August 11, 2023

PRC looks to develop guidelines for utility participation in regional energy markets

The New Mexico Public Regulation Commission wants to develop guidelines for utilities that want to join regional transmission organizations or similar partnerships aimed at distributing power across multiple utilities.

These organizations can improve grid security by allowing utilities that do not have enough electricity to meet demands to purchase power from those that may have a surplus. This is done often on a day ahead basis.

Commissioners voted Thursday to open a docket and request information from investor-owned utilities to help the regulators develop regulations and guidelines.

Investor-owned utilities such as the Public Service Company of New Mexico and El Paso Electric will be the main entities impacted. Southwest Public Service Company already participates in regional transmission organization and the PRC is requesting that SPS provide some information based on its experiences.

While the PRC is focused on investor-owned utilities, rural electric cooperatives and other stakeholders are also invited to participate in the process.

The PRC plans to discuss information gathered from utilities and stakeholders during a Sept. 14 meeting.

Commissioner Gabriel Aguilera spearheaded the effort to begin developing guidelines.

“The purpose of this as I see it is to discuss and develop the guidance principles and expectations for electric utilities participating in a regional market, regional market being a day ahead market, or full RTO or ISO,” he said.

An ISO, or Independent System Operator, is similar to a regional transmission organization except it serves a smaller geographical area. 

“I think that stakeholders’ comments here about what they expect to get out of retail markets will be very valuable as we try to develop the guidance principles and expectations,” Aguilera said.

The order soliciting comments and opening the docket contains more than a dozen different topic categories each with multiple questions.

Aguilera said he expects this will garner a lot of information that will require multiple days of workshops to address.

Regional transmission organizations must receive approval from the Federal Energy Regulatory Commission to operate and, currently, there is not one that serves the western United States.

California does have an ISO that has proved beneficial in keeping the lights on during heat waves.

SPS, which is a subsidiary of Xcel Energy, participates in the Southwest Power Pool, which is a regional transmission organization serving a small section of New Mexico as well as parts of Texas, Oklahoma, Montana, North Dakota, South Dakota, Nebraska and Kansas.

Over the past few years, there have been discussions about creating a regional transmission organization to serve the western states.

This interest is reflected in the number of utilities that have joined the California ISO’s Western Energy Imbalance Market. This allows utilities to buy and sell power around the time that the electricity is consumed. Both PNM and EPE have joined the WEIM.