The Southwest electric market encompasses the Arizona, New Mexico, southern Nevada (AZ/NM/SNV) and the Rocky Mountain Power Area (RMPA) sub-regions of the Western Electric Coordinating Council (WECC). Peak demand is approximately 42 GW in summer. There are approximately 50 GW of generation capacity, composed mostly of gas and coal units.

The Southwest relies on nuclear and coal generators for baseload electricity, with gas units generally used as peaking resources. The coal generators are generally located in close proximity to coal mines, resulting in low delivered fuel costs. Some generation is jointly owned among multiple nearby utilities, including the Palo Verde nuclear plant, a plant with three units totaling approximately 4,000 MW, which has owners in California and the Southwest.