On July 16, 2026, FERC issued an order directing California Independent System Operator Corporation (CAISO) and Southwest Power Pool, Inc. (SPP) to submit a joint report by September 30, 2026, on their efforts to coordinate operations along Western market seams. FERC specifically requests that CAISO and SPP: 1) provide details on efforts to date to address seams and market coordination, 2) identify seams and market coordination issues created by the development of organized markets in the West, 3) provide a plan for addressing identified issues, and 4) identify areas where market operators are not aligned on next steps.

FERC begins by noting that the Western electricity landscape has undergone significant change in the last 15 years, specifically through the development of novel wholesale markets. These wholesale market developments include CAISO’s Western Energy Imbalance Market (launched in 2014), CAISO’s Extended Day-Ahead Market (launched in 2026), SPP’s Western Energy Imbalance Service Market (launched in 2021), SPP’s Markets+ (expected to launch in October 2027), and the expansion of SPP’s Regional Transmission Organization footprint in April 2026. FERC notes that these market innovations have created an evolving multi-market landscape with new and evolving boundaries between markets, otherwise known as seams.

FERC’s order states that, in response to evolving wholesale market developments along seams, Western entities can build economic benefits, ensure reliability, and manage congestion through proactive coordination at seams. FERC states it supports the evolving developments in the West, but that coordination at seams is necessary for the markets’ successful operation, as detailed in a FERC Staff Whitepaper (available here). FERC explains that seams across various wholesale markets, market operators, and neighboring Balancing Authority Areas necessitate formal seams coordination agreements, especially given varying participation in new wholesale markets.

FERC explains that formal seams coordination agreements will play a central role in managing congestion and maintaining reliability across the developing wholesale markets. In particular, FERC argues real-time data sharing and agreed-upon rules for handling market-to-market conflicts and interchange scheduling will unlock further economic benefits in the West. FERC specifically hopes to avoid loop flows and inconsistent curtailment practices.

FERC notes that CAISO and SPP are uniquely positioned to address evolving seams issues across various stakeholder communities. FERC recognizes that CAISO and SPP have both already taken initiative through stakeholder processes to resolve seams coordination issues, but that further efforts are necessary to improve the markets’ performance in providing economic and reliability benefits.

FERC thus directs CAISO and SPP to submit a joint report by September 30, 2026, which discusses the following:

1) CAISO and SPP’s efforts on seams and market coordination, and who each has worked with to address such topics;
2) Identification of seams and market coordination issues created by evolving wholesale markets including, but not limited to, various markets differences on transmission commitment and scheduling, congestion management, and managing loop flow issues across markets;
3) A plan for addressing each identified issue, including the relative prioritization & planned timing for implementing solutions; and
4) A list of issues in which the various market operators do not have a uniform path for resolving such issues.

Public comments are due within 30 days of CAISO & SPP submitting their joint report. FERC’s order, issued in Docket No. AD26-10-000, is available here.