By Hannah Grover
El Paso Electric surprised state regulators when it announced plans in January to join the Southwest Power Pool’s Markets+. This decision would place EPE in a separate market than the state’s largest utility, the Public Service Company of New Mexico.
Markets+ is a regional, day-ahead market that facilitates increased collaboration between utilities.
The New Mexico Public Regulation Commission asked EPE to explain the decision to join Markets+. The utility presented those reasons to the commissioners during a special meeting Thursday.
EPE’s Director for Market Development and Resource Strategy Emmanuel Villalobos apologized to commissioners and said the utility should have brought the plan to the commission prior to announcing it, as EPE had indicated it would.
“When you say you’re going to do something, you’ve created the expectation. And then when you don’t do it, it breaks the trust,” Commission Chairman Pat O’Connell said following EPE’s presentation.
He said Thursday’s meeting was important because it allowed them to “reset the relationship” between EPE and the PRC.
Regional markets are important tools in managing the grid as more and more renewable resources — which can be dependent on weather — come onto the system. These regional collaborations make it easier for utilities to trade electricity from areas where there’s a surplus to areas where there’s not enough. These markets also make it more affordable for utilities to acquire electricity from other members of the same day-ahead market.
Essentially, these markets can help customers by lowering costs — which translates directly into utility rates — and improving grid reliability.
EPE officials told commissioners they felt Markets+ provides more operational flexibility and reliability.
While EPE is planning to join Markets+ starting in 2028, PNM announced in November plans to join the California Independent System Operator (CAISO)’s Extended Day-Ahead Market, or EDAM. EDAM is expected to launch next year.
John Tsoukalis with the consulting firm Brattle Group — which studied day-ahead market benefits for both PNM and EPE — said by joining Markets+, EPE will be able to optimize a grid connection point known as the Eddy Tie. This piece of infrastructure, located near Artesia, allows EPE to trade electricity with New Mexico’s other investor-owned utility, the Southwestern Public Service Company (SPS), as well as other Xcel Energy utilities. This tie also allows El Paso Electric to access resources from the Southwest Power Pool.
That optimization wasn’t the only reason EPE chose to go with Markets+. EPE officials said Markets+ has a more transparent governance structure, though that could change based on legislation pending in California. They further said EPE believes Markets+ will bring more reliability and interconnection to the utility than EDAM could provide.
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