The Northwest’s $700MM Dilemma: How Oregon and Washington Are Fighting the Bonneville Power Administration—and Each Other—for Control of Their Energy Future

New legislation promises billions in savings and cleaner power across the West—if regional tensions can be resolved

When California Governor Gavin Newsom signed Assembly Bill 825 in September 2025, the landmark legislation did more than just advance the Golden State’s clean energy ambitions. It set in motion a fundamental restructuring of how electricity flows across the American West, with profound implications for businesses and consumers from San Diego to Seattle.

The law authorizes the California Independent System Operator (CAISO) to transition governance of its electricity markets to an independent regional organization—a move designed to address years of Western states’ concerns about California wielding too much control over a potential multi-state power grid.

The stakes are enormous. Multiple studies project the expanded Western market could generate more than $1 billion in annual savings for the region, according to supporters of the legislation. For California alone, the Bay Area Council estimates annual savings of $309 million, while reducing carbon emissions by nearly 3 million tons per year.

The Northwest’s Dilemma

But the real test of AB 825’s impact may play out not in California, but in the Pacific Northwest, where the region’s largest power broker has been reluctant to join California’s market expansion.

The Bonneville Power Administration, a federal agency that controls approximately 70 percent of the electricity transmission grid in the Pacific Northwest and markets power from 31 federal hydroelectric dams, made waves in May 2025 when it announced plans to join Markets+, a smaller energy market organized by the Southwest Power Pool, rather than CAISO’s Extended Day-Ahead Market (EDAM).

The decision drew immediate criticism. According to a July 2025 analysis by Earthjustice, BPA’s own cost studies showed that joining Markets+ would be more expensive for consumers compared to either joining EDAM or maintaining the status quo. An analysis by Washington and Oregon state agencies using BPA’s data found the Markets+ choice would mean foregoing significant cost savings for the region.

BPA officials defended their decision in a March 2025 recommendation, stating they were “concerned that the vast majority of the benefits realized from creating a Westwide market would flow to California,” according to the Oregon Capital Chronicle.

AB 825 was designed precisely to address such concerns. The Northwest Energy Coalition noted in a September statement that the legislation “has addressed the primary concern cited by the Bonneville Power Administration when it chose Markets+ over EDAM in May: the CAISO market’s lack of independent governance.”

Big Utilities Are Already Betting on Integration

While BPA deliberates, major investor-owned utilities in Oregon and Washington have already committed to CAISO’s market. Portland General Electric, which serves 1.9 million Oregonians, signed an implementation agreement in June 2024 to join EDAM in fall 2026. PacifiCorp, serving customers across six Western states, including Oregon and Washington, is committed to participating starting in spring 2026.

Maria Pope, PGE’s president and CEO, stated in a March 2024 announcement that joining EDAM represents “a significant next step toward an integrated regional system that will deliver cost savings and enhanced reliability for PGE customers.”

The financial case is compelling. A 2021 study by the U.S. Department of Energy, led by Western state energy offices and detailed by the Northwest Energy Coalition, projected that Washington could accrue $551 million in annual benefits from a unified Western market, while Oregon would see $207 million per year. Combined across the four Northwest states of Washington, Oregon, Idaho, and Montana, annual benefits could range from $700 million to $885 million, depending on market configuration.

CAISO’s existing real-time market, the Western Energy Imbalance Market, has already demonstrated the concept’s viability. According to the California ISO’s second quarter 2025 report, the WEIM has delivered more than $7.4 billion in cumulative economic benefits since its 2014 launch, now covering 22 entities across 11 Western states and representing 80 percent of electricity demand in the Western Interconnection.

States Try to Take Matters Into Their Own Hands

The governance question masks deeper tensions about Western energy infrastructure. Oregon and Washington have set ambitious targets to transition to 100 percent renewable power within three decades, but both states face a critical bottleneck: inadequate transmission capacity to deliver new renewable energy to population centers.

Frustrated by BPA’s control over transmission infrastructure, both states introduced legislation in 2025 to create their own transmission authorities that could finance and build new transmission lines independently. According to the National Caucus of Environmental Legislators, Oregon’s House Bill 3628 and Washington’s Senate Bill 5466 and House Bill 1673 would establish state-level entities responsible for transmission planning and development.

