Five prominent environmental and ratepayer advocacy groups have filed a lawsuit against the Bonneville Power Administration (BPA) over its controversial decision to join the Southwest Power Pool’s (SPP) day-ahead energy market, alleging the move will escalate electricity costs, undermine grid reliability, and impede access to clean energy across the Pacific Northwest. The legal challenge, lodged Thursday in the 9th U.S. Circuit Court of Appeals, contends that BPA’s market choice violates both the Northwest Power Act and the National Environmental Policy Act (NEPA).

BPA, which operates the largest transmission grid in the Northwest and markets hydropower from 31 federal dams, announced in May its intent to integrate into SPP’s “Markets Plus” system, bypassing California’s larger and more liquid day-ahead market. This decision drew immediate criticism from Pacific Northwest governors, lawmakers, utility regulators, and renewable energy proponents, who had advocated for BPA to reconsider its initial March announcement. The plaintiffs in the suit include the Oregon Citizens’ Utility Board, the Sierra Club, the Montana Environmental Information Center, the Idaho Conservation League, and the NW Energy Coalition, all represented by Earthjustice.

The lawsuit asserts that BPA’s participation in the smaller SPP market, which possesses fewer electrical generation resources, will likely lead to rising prices and an increased risk of blackouts during peak demand periods. This is attributed to the inherent complexities of transmitting power across disparate market boundaries. Notably, Oregon’s two largest investor-owned utilities, Portland General Electric and Pacific Power, have already committed to California’s day-ahead market, further highlighting the potential for market splintering and diminished regional energy availability. Critics argue that this fragmentation could force regional electricity providers to construct additional generation facilities or increase reliance on existing fossil fuel plants, as clean energy resources are less prevalent in the Southwest market.

BPA, a component of the U.S. Department of Energy, supplies approximately one-third of the Northwest’s electricity, primarily to publicly owned rural utilities and electric cooperatives. It also owns and operates 15,000 miles, or 75%, of the region’s high-voltage transmission lines. The agency previously stated that the SPP market offered superior independence due to its specific market design and governance structure. However, the lawsuit claims BPA’s decision contravenes its duties under the Northwest Power Act, which mandates providing low-cost power while promoting renewable energy, conservation, and protecting fish and wildlife.

Furthermore, the plaintiffs allege that BPA failed to conduct a requisite environmental impact analysis on potential effects to fish and wildlife in the Columbia River Basin, where its federal hydroelectric dams operate. Charlotte Shuff, spokesperson for the Oregon Citizens’ Utility Board, emphasized the regional challenges: “Oregon is facing overlapping energy challenges: rising utility bills, rising electricity demand from data centers, and stalling progress on meeting clean energy requirements. The last thing we need is for one of our region’s largest clean energy suppliers to reduce ties with the Pacific Northwest.” The lawsuit seeks to vacate BPA’s decision, compel an environmental impact statement, and rescind financial commitments made to the Southwest energy market, underscoring the significant economic and environmental stakes for the region.