Legislation Opens the Door for Colorado to Join an Independent West-wide Electricity Market Offering Cheaper, More Reliable Clean Electricity

BOULDER, Colo. — The pathway to a bigger, better regional electricity market has opened in the West, a move that would maximize cost savings for Coloradans and strengthen energy reliability. Legislation passed and signed in California removes barriers to the creation of a truly independently-governed Western market, representing interests across the region to provide fair, impartial oversight of electricity trading. The new Regional Organization is expected to be established in early 2026.

Expanded trading of electricity across the West is one of the most powerful tools to reduce costs, strengthen reliability and integrate clean energy. Colorado and the rest of the West enjoy abundant renewable energy potential, but underutilized infrastructure and outdated trading practices mean that low-cost clean energy is often wasted while utilities scramble for power from expensive peaking plants, even in extreme weather and grid emergencies. 

Colorado’s largest utilities have consistently argued California-led governance was a key barrier to participation in a West-wide market. To avoid California governance, Xcel Energy has gone so far as to pursue joining a market governed by the Southwest Power Pool in Little Rock, Arkansas. This despite the fact that numerous independent studies conducted to-date have demonstrated the significant ratepayer advantages of a single regional market, including a May study that shows Xcel customers would save millions of dollars more per year by joining the West-wide market than by joining SPP.

Colorado could be a key architect of the new regional organization that will chart the future of clean electricity in the West. There is a new pathway to our clean energy future, and Colorado should seize the opportunity to lead the way.

“These steps toward independent market governance expand the window for regional cooperation to support clean, affordable and reliable electricity at a moment when federal actions are undermining clean energy progress and causing rates to go up for Colorado consumers,” said Katie Schneer, Manager of State Climate Policy at Environmental Defense Fund. “Given action at the California legislature, we encourage Colorado utilities and regulators to reevaluate the benefits of different market options and ensure that the choices made are in the best interest of Coloradans.” 

Sydney Welter, Policy Advisor at Western Resource Advocates, said, “With multiple market options available, Colorado regulators, utilities, and customers now have the opportunity to truly evaluate all choices. We must select the market that will best support our clean energy goals and needs in areas such as wildfire resilience and growing EV adoption.”

"This is a game changer. With the passage of AB 825, this is now a conversation about building a Western regional energy market that gives all states an equal seat at the table," said Brian Turner, Director at Advanced Energy United. "Colorado decision-makers and utilities should be rethinking prior decisions in light of this development so the state can have the strongest, most reliable, flexible, clean, and affordable grid.”