While the US power markets operate independently, they are being reshaped by common drivers such as the growth in renewable generation and battery storage. Here we review four key developments across Western US and Texas: SPP and Markets+, CAISO WEIM, CAISO EDAM and ERCOT RTC+B. With the pace of market evolution accelerating, we highlight similarities and differences in market design and examine how each market might evolve in the future.
While some of the structural market evolutions may appear subtle, each will have a significant impact on how power is traded and open up new opportunities for trading companies. The power markets we describe are expanding, becoming more automated, and are increasingly impacted by renewable generation and battery storage. Each market is increasing the emphasis on flexibility and managing congestion.
Trading companies need to consider not only buying and selling energy, but optimizing across energy, transmission, ancillary services and energy storage as well as geography.
SPP
In April 2026, Southwest Power Pool (SPP) expanded its Regional Transmission Organization (RTO) footprint into the Western Interconnection and discontinued the Western Energy Imbalance Service (WEIS). WEIS, a real-time imbalance market, had served participating utilities in the Western Interconnection, primarily in the Mountain West region, since February 2021. Like the CAISO WEIM market we discuss below, it balanced intra-hour electricity needs between market entities.
As of April 1, the seven WEIS participants joined SPP’s Integrated Marketplace. These participants became full SPP RTO members, gaining access to the marketplace and associated RTO services including transmission planning and reliability coordination. This makes SPP the first RTO in the US to provide full services in both the Eastern and Western interconnections of the US power grid.
Separately, SPP is developing Markets+, a new Western day-ahead and real-time market with a broader Western footprint. Markets+ is intended to cater to Western utilities that want organized-market services but do not want to become full members of an RTO. Markets+ will centralize day-ahead and real-time unit commitment and dispatch. It builds on SPP’s experience of operating Western energy markets, including WEIS, however it is a new market rather than a conversion of the WEIS market. According to SPP, Markets+ will pave the way for the reliable integration of a rapidly growing fleet of renewable generation. Markets+ is currently in phase two with a planned go-live in October 2027.
With the expansion of the RTO and the addition of Markets+, SPP is establishing two distinct market structures to serve the Western Interconnection while also serving as the program administrator for the Western Pool’s Western Resource Adequacy Program (WRAP).
WRAP is designed to ensure that participating utilities have sufficient qualified capacity and transmission to serve their load under stressed conditions. WRAP has important implications for Markets+ because Markets+ participants will be required to participate in WRAP.
CAISO WEIM
The Western Energy Imbalance Market (WEIM), operated by the California Independent System Operator (CAISO), covers most of the Western US, including California and parts of neighboring states. WEIM launched in 2014 and currently has 22 active participants performing as balancing authorities, load-serving utilities and generation resource owners across 11 states.
WEIM balances intra-hour electricity needs between entities. The primary objective of the market is facilitating five-minute real-time dispatch, based on least-cost offers, to improve the imbalance energy sharing across balancing authorities.
The wider aim is to lower production costs, reduce renewable curtailment and improve congestion management, with CAISO reporting cumulative market benefits of $6 billion since the market’s inception.
WEIM is real-time imbalance market, not a day-ahead or full RTO market. As such, it does not support the financial trading of derivatives, day-ahead markets, ancillary services or the financial trading of congestion rights. Participation is voluntary, with no requirement to give up full operational authority.
The WEIM market optimizes and clears imbalance energy in two real-time layers. There is a 15-minute market for short-term scheduling/commitment/redispatch and a five-minute real-time dispatch for granular balancing. This enables the market to trade the same energy imbalance product at two distinct time horizons. WEIM co-optimizes the five-minute real-time dispatch market with a flexible ramping product that secures upward/downward ramping capability, e.g. to further accommodate renewables uncertainty.
While the 15-minute and five-minute markets are two layers of WEIM’s real-time market, they serve distinct operational purposes. The 15-minute market looks ahead and economically re-commits or re-dispatches resources for 15-minute intervals. The scheduling and prices are based on 15-minute blocks, and set every 15 minutes, approximately 37.5 minutes ahead.
In this 15-minute market, the most common trades include imbalance energy awards for the specific 15-minute interval, flexible ramping product procurement for the upcoming 15-minute intervals, and adjustments to imports/exports based on updated forecasts.
