Wholesale electricity markets

Coming soon to Colorado?

Wholesale electricity refers to bulk power that is sold by electricity producers to utilities or power marketers, who then sell the electricity to retail residential and business customers. 

Regions that have competitive wholesale bidding markets belong to a Regional Transmission Organization (RTO). However, Colorado is a monopoly state that currently supports neither wholesale competition nor retail competition.

A group of Colorado utilities is proposing to join the Southwest Power Pool RTO  (see RTO map).  However, there are several alternatives to joining SPP that should also be investigated by the Public Utilities Commission.

RTOs and wholesale markets

An RTO is an independent, non-profit organization that operates the high-voltage transmission lines of a group of utilities over a large region. An RTO also operates a competitive wholesale electricity market where electricity producers bid into the market and the lowest bids are chosen to dispatch their electricity to consumers.  Electricity trading over large regions is more efficient and cost-effective, and also allows greater integration of variable renewable energy and reduces curtailment (waste) caused by local oversupply.

Colorado does not currently belong to an RTO, but a group of Colorado utilities called the Mountain West Transmission Group (MWTG) is proposing to join the Southwest Power Pool (SPP), which is the RTO to our east. Hearings on the proposal (Docket no. 16I-0816E) are on-going at the Colorado Public Utilities Commission (PUC).  However, there is also an expanding Western RTO called CAISO, as well as one or more new RTO possibilities that may or may not be a better choice for Colorado and the Western Interconnection.

Additional information