FERC orders Western grid operators to report on seams by Sept. 30
As Western electricity markets expand, federal regulators are requiring two major grid operators to show how they coordinate across the boundaries between their systems.
The Federal Energy Regulatory Commission ordered the California Independent System Operator and Southwest Power Pool to submit one joint report by September 30, 2026. FERC issued the directive on July 16 in Docket AD26-10.
The order is a reporting and public-comment step. It is not a merger of the two markets and does not directly change household electric bills.
What FERC ordered
The report must address seams between the CAISO and SPP markets and seams between either market and neighboring balancing authorities.
FERC requires the operators to describe coordination efforts already under way, identify specific operational problems connected to new market developments, outline plans and schedules for resolving those problems, and identify areas where the operators have not aligned.
After the filing, FERC will accept public comments for 30 days. Those comments will be limited to seams-management and market-coordination issues discussed in the report.
Why the question is becoming more urgent
CAISO’s Extended Day-Ahead Market began operating in May 2026. In a July 7 CEO report, CAISO described the first month as a stable launch with active interregional trading, while also acknowledging early volatility, timing delays, settlement adjustments and other issues still under review.
CAISO said EDAM transfers reached as much as 600 megawatts in its first month. That figure, along with the operator’s assessment of price formation and market performance, comes from CAISO’s own report and is not an independent evaluation of EDAM’s long-term benefits.
SPP also expanded its service territory into the Western Interconnection on April 1, 2026. SPP describes its Western Energy Services as contract-based products for utilities. One proposed initiative, Markets+, would centralize day-ahead and real-time unit commitment and dispatch for participating utilities.
Markets+ is planned for October 2027. CAISO’s July report said CAISO and SPP are working toward an operating agreement covering issues specific to the two operators by the time Markets+ goes live. That agreement remains a stated goal, not a completed arrangement.
What “seams” mean on the grid
A grid seam is a boundary between systems that may use different market rules, schedules, dispatch procedures, congestion-management methods or reliability practices.
Those differences can affect how power is scheduled across an intertie, how congestion is managed and how quickly operators can respond when supply and demand change. They become especially important when electricity must move across regions during extreme heat, wildfire-related outages, drought, transmission constraints or uneven renewable generation.
The report will also matter to utilities, power marketers and transmission operators that need to understand which rules apply when transactions cross market or balancing-authority boundaries.
Reliability context
FERC’s 2026 summer assessment said resources and operating reserves were adequate in all assessment areas under normal conditions. It also identified possible reliability challenges in the Northwest portion of the Western Electricity Coordinating Council area under extreme operating conditions.
That assessment did not predict a blackout or an imminent shortage. It provides context for the seams review because extreme heat, drought, wildfires, low hydropower output and transmission constraints can increase the importance of coordination and available power transfers.
What happens next
The next concrete milestone is the joint CAISO-SPP filing due September 30, 2026. The document should show where coordination already exists, where operational problems remain and whether the operators have agreed on schedules for addressing them.
The filing could identify unresolved disagreements rather than present a final solution. FERC’s subsequent 30-day comment period will give regulators, utilities, market participants and other interested parties a chance to respond to the seams and coordination issues discussed in the report.
For consumers, there is no immediate rate action from this order alone. Any effect on reliability, wholesale costs or future electric bills would depend on later operating changes, market-design decisions or regulatory actions.
Sources
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