The Colorado Public Utilities Commission (PUC) has approved Xcel Energy’s plan to join the Southwest Power Pool’s Markets+, a day-ahead electricity marketplace, despite objections from consumer advocates and environmental groups over projected high costs and uncertain benefits.
During a Wednesday hearing, two of the three commissioners supported the move, which would allow Xcel to buy electricity a day in advance through the Arkansas-based transmission group and 30 other participants. This step is part of Colorado’s broader plan to transition toward an organized wholesale electricity market by 2030, aimed at improving grid efficiency, increasing renewable energy use, and cutting emissions.
Commissioner Megan Gilman opposed the plan, arguing that Xcel hadn’t met the legal requirement to show the benefits would outweigh the costs. She warned that the costs of joining this temporary market might delay or even derail Xcel’s long-term move toward a fully organized wholesale market, which could otherwise bring the state significant savings.
A 2021 PUC report estimated that full participation in an organized wholesale market could save Colorado $230 million annually. While 60% of the U.S. grid already operates under such regional markets—mostly in the East—Colorado is still in transition.
PUC Chairman Eric Blank said the potential for future savings outweighed the short-term financial losses. “Incurring these small losses in the near term potentially creates an opportunity to save orders of magnitude more per year,” he said.
Xcel Energy estimated the costs of joining Markets+ as follows: $2 million in startup fees, $14 million annually for operations over the first five years (dropping to $10 million annually thereafter), and $13–15 million in system integration costs. Critics argue these expenses could outweigh benefits for more than a decade.
Western Resource Advocates warned that Xcel’s customers would see no net benefit until 2039 and that staying in Markets+ could cause the utility to miss the state’s 2030 mandate for joining a regional transmission organization.
Advanced Energy United also opposed the decision. Regulatory Director Brian Turner called it a poor choice for ratepayers, grid reliability, and clean energy goals. He said his organization would request the commission to reconsider and instead urged Xcel to join the California Independent System Operator’s Extended Day-Ahead Market (EDAM), launching in 2026.
According to an Environmental Defense Fund report, EDAM could save Xcel $13.2 million annually, largely due to better access to renewable energy. However, Blank and other supporters of Markets+ argued that switching to EDAM could complicate system integration across Colorado.
Some experts and groups suggested Xcel skip joining a day-ahead market entirely and focus on transitioning directly to a full regional transmission organization.
Meanwhile, Colorado’s second-largest utility, Tri-State Generation and Transmission Association, is already moving toward joining the Southwest Power Pool’s full regional transmission organization.
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Katie is a senior who has been on staff for three years. Her favorite type of stories to write is reviews and features. Katie’s favorite ice cream flavor is strawberry.
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