The Federal Energy Regulatory Commission (FERC) on March 20, 2025, approved the Southwest Power Pool’s (SPP) plan to expand its regional transmission organization (RTO) operations into the Western Interconnection. SPP, which operates the grid and wholesale power markets from northern Texas to Montana, plans to launch its RTO West on April 1, 2026. Its Eastern Interconnection and Western Interconnection regions will be linked by three direct current (DC) interties that total 510 MW.

During the FERC’s monthly meeting, it confirmed that the proposal will likely enhance grid reliability and operational efficiency by consolidating transmission management under a single RTO, and is another major milestone for the market evolution in the western part of the US.

The commission also feels more work needs to occur on RTO West, however, especially on how the seams between markets and nonmarket areas will be managed, as these concerns were raised by the Colorado Public Utilities Commission (PUC), Xcel Energy’s Public Service Co. of Colorado, and Black Hills utilities. FERC hopes to address the seams issues — like data sharing, congestion management, market power mitigation, transmission availability, export-import management and intertie optimization — in the near future, to maximize reliability and consumer benefits.

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 (WAPA) – Colorado River Storage Project Management Center, WAPA – Rocky Mountain Region, and WAPA – Upper Great Plains Region.

Tri-State’s chief executive officer specifically confirmed the value of 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 helps it to further reduce costs for members across the West, in an SPP press release. SPP is also working with additional western utilities that are considering joining the RTO once its initial expansion is complete.

Separately, FERC in January 2025, approved SPP’s Markets+ real-time and day-ahead market for the west, which the grid operator aims to start in 2027.

The following matters were also discussed at the FERC meeting:

  • The White House has not directed the commission to support coal-fired generation, though it did authorize energy production using clean coal. The US had about 201 GW of coal-fired generation, accounting for 15 per cent of US capacity, as of December 31, 2024, down from 208 GW in 2023. During the current president’s first term, the US Department of Energy (DOE) in September 2017 had proposed rules that would have provided extra revenue to coal-fired and nuclear power plants to support grid reliability. FERC had unanimously rejected the proposal. As noted at the March 2025 meeting, FERC has authority over grid reliability, but states have jurisdiction over planning, building and restarting power plants.
  • FERC is considering reorganization possibilities to improve efficiency and speed up project permitting. The commission is developing a new process for reviewing projects under the National Environmental Policy Act, noting the current US administration withdrew the Council on Environmental Quality guidelines FERC 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.
  • FERC’s interconnection reform requirements, approved in July 2023, are critical in getting power supplies online, but more work is needed. Letters have been sent to grid operators that highlight how grid interconnection automation software can be used to speed the interconnection process. As a specific example, it was mentioned that it took two years for the Midcontinent Independent System Operator (MISO) 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. 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”, was also discussed.
  • Capacity in US interconnection queues fell 3.3 per cent in 2024, to 2,289 GW from 2,368 GW the year before, FERC said in its annual state of the markets report, released recently. Hybrid storage projects had the largest increases in new active project capacity in interconnection queues last year — up 40 per cent, to 419 GW — followed by natural gas projects. The US added 49 GW of nameplate capacity last year, mainly from solar, battery storage, natural gas and wind. Power plant owners retired 9.1 GW, mostly coal- and gas-fired plants in 2024, according to the report.

Meanwhile, electricity demand increased by 2.8 per cent across all major grid operators in 2024, driven by hot weather and higher demand peaks in California, Texas, and the Mid-Atlantic region.