Farmington Electric Utility System Director Hank Adair says joining a regional transmission organization could reduce by 25% the price the utility pays to purchase power.
Adair told the Tri-City Record that the utility plans to join Southwest Power Pool’s RTO West starting in 2026.
Utilities across New Mexico are looking at joining RTOs because of the benefits they provide, including lower costs of power from the market and more efficiency in managing electricity flows throughout the region.
RTOs allow participating utilities to participate in an integrated marketplace and engage in reliability coordination. Farmington had the choice of joining the California Independent System Operator’s RTO or the one through Southwest Power Pool.
Adair said FEUS chose to go with Southwest Power because of “where we’re located and what other utilities that we’re with are doing.”
Some of the other utilities planning to join Southwest Power’s RTO West include Tri-State Generation and Transmission Association and the Western Area Power Administration.
Tri-State provides power to rural electric cooperatives throughout New Mexico and Colorado, including La Plata Electric Association in Durango, Empire Electric Association in Cortez and Northern Rio Arriba Electric Cooperative in Chama.
Western Area Powers’ decision to join an RTO was one of the reasons FEUS chose to do the same, according to Adair.
Adair said Western Area Power has served as FEUS’ balancing authority in the past. When it announced it would join an RTO, “Farmington had a choice to either become our own balancing authority” or to join RTO West and allow Southwest Power to act as the balancing authority, Adair said. He said another option was to partner with another utility that would act as FEUS’ balancing authority.
“Based on where we’re at and our interest in maintaining or being with SPP, we chose to join the RTO,” Adair said.
The Federal Energy Regulatory Commission approved allowing seven entities to join Southwest Power’s RTO as transmission-owning members, including Tri-State and Western Area Power, on March 20. This will make Southwest Power’s RTO the first one to provide transmission and interconnection services across two of the country’s three major interconnections.
“The Western expansion of the SPP RTO bolsters reliability and resiliency for our members as we grow and diversify our resource portfolio while reducing emissions,” according to Tri-State Generation and Transmission Association CEO Duane Highley, writing in a news release after the FERC decision.
“We greatly value 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 help us to further reduce costs for our members across the West,” he said. “Prior to SPP RTO West entry, we will be making a filing with our state regulators highlighting these market benefits.”
Those seven entities – as well as FEUS – are already participating in Southwest Power’s Western Energy Imbalance Service.
While FEUS was not one of the entities included in the FERC approval, the action paves the way for utilities like FEUS to join Southwest Power’s RTO. Because Farmington is a municipal-owned utility, it does not require approval or oversight from the New Mexico Public Regulation Commission to join an RTO.
Southwest Power stated in a news release that it is working with additional Western utilities that have expressed interest in joining the RTO.
