To build trust in US West, stakeholders lean toward independent Markets+ board

Stakeholders interested in Southwest Power Pool's planned Markets+ service in the US West largely support a governance structure that creates an independent governing board for the new market, arguing the approach would instill trust and confidence among participants, according to an April 25 presentation.

The issue is significant because, with the diversity of geography and policy in the West, governance has long been a stumbling block for the creation of a regional grid operator in the West.

Potential future members of Markets+ had also considered foregoing an independent board and relying instead on a planned Markets+ Participants Executive Committee to shape the market, according to the presentation discussed at an April 25 meeting of the Markets+ Governance Design Team.

But most stakeholders that responded to a survey on the issue said that an independent board would help ensure their voice is heard, according to written comments discussed at the meeting.

Independent board

Of the 23 entities that responded to the survey, 60% supported an option that would create a nominating committee and independent board for Markets+. The option also potentially would change SPP's bylaws to ensure some SPP board members have experience in the West and to add a Markets+ seat to the SPP Corporate Governance Committee.

"This option creates a robust, autonomous Markets+ governance structure with an independent governing board and sector-based nominating committee, while also making additional changes to the SPP [regional transmission organization's] existing governance to recognize the addition of Markets+, which helps set the stage for potential full participation by Markets+ participants in the SPP RTO down the line," the Western Power Trading Forum said in written comments.

SPP's Western Energy Imbalance Service market, which launched in February 2021, balances generation and loads in real-time. SPP is now developing its new service called Markets+, which will offer real-time and day-ahead services in the West. Some members in the Western Interconnection that participate in Markets+ may later join SPP's full regional transmission organization.

The proposal to create an independent board is a departure from the governance structure for the WEIS. The WEIS currently has a State Commission Liaison, a Western Markets Executive Committee, and a Western Markets Working Group, but it does not have its own independent board.

Consent agenda

The survey also delved into some of the details of how an independent Markets+ board would work. For instance, nearly 78% of stakeholders backed the idea that actions approved by the Markets+ board would be placed on the SPP board's consent agenda unless a Markets+ stakeholder requests that it be moved to the regular agenda.

The consent agenda concept could effectively give the governing board delegated authority over issues that uniquely apply to Markets+, an anonymous commenter said. "Given some of the trust issues we have in the West, this may be a very effective way to get parties comfortable with the governance structure of Markets+," the comment said.

The Markets+ governing board members qualifications should include experience in the Western Interconnection, market experience, and regulatory and legal experience, the survey found. Board members should also have recent, relevant senior management expertise as well as financial independence, the survey found. The board should have diversity in terms of individuals, geography and generation mix, the survey said.

Other options

But not all stakeholders supported the independent board approach. One anonymous commenter said another board seems to just add one more layer of approval to get anything done, given the fact that SPP already has an independent board. "Customers of participants should not bear the costs of things that are not necessary," the commenter said.

Meanwhile, the Salt River Project suggested a different structure in which Markets+ would have still an independent board, committees and working groups, but SPP would play the role of a market operator. SRP said the approach could be similar to the structure of the Western Resource Adequacy Program. The Western Power Pool developed the WRAP and then hired SPP to be the program operator.