Power Pool (SPP) to expand into the Western Interconnection, making it the first regional transmission organization (RTO) to operate across two of the three major U.S. electricity grids. This decision enables SPP to integrate seven western utilities into its existing footprint, which primarily covers the Eastern Interconnection.

The expansion is expected to improve grid reliability and lower electricity costs by creating a broader market for power distribution. A 2020 study by the Brattle Group estimated that the move could generate $49 million in annual savings for SPP’s members. The new RTO West is scheduled to launch in April 2026, incorporating utilities such as Platte River Power Authority, Basin Electric Power Cooperative, and Colorado Springs Utilities, among others.

Barbara Sugg, President and CEO of SPP, emphasized the benefits of the expansion, stating that it would bring value to both new and existing members while strengthening grid reliability. Jason Frisbie, CEO of Platte River Power Authority, highlighted that joining an RTO aligns with the organization’s long-term goal of integrating more renewable energy while maintaining cost efficiency.

The approval comes as states like Colorado and Nevada mandate that utilities join an RTO by 2030 as part of a broader strategy to enhance regional market coordination. While the expansion is expected to improve energy transfers between the Eastern and Western grids, some industry stakeholders have raised concerns about potential seams issues, which could lead to market congestion and pricing disparities where different transmission systems intersect. FERC commissioners acknowledged these concerns but stated they would be addressed as they arise.

In addition to the RTO expansion, SPP is developing Markets+, a day-ahead market for the Western Interconnection, set to launch in 2027. Meanwhile, the California Independent System Operator (CAISO) is also advancing its own Western day-ahead market, providing multiple options for utilities looking to optimize their energy resources.

Source: eenews.net