Oregon’s bill proposed creating the Oregon Electric Transmission Authority as an independent public corporation, according to the Oregon Department of Energy’s 2025 Legislative Report. The authority would have been governed by a 12-member board and given the power to issue revenue bonds to finance transmission projects. However, Oregon’s transmission authority bill died in committee, according to the Oregon Department of Energy’s May 2025 legislative update, which noted that “while some elements of an electric transmission package did not move, including the formation of an Oregon transmission authority (HB 3628), other elements are still in play.”

Washington’s approach has gained more traction. Senate Bill 5466 passed the Washington Senate in March 2025 on a 29-20 vote, according to Capital Press. The bill would create the Washington Electric Transmission Office within the Department of Commerce, with the legislature potentially establishing it as an independent authority in the future. According to the bill text, the office would have the power to use eminent domain for land acquisition, issue bonds, and engage in transmission planning activities within and outside Washington state.

As of late April 2025, Washington’s SB 5466 remained active in the legislative process, having been returned to the Senate Rules Committee for third reading, according to the Washington State Legislature’s bill tracker.

The Bottleneck Problem

The push for state-level solutions reflects a stark reality: the Northwest’s transmission infrastructure is choking off renewable energy development. A May 2025 investigation by ProPublica and Oregon Public Broadcasting documented the scale of the problem. Of 469 large renewable projects that applied to connect to BPA’s grid since 2015, only one reached approval—”longer odds than in any other region of the country,” according to the investigation. The report found that BPA’s approach to financing new transmission infrastructure is more restrictive than any other major grid operator.

The transmission crunch has real consequences for businesses and consumers. Doug Johnson, a senior BPA spokesperson, told the Oregon Capital Chronicle in March 2025 that while joining Markets+ shows higher upfront costs, the agency projects lower costs over time compared to EDAM’s annual implementation expenses.

The Political Pressure Mounts

The regional disagreement has drawn attention at the highest levels. In May 2025, all four U.S. Senators from Oregon and Washington—Jeff Merkley, Ron Wyden, Patty Murray, and Maria Cantwell—sent a letter to BPA expressing concerns about the Markets+ decision. According to Senator Wyden’s office, the Senators wrote: “This decision will likely have profound and lasting impacts on the reliability, affordability, and greenhouse gas emissions of electricity used throughout the Pacific Northwest.”

The Senators emphasized that they were not favoring either market but urged BPA to “refrain from making any draft or final decisions until there is less uncertainty” and to prove that any decision provides the greatest benefit to the entire Northwest.

Letha Tawney, a commissioner on the Oregon Public Utility Commission, warned about the operational complications if BPA exits the Western market. She told the Oregon Capital Chronicle that without BPA integrated into California’s system, grid operators would lose the ability to quickly reroute energy across the region during emergencies like wildfire-related transmission failures or unexpected plant outages. Instead of one coordinated system, “a system operator in California would have to call operators in Little Rock to ask what each was seeing on their own maps,” creating “needless problems.”

What Comes Next

The passage of AB 825 in California with overwhelming bipartisan support—74-1 in the Assembly and 34-0 in the Senate—signals broad consensus on the need for regional energy cooperation. Elliot Mainzer, CAISO’s president and CEO, stated in a September announcement that the legislation represents “a landmark achievement for the future of energy collaboration and innovation across the Western United States.”

Meanwhile, Oregon and Washington’s attempts to create their own transmission authorities reflect growing impatience with the status quo. Oregon’s effort failed, but Washington’s legislation remains alive, potentially offering an alternative path to expanding transmission capacity if regional coordination continues to face obstacles.

For businesses across the three states, the ultimate outcome will depend on whether independent governance can bridge the political divide. EDAM received federal approval from the Federal Energy Regulatory Commission in December 2023 and June 2024, with operations scheduled to begin in 2026.

The question now is whether BPA will reassess its position in light of the governance changes—or whether the Northwest will chart a separate course, potentially fragmenting the Western grid just as climate pressures and growing electricity demand require greater coordination. The failure of Oregon’s transmission authority and the uncertain fate of Washington’s similar legislation underscore the complexity of solving transmission challenges through state-level action alone.

The California Chamber of Commerce, in supporting AB 825’s passage, noted that regional market participation “improves dispatch efficiency, reduces curtailment of renewable generation, and expands access to low-cost resources for California customers.” Those benefits, the Chamber argued, “matter for family budgets, for small manufacturers navigating thin margins, and for the competitiveness of energy-intensive employers that anchor local economies.”

With major utilities already signed up and billions in potential savings on the table, the Western energy market’s future hinges on whether independent governance can finally overcome regional mistrust and deliver on the promise of coordinated, cost-effective clean power across state lines.