A coalition of environmental and energy groups and state agencies have filed their opening arguments against Bonneville Power Administration as it asks a federal court to stop the power agency from moving to a new energy market based in the eastern United States. 

Arguing that the planned move to the Southwest Power Pool’s Markets+ day-ahead energy market violated federal energy and environmental laws, the coalition says BPA’s decision will have significant impacts on utilities, energy consumers and the environment.

“(BPA) chose to join Markets+ even though doing so would cause Bonneville substantial losses and would increase power costs for the entire Pacific Northwest,” the parties argue in their brief to the Ninth Circuit U.S. Court of Appeals.

They move to the new market “will increase coal-generation … and undercut reliance on clean energy. Further, it will change how and when its hydroelectric dams generate power, harming endangered salmon.”

BPA has not yet filed a response with the court but its officials have previously defended the move to Markets+ as ultimately bringing economic benefits for its customers and more equitable management of the region’s energy resources.  

“The policy sets the agency’s strategic direction for future processes and provides the best option to meet BPA’s long-term strategic business interests and statutory mission,” said BPA administrator and CEO John Hairston said in a May, when BPA announced the move to Markets+.

As a “day-ahead” market, participating members sell and purchase power for distribution the following day. BPA currently sells its power via a “real time” market under the state of California’s Independent System Operator, where energy demand is managed by participants throughout a given day.

Officials with BPA have said the real-time market requires more intensive management and coordination among the agency and the utilities it serves. Also, as it is ultimately controlled by the state of California, it potentially puts that state’s power interests ahead of those of other states served by BPA across the West.  

But the five organizations fighting the move – NW Energy Coalition, Idaho Conservation League, Montana Environmental Information Center, Sierra Club and Oregon Citizens’ Utility Board – say BPA failed to consider the potential environmental impacts of the decision, as noted in a study by Brattle Group, a global industry consultancy firm.

“The study found that Bonneville’s proposed decision to join Markets+ would increase (anticipated greenhouse gas) emissions from the Western grid by 4 million metric tons annually because of ‘gas-to-coal switching’ in predicted Markets+ trading,” according to court documents.

The lawsuit also alleges BPA failed to follow the 2021 Northwest Power Plan, an element of the Pacific Northwest Power Planning and Conservation Act, which requires the most “cost-effective” resource as well as considering the environmental consequences when joining an energy market.

That is offered by the Extended Day Ahead Market, or EDAM, that is now available through the California-based operator of the current real-time market. Bonneville’s own production cost modeling showed that EDAM would provide the highest net cost benefit.

“Bonneville chose to join Markets+ without ensuring its decision is consistent with the plan,” according to court documents. “Bonneville failed to prioritize the most cost-effective alternative, EDAM.”

Public power providers, including the three utilities that serve the Tri-Cities and its surrounding communities, have endorsed BPA’s move to a day-ahead market. They have said the new market’s design and governance structure is better suited to BPA’s hydroelectric power generation and will lead to more efficiency.