This wholesale market is operated by the Southwest Power Pool (“SPP”), a Regional Transmission Operator that is licensed and regulated by the Federal Energy Regulatory Commission (“FERC”).
The SPP wholesale market is called the Integrated Marketplace and it operates to ensure only the most cost-effective electric generation gets dispatched. The Integrated Marketplace runs complicated algorithms that determine the cheapest option for generation across the region. Local utilities benefit in two distinct ways from the Integrated Marketplace. First, if it is cheaper for utilities to buy energy from the Integrated Marketplace instead of generating that energy from their own power plants, they save money on fuel and variable costs of operating those power plants, and those savings are realized by utility customers. Second, if a utilities’ generating plants are dispatched by the market, they will usually be paid a market-clearing price above their cost to generate. This creates revenues from the sale of the energy, which go directly to customers.
The SPP Integrated Marketplace is a way to create savings for customers because all savings and market-benefits are passed through to customers.