Reflecting on 2025 and Setting Sights on 2026 |
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Happy end of 2025! With a new year right around the corner, we are taking a moment to reflect back on our accomplishments, preparing for upcoming opportunities, and laying out what to expect as we move into 2026. See you next year! - Leah Rubin Shen, Managing Director at Advanced Energy United
As always, share the newsletter with your friends and colleagues and encourage them to subscribe. Feedback or suggestions for content? Please reach out to us at westernrto@advancedenergyunited.org. |
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In the spirit of reflection on where we've been and where we're headed, it's worth noting how active the regional market landscape has been and continues to be. Recent weeks brought important movement on both the Pathways Initiative and Markets+, plus a new FERC whitepaper—and if this is any indication, things won't be slowing down in 2026! |
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Pathways Initiative Prepares to Launch New Regional Organization
The Pathways Launch Committee has been hard at work preparing to launch the new Regional Organization for Western Energy (ROWE) in January. Last week, the Committee voted to approve bylaws and incorporation documents, after earlier this fall issuing an RFP for an executive staffing firm and putting forth a call for near-term funding support. With the Extended Day-Ahead Market (EDAM) going live in Spring 2026, shortly after the ROWE is officially incorporated, the Launch Committee and Nominating Committee (see below) will be working to seat an independent board by mid-2026 to further advance the shift to independent governance of the regional energy markets. The transition of market governance to the ROWE is expected to be final in early 2028. As always, you can review slides and recordings of Pathways stakeholder meetings here.
Pathways Sectors Select Nominating Committee Representatives
On December 12, the Pathways Initiative also announced the sector representatives (slide 5) for the Nominating Committee for the new ROWE. The Nominating Committee will play a key role in selecting the initial board for the ROWE over the next several months.
ROWE Well-Positioned to Support New Regional Programs
As we look forward to the ROWE becoming a reality next year, stakeholders are also starting to think about how it could support additional market services beyond the real-time and day-ahead markets, such as a resource adequacy program. While the Western Power Pool has been developing a resource adequacy program for the region, the aptly-named Western Resource Adequacy Program (WRAP), several entities dropped out ahead of a binding deadline earlier this year, citing concerns about market design and governance. Since then, some utilities planning to join EDAM have expressed interest in developing a similar program. A new Brattle study offers reassurance that if EDAM participants built their own resource adequacy program, it would be as reliable as WRAP—and the ROWE is well-positioned to support such a program.
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NEW Volts Podcast Episode on What's Next for Pathways and the ROWE
My colleague Brian Turner, alongside Pathways Launch Committee Co-Chair Kathleen Staks, joined Volts' David Roberts to unpack the details of the new ROWE and its potential to offer a unique “à la carte” menu of market services for the West. They discuss the transition from the existing real-time market to a day-ahead market, the safeguards built into the ROWE bylaws to protect state policies, and the politics of getting 38 separate balancing authorities to cooperate. Listen to the episode here.
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No FERCaround for Seams
In November, FERC released a staff whitepaper highlighting the complexities around seams that are likely to arise between the two day-ahead markets taking shape in the West. The report recommends that the West draw on practices used in Eastern markets to better coordinate transmission modeling, reliability agreements, and congestion management in order to reduce operational and economic inefficiencies.
Southwest Power Pool Hosts Markets+ Intro Webinar
If you've ever wanted to spend four hours diving into Markets+, now is your chance! SPP hosted a webinar on December 3rd going over the roles, components, features, and timelines of the Markets+ market.
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Markets+ Participation Update
Arizona Public Service, Salt River Project, Tucson Electric Power, Xcel Colorado, and Powerex have declared their intent to participate in Markets+ when it goes live in October 2027. While there are 11 entities total funding Phase Two development, some plan to join in the second round in 2028. As RTO Insider notes, while the Bonneville Power Administration (BPA) has committed to joining, there are still many steps before it can do so (see more below under "Regional Updates”).
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Updates Around the Region |
Pacific Northwest
As mentioned above, BPA is planning to join Markets+ in the second round of participants in October 2028. Before it can fully participate, the agency must exit the Western Energy Imbalance Market (WEIM), define its commercial model framework, complete a rate case and tariff proceeding, conduct a National Environmental Policy Act analysis, and finalize a Markets+ implementation agreement, all while navigating a court challenge. A group of nonprofits have filed a lawsuit in the 9th Circuit, urging the court to vacate BPA's decision to join Markets+ over EDAM. The nonprofits argue that BPA violated federal law by skipping an Environmental Impact Statement and potentially forgoing $4 billion in customer savings, while BPA and its supporters point to stakeholder input and Markets+ governance structure as their justification.
Meanwhile, PacifiCorp is hiring additional staff and upgrading systems to prepare for its joining of EDAM. Interior West
NV Energy has taken the next formal step toward joining EDAM by filing an application with its commission. The proceeding will unfold in early 2026 and will shape Nevada's path toward day-ahead market participation. And not to sound like a broken record, but it seems very likely that Colorado is on track to face a growing number of internal seams. Most recently, the Colorado PUC approved Tri-State's request to join SPP's RTO West. And as mentioned above, Xcel has committed to joining Markets+ when it goes live in 2027, further deepening Colorado's bifurcation across regional market efforts.
California
CAISO is evaluating ways to increase distributed energy resource (DER) and demand response participation in its markets and is soliciting stakeholder feedback to improve how these resources can support the grid.
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