Basin Electric takes next step in exploration of new West-side electricity market

Basin Electric has signed an agreement with the Southwest Power Pool (SPP) to continue the process of exploring membership in a West-side regional transmission organization (RTO).

Basin Electric is one of seven western utilities to sign the agreement, including Colorado Springs Utilities, Deseret Generation and Transmission Cooperative, Municipal Energy Agency of Nebraska (MEAN), Platte River Power Authority, Basin Electric Class A member Tri-State Generation and Transmission Association, and three regions of the Western Area Power Administration (WAPA)—Colorado River Storage Project, Rocky Mountain Region, and Upper Great Plains-West preparing to join the RTO in early 2026.

SPP expects the expansion of its service territory to create economic and reliability benefits for its member companies through access to a larger generation fleet, greater geographic diversity, and increased trading opportunities in SPP’s energy markets.

“As we’ve thought about the West-side RTO, it’s been an incredible balance of what we’re seeing right now with West-side surplus sales and the risk and uncertainty that we’re facing as we go into the future,” said Valerie Weigel, Basin Electric vice president of Asset Management and Commodity Strategy. “Some of those uncertainties are around environmental regulations, some are around renewable growth in the West, and some are potential transmission buildouts. Basin Electric moving forward with signing the commitment agreement and continuing to investigate the West-side RTO will provide us an avenue to mitigate any potential risks that could come with all the uncertainty we’re facing in the next three years.”

According to a Sept. 14 press release sent out by SPP, the western utilities now pursuing RTO membership are currently participating in the SPP Western Energy Imbalance Service (WEIS) market. The WEIS, which facilitates efficient real-time energy dispatch, provided an estimated $31.7 million in net benefits for participants in 2022 and reduced wholesale energy costs by $1.35/MWh. The noted enhancements to reliability and increased value for participants was a key driver for making the move to full RTO membership.

“Our collaborative and member-driven business model centers on bringing value to our RTO members and those utilities we serve in both interconnections,” Barbara Sugg, SPP president and CEO said in the press release. “We are thrilled to see this expansion of our RTO and bring our innovative approach to grid management to new customers in the West. This marks not only a key milestone in SPP’s history, but points to the transformation of the energy market in the Western Interconnection, and highlights the opportunities created by having multiple options and market operators in the West.”

Other western entities have a deadline of March 1, 2024, to signal their interest if they wish to participate in the market by March 2027. Basin Electric has until early 2026 to make a final decision about joining the new RTO.