The Southwest Power Pool will expand its regional transmission organization operations into the Western Interconnection as soon as early next year under its RTO West plan, which the Federal Energy Regulatory Commission approved on Thursday.
“This proposal will likely enhance grid reliability and operational efficiency by consolidating transmission management under a single RTO,” FERC Commissioner Willie Phillips said during the agency’s monthly meeting.
The approval of SPP’s RTO West plan “is another major milestone for the market evolution in the Western part of the U.S.,” FERC Commissioner Judy Chang said.
Chang and Phillips said more work needs to occur on RTO West, however, especially on how the seams between markets and nonmarket areas will be managed.
“In the near future, I hope we can address seams issues — like data sharing, congestion management, market power mitigation, transmission availability, export-import management and intertie optimization — to maximize reliability and consumer benefits,” Phillips said.
In its decision, FERC said it was too soon to address the seams issues, which were raised by the Colorado Public Utilities Commission, Xcel Energy’s Public Service Co. of Colorado and Black Hills utilities.
Entities pursuing RTO membership or expanded participation in SPP’s markets include Basin Electric Power Cooperative, Colorado Springs Utilities, Deseret Generation and Transmission Cooperative, Municipal Energy Agency of Nebraska, Platte River Power Authority, Tri-State Generation and Transmission Association, Western Area Power Administration – Colorado River Storage Project Management Center, WAPA – Rocky Mountain Region and WAPA – Upper Great Plains Region.
“We greatly value the full benefits of the SPP RTO, including day-ahead and ancillary services markets, efficient regional transmission planning, a common transmission tariff and participatory governance model that help us to further reduce costs for our members across the West,” Tri-State CEO Duane Highley said in an SPP press release.
SPP is working with additional Western utilities that are considering joining the RTO once its initial expansion is complete, the grid operator said.
SPP, which operates the grid and wholesale power markets from northern Texas to Montana, plans to launch its RTO West on April 1, 2026. SPP’s Eastern Interconnection and Western Interconnection regions will be linked by three direct current interties that total 510 MW.
Separately, FERC in January approved SPP’s Markets+ real-time and day-ahead market for the West, which the grid operator aims to start in 2027.
Here are four other takeaways from the meeting.
No White House directives on coal. The Trump administration hasn’t directed FERC to take steps to support coal-fired power plants, FERC Chairman Mark Christie said Thursday during a media briefing. “No specific directive or request or anything on coal,” Christie said.
President Trump on Monday in a social media post said, “I am authorizing my Administration to immediately begin producing Energy with BEAUTIFUL, CLEAN COAL.” The United States had about 201 GW of coal-fired generation, accounting for 15% of U.S. capacity, as of Dec. 31, down from 208 GW in 2023, according to FERC.
During Trump’s first term, the U.S. Department of Energy in September 2017 proposed rules that would have provided extra revenue to coal-fired and nuclear power plants to support grid reliability. FERC unanimously rejected the proposal.
FERC has authority over grid reliability, but states have jurisdiction over planning, building and restarting power plants, Christie noted.
FERC eyes reorganization. FERC has not been affected by the Trump administration’s effort to slash the federal workforce, according to Christie. However, FERC is considering reorganizing to make sure it is as efficient as possible, including with its natural gas infrastructure permitting, he said.
“That’s the big goal of ours,” Christie said. “The permitting process shouldn’t drag on for two or three years. If an infrastructure project is needed — and that is the central finding under the Natural Gas Act. Is the project needed? — … you want to get it built.”
In a move that could speed project permitting, FERC is developing a new process for reviewing projects under the National Environmental Policy Act, Christie said, noting the Trump administration withdrew the Council on Environmental Quality guidelines the agency had been following. For example, FERC will no longer use “a very detailed” environmental justice analysis to help assess how a proposed project could affect communities, Christie said.
FERC may need to hire more staff if there is an increase in gas-related applications at the agency, Christie said.
Rosner presses for interconnection automation. FERC’s interconnection reform requirements, approved in July 2023, are critical in getting power supplies online, but more work is needed, FERC Commissioner David Rosner said during the agency’s open meeting.
On Monday, Rosner sent letters to grid operators that highlighted how grid interconnection automation software can be used to speed the interconnection process. “Achieving a truly fast and efficient interconnection process requires continuous innovation that leverages the latest software and automation solutions,” Rosner said in the letter.
Rosner said it took two years for the Midcontinent Independent System Operator to conduct a manual study of a large interconnection cluster; an application developed by Pearl Street reproduced the study in 10 days and arrived at largely similar results.
Rosner also noted an Amazon Web Services “generation interconnection simulation” that the company says can reduce cluster re-study times from “weeks or months to days or less.”
“Interconnection automation is complex. We still have a lot to learn and explore about these new tools, and none of this can be done overnight. But to me, these early results suggest transformative potential to reduce backlog queues and connect needed energy resources to the grid faster and more efficiently,” Rosner said at the meeting.
Interconnection queue shrinks. Capacity in U.S. interconnection queues fell 3.3% in 2024, to 2,289 GW from 2,368 GW the year before, FERC said in its annual state of the markets report, released Thursday. Hybrid storage projects had the largest increases in new active project capacity in interconnection queues last year — up 40%, to 419 GW — followed by natural gas projects, which increased 77%, to 140 GW, according to the report.
The U.S. added 49 GW of nameplate capacity last year, mainly from solar, battery storage, natural gas and wind, FERC said. Last year, power plant owners retired 9.1 GW, mostly coal- and gas-fired resources, according to the report.
Meanwhile, electricity demand increased by 2.8% across all major grid operators in 2024, driven by hot weather and higher demand peaks in California, Texas and the Mid-Atlantic region, FERC said.
Average prices at Henry Hub, the U.S. natural gas benchmark price, fell 11%, to $2.25/MMBtu, last year on higher-than-average storage levels, according to the report. Outside the Northeast, wholesale power prices fell across the U.S. last year, FERC said. Mean wholesale electricity prices in 2024 were the lowest in SPP, at $27.87/MWh; the Southeast, at $29.72/MWh; and in Southern California, at $29.95/MWh. They were highest in the Northwest, at $59.98/MWh, according to the report.