The five-minute real-time dispatch market fine tunes the dispatch to meet actual conditions right before and during the delivery interval. The dispatch instructions and pricing are set in five-minute intervals.
The typical trades in this five-minute market include imbalance energy to balance last-minute deviations in load, renewable generation and generator performance, as well as flexible ramping product deployment (if upward/downward ramping capacity needs to be activated).
This market runs every five minutes using SCADA telemetry – real-time operational data sent to the system operator from grid-connected assets including generators, batteries, large consumers and the grid infrastructure – along with the latest generation and load forecasts.
WEIM has become the de-facto real-time balancing platform delivering scale benefits, renewable integration and reliability coordination. The next evolutionary step is to expand those efficiencies into the day-ahead market via the Extended Day Ahead Market (EDAM), as we discuss next. CAISO has indicated that WEIM will remain the real-time layer, operating alongside EDAM’s voluntary day-ahead optimization.
CAISO EDAM
The new CAISO EDAM, or Extended Day Ahead Market, went live May 1, 2026, initially serving three balancing authorities – with several additional balancing authorities committed to join the market in the fall of 2026 and in 2027, and several more indicating their intention to join.
It differs significantly from the more established CAISO Day Ahead Market (DAM), most notably in that it allows balancing authorities outside of CAISO to voluntarily participate in a unified day-ahead market.
The CAISO DAM currently covers the state of California and a few balancing authorities that are part of the CAISO footprint. Participants are limited to entities who are within CAISO’s balancing area or directly connected. All load-serving entities, utilities and generators within the CAISO balancing authority area are required to participate in the Day Ahead Market and the Real-Time Market.
CAISO acts as the single system operator and all grid-connected resources and load participate under a common set of market rules, dispatch processes and settlement procedures.
The new EDAM market, on the other hand, extends beyond the state of California to include other Western US utilities and balancing authorities. One of the key objectives of the EDAM market is to improve market efficiency by optimizing across a wider footprint.
This is intended to reduce costs by utilizing more diverse and potentially cheaper generation resources. Another goal is improved reliability through broader reserve sharing.
Currently there are about 200 registered market participants in the CAISO wholesale market. About 120 of these companies participate in the Day Ahead Market, including load serving entities, generators, IPPs, utilities, traders, scheduling coordinators and some financial players.
Seven balancing authorities have committed to joining EDAM, with three more in discussions. It is estimated that each balancing authority will bring between five and 20 additional market participants. Many Independent Power Producers (IPPs) operating within the committed balancing authorities, as well as marketers and traders, have expressed interest in participating in EDAM.
The early stages of EDAM could support between 30 and 100 non-CAISO participants, and the market may attract players from as many as 14 Western states. Because of its broader geographic base and the optional participation model, within several years EDAM is likely to surpass the DAM regarding energy optimized daily and total load served by the balancing authorities.
Market participants who are already within the CAISO balancing authority area will automatically participate in EDAM as it extends the day-ahead markets. External balancing authorities will be able to participate in EDAM without joining the CAISO balancing authority area, and without full ISO integration. When an external balancing authority joins EDAM it does not give up its status as a balancing authority, but instead agrees to participate in the EDAM day-ahead and co-optimized market under shared rules.
While balancing authorities are the primary entities that can opt into the EDAM market, trading companies, IPPs, marketers and load aggregators can also participate. These entities must be registered with CAISO as a market participant, as well as being physically or contractually located within a balancing authority that has joined EDAM.
An agreement with a balancing authority that has opted into EDAM is critical, as the balancing authority acts as their host into the market. All market access to EDAM will be via that balancing authority.
These trading companies can then participate in energy bidding (physical or virtual), generation supply, ancillary services, and/or congestion revenue rights markets. Physical delivery and scheduling will need to be coordinated with their balancing authority and the trader must utilize transmission capacity that their balancing authority has made available for EDAM optimization.
Participation in EDAM via their balancing authority allows these companies to submit day-ahead virtual or physical energy bids; participate in the ancillary services and congestion revenue rights markets; and provide supply plans if they are asset backed.
The EDAM real-time follow-up operates similarly to the current CAISO and WEIM markets. For virtual/financial bids, no physical delivery is required. Physical players must monitor deviations and submit real-time dispatches.
