The Western grid is splitting in two. Not physically. Electrons don't care about market boundaries. But institutionally, in ways that will shape regional electricity economics for decades.
CAISO's Extended Day-Ahead Market (EDAM) launched in 2024 with five members covering 145 GW.
SPP's Markets+ secured FERC approval in early 2025 and expects first operations by 2027. Between them, they're dividing the Western Interconnection into competing camps, with a handful of uncommitted utilities holding the balance.
The stakes extend well beyond operational efficiency gains. A fragmented West means persistent seams issues, suboptimal renewable integration, and billions in foregone savings. A unified market would deliver roughly $747 million in annual gross benefits, according to Energy Strategies modeling. But that's not what's emerging.
The Emerging Fault Lines
EDAM's current footprint tells a story of California's gravitational pull. CAISO, PacifiCorp, Portland General Electric, Idaho Power, and the Balancing Authority of Northern California have committed—a contiguous block stretching from the Pacific Northwest through the Mountain West. The Los Angeles Department of Water and Power is expected to follow, adding the nation's largest municipal utility to CAISO's orbit.
Markets+ has assembled a different coalition. Bonneville Power Administration's decision to join SPP's framework was the defining moment. BPA operates 75% of the Pacific Northwest's high-voltage transmission and markets power from 31 federal hydroelectric facilities. Where Bonneville goes, others follow. Arizona Public Service and Public Service Company of Colorado have committed, creating a footprint that brackets EDAM's territory.
EDAM vs. Markets+: The Western Divide
EDAM vs. Markets+: The Western Divide. Source: Article data. EDAM launched with 145 GW capacity; BPA's 75% transmission control anchors Markets+ in the Pacific Northwest.
NV Energy's choice proved pivotal. The utility evaluated both markets extensively before announcing its EDAM commitment over the summer. A Brattle Group study concluded New Mexico utilities would see millions more in annual benefits from EDAM—the kind of analysis that's now driving decisions across the region. PNM Resources is planning to join CAISO's market based on similar modeling.
The uncommitted utilities—Salt River Project, Tucson Electric Power, and a handful of smaller players—now face a strategic calculus complicated by network effects. Join the market where your neighbors are, or the one with better governance?
The Governance Problem That Won't Die
CAISO's board structure remains the central tension in Western market politics. The grid operator answers to California's Governor, and decisions affecting multistate operations theoretically require state interests to align. For utilities already skeptical of California's regulatory ambitions, this is more than theoretical concern.
CAISO's 2024 governance reform created a Western States Committee with advisory authority over EDAM tariff changes. The reform was meant to address exactly these concerns. It hasn't. Critics note the Committee lacks binding decision rights—California retains effective control over market rules, and non-California participants remain, in essence, guests in someone else's market.
SPP offers the contrast these utilities wanted. The RTO operates as a FERC-jurisdictional entity with a stakeholder-elected board and Regional State Committee representatives holding actual voting seats. This structure mirrors the governance that's worked for decades in the Eastern Interconnection. For utilities answering to multiple state commissions, SPP's model reduces a specific kind of regulatory risk: the risk that California's policy priorities will drive market rules that disadvantage out-of-state resources.
The Cost of a Fragmented West
The Cost of a Fragmented West. Source: Energy Strategies modeling. A unified Western market would deliver $747M annually—benefits largely foregone under current fragmentation.
Bonneville's decision reflected exactly this calculus. BPA Administrator John Hairston cited governance concerns explicitly in announcing the Markets+ commitment. For a federal power marketing administration serving utilities across multiple states, the appeal of SPP's stakeholder model proved decisive.
The Physics of Fragmentation
California curtailed 2.4 million MWh of solar and wind in 2024. That's enough electricity to power 350,000 homes for a year—simply wasted because the grid couldn't absorb it when it was generated. EDAM provides a mechanism to export this surplus to Arizona, Nevada, and the Mountain West during midday solar peaks.
Markets+ offers similar integration benefits but with different flow patterns. SPP's existing wind fleet in Wyoming and Colorado could serve Desert Southwest load centers during evening ramp periods, when California's solar generation drops and demand peaks. The complementarity is obvious: what California needs in the evening, the Mountain West has in abundance.
The tragedy is that a unified Western market would optimize across both patterns simultaneously. Instead, seams between EDAM and Markets+ will create friction. FERC's technical conference on Western seams coordination acknowledged the challenge, with SPP proposing an intertie trading platform that "could facilitate more efficient day-ahead seams transactions using price signals and system conditions." Could facilitate—the conditional tense reveals how much work remains.
The Eastern Interconnection's experience offers a cautionary tale. PJM's expansion into the mid-Atlantic during the early 2000s triggered cost allocation disputes that reached FERC repeatedly. Seams issues between PJM and MISO persist today—different capacity market designs create pricing disparities at interface points that distort investment signals and complicate resource planning. The West is building similar problems into its market structure from the start.
Western Market Commitments Timeline
Western Market Commitments Timeline. Source: Article data. The next 18 months will determine whether the West ends up with permanent market fragmentation.
The Decision Window Narrows
SPP expects final tariff approval for Markets+ by mid-2026, with operations beginning in 2027. EDAM is already operational. Utilities making commitments now are locking in market participation for decades. The next 18 months will determine whether the West ends up with two mid-sized markets in permanent competition or whether one framework achieves the scale to become the default option.
FERC proceedings will shape the outcome. Docket ER25-789 addresses EDAM's governance framework, with intervenors challenging California's continued control over tariff changes. A ruling expected by Q2 2026 could either validate CAISO's reforms or force more substantial restructuring. Markets+ implementation continues under Docket ER24-2156.
State regulatory proceedings matter equally. Arizona Corporation Commission and Colorado PUC must approve utility participation in either market. These proceedings examine the cost-benefit analyses that utilities are using to justify their choices—analyses that rely on assumptions about future resource mix, transmission expansion, and participation by neighboring utilities.
The utilities still uncommitted face an uncomfortable truth: waiting for clarity may mean losing leverage. Once market boundaries solidify, late entrants will accept terms shaped by early participants. The uncommitted aren't just choosing a market—they're deciding whether to shape Western electricity's future or merely accept it.
About the Author
Dr. Sayonsom Chanda
Dr. Sayonsom Chanda is an electrical engineer and senior scientist with more than a decade of experience in developing AI, ML, and other advanced computing solutions for the electric utility industry in US and India. He is also an energy policy thinker and a published author with more than 20 papers and 1 book.