ERCOT and RTC+B
ERCOT, the Texas wholesale electricity market, has undergone a significant shift towards renewables in the past few years. According to IEEFA, in June 2024, 36% of ERCOT’s peak demand (peak hour in June) was supplied by solar and wind; that increased to 45% in June 2025.[i] ERCOT’s published fuel generation mix data indicates that wind and solar combined to provide 37% of generation in calendar year 2025, and 43% in the first six months of 2026.[ii]
Texas is currently slightly behind California in terms of installed battery capacity, but has a more aggressive program of investments. Given the currently planned projects, ERCOT battery storage will surpass CAISO within a couple of years.
Battery storage has improved ERCOT’s grid reliability, as proven in both recent severe winter storms as well as on peak summer demand days. Battery storage is not only increasing the reliability of the grid, but also substantially reducing the costs associated with these extreme events.
Finally, battery storage is helping to smooth net peak demand. ERCOT’s reliance on wind and solar means that 7pm to 8pm is a key time: solar generation is dropping and wind generation has not yet ramped up. Battery storage has helped lower the price spikes associated with this time window.
In 2024, S&P Global estimated 33 entities had invested in ERCOT battery energy storage systems (BESS), with the top 10 investors controlling about 72% of BESS systems.[iii] ERCOT does not provide insight into the ownership and operation of BESS, but the installed capacity has increased significantly, as well as ERCOT’s battery capacity as a percentage of peak load.
In December 2025, ERCOT went live with their Real Time Co-Optimization plus Batteries program (RTC+B). This represents the most significant redesign of the ERCOT wholesale power market since the launch of the nodal market in 2010. The program was introduced to improve the operational efficiency and reliability of the grid by increasing renewable generation and battery storage.
ERCOT’s substantial increase in renewable generation meant that physical and system conditions can change significantly between the day-ahead scheduling and real-time operations. The market’s previous design often left ERCOT short on reliability services, requiring manual operator actions.
The central feature of RTC+B is the real-time co-optimization of energy and ancillary services. Previously ERCOT procured most of the ancillary services that help to keep the system stable in the day-ahead market, while the real-time market focused on energy.
Under RTC+B, the system operator simultaneously optimizes both energy and ancillary services in the real-time, security-constrained, economic dispatch model. This allows ERCOT to adjust ancillary service awards dynamically as conditions change, rather than relying on prior day-ahead commitments.
The model integrates the ancillary service demand curves directly into the co-optimization process. This allows scarcity pricing and ancillary service procurement to be determined within the same real-time dispatch algorithm.
Under the RTC+B model, ancillary service prices and awards now emerge from real-time dispatch alongside energy prices. This alters the bidding strategies for generators, storage operators and marketers and brings ERCOT’s market design closer to that of other US RTO/ISO markets.
An ERCOT update indicated early benefits from the co-optimization of energy and ancillary services under RTC+B.[iv] Ancillary services prices are reflecting the generation and operating requirements as expected, and unit commitment can now trade off economically between energy and ancillary services, while better managing congestion by re-allocating.
How Capco can help
Capco has a history of helping customers navigate market change. When ERCOT went to a nodal market configuration, we helped ensure customers were ready. Before there were competitive Bid-to-Bill options in the market, Capco built custom Bid-to-Bill solutions that are still being used today. We also helped implement off-the-shelf solutions, ready and tested for the new market environment.
Our experts ensure that integrations to the energy markets, and the ETRM solutions that act as systems of record for approved and executed transactions, are configured to handle market change. New markets mean new transactions, new fee structures, new GL treatments, new business processes, and new configurations across the board. We are trusted to reduce transactional risk when organizations encounter market change.
Customers need people on their team who understand the various transactions and scenarios to ensure test cases encompass the full breadth of each market change and its impacts. Capco has experts who talk directly to the markets including ERCOT, CAISO, WEIM and SPP. Just as we were a key early tester and integrator in ERCOT’s switch to nodal back in the day, we were one of the primary testers and integrators for the RTC+B changes in December 2025. If you want to make sure you are prepared for electricity trading market changes, we can help!
References
1. https://ieefa.org/resources/solar-growth-reliability-undercut-opposition
2. https://www.ercot.com/gridinfo/generation/index.html
4. https://www.ercot.com/files/docs/2026/02/02/10.2-Commercial-Markets-Update.pdf