Electricity Markets

BPA makes case for Western EIM, proposes signing CAISO agreement

The Bonneville Power Administration on June 20 issued a letter to the region in which BPA describes the business case and legal authority for joining the Western Energy Imbalance Market (EIM), as well as what it said are important related policy proposals.

The letter to the region also proposes BPA sign an EIM Implementation Agreement with the California Independent System Operator, the market operator for the Western EIM.

BPA noted that an EIM is a voluntary market in which participating entities can choose whether or not to bid in resources for the purpose of dispatching power to balance supply and demand across a broad geographic region every five minutes.

In the case of the Western EIM, that region would likely include much of the West Coast and portions of Canada, Idaho, Montana, Wyoming, Nevada, Utah, Arizona and New Mexico by the time that BPA would potentially participate, it said.

BPA explained that its participation would give its power and transmission customers the opportunity to participate in the EIM with their own generation, as well as marketers of independent power plants located in the Bonneville balancing authority area.

“Selling surplus energy in western markets is essential to keeping BPA’s rates low and the exploration of joining the EIM is part of the BPA 2018-2023 Strategic Plan as a means to further strengthen financial health and maintain a competitive edge in the electric utility landscape,” BPA said in a news release.

“The new tools and capabilities that come with participation in an energy imbalance market will help BPA and the region to more fully realize the value of the flexible, carbon-free power of the Federal Columbia River Power System across an expanding footprint,” said Steve Kerns, the grid modernization director for BPA’s Business Transformation Office.

“The technology and business processes behind the EIM are also foundational to participate in new energy and capacity markets like the Day-Ahead Market Enhancements currently being explored by CAISO and its stakeholders, including BPA,” Kerns said.

The signing of an implementation agreement would obligate BPA to spend funds specific to EIM participation and includes the development of a detailed project plan to ensure the necessary systems, processes and training are in place prior to market participation.

“This work by BPA will give regional customers greater access to emerging markets and may reduce long-term transmission costs by decreasing or delaying the need for transmission system expansion,” the news release said.

BPA said that other benefits to EIM participation are enhanced awareness tools that capture the state of the electric grid as well as improved modeling and coordination across BPA’s power and transmission services.

An independent, third-party analysis of BPA’s potential participation in the Western EIM forecasts a $29-$34 million annual net dispatch benefit for Federal Columbia River Power System participating resources.

The release of the letter to the region kicks off a public comment period that will help to inform a record of decision, anticipated in September 2019, on whether to sign the EIM Implementation Agreement. The public comment period closes on July 22.

While the Implementation Agreement is a significant step toward becoming a member of the Western EIM, there are several subsequent decisions that will need to be made before BPA potentially participates in the EIM, BPA noted. BPA states that these incremental decisions would culminate in a possible go-live date of March 2022.  The full decision process is outlined in the letter.

Additional information about BPA’s consideration of joining the EIM is available here.

CAISO launched Western EIM in 2014

CAISO in 2014 launched its Western EIM. The market’s first participant was Oregon-based PacifiCorp. Las Vegas-based NV Energy followed on Dec. 1, 2015, Puget Sound Energy of Bellevue, Washington, and Arizona Public Service of Phoenix, Arizona, on Oct. 1, 2016, Portland General Electric on Nov. 1, 2017, and Idaho Power and Powerex of Vancouver, British Columbia on Apr. 4, 2018. EIM is now serving consumers in eight western states.

Other entities scheduled to begin participation include Seattle City Light, and Arizona’s Salt River Project in 2020; Los Angeles Department of Water and Power Albuquerque, N.M.-based Public Service Company of New Mexico, Northwestern Energy of Butte, Montana, and Turlock Irrigation District in 2021; Avista, located in Spokane, Washington, and Tucson Electric Power in 2022.

CAISO in April announced that Sacramento Municipal Utility District, part of the Balancing Authority of Northern California, successfully began full participation in the Western Energy Imbalance Market.

SPP unveils details on Western Energy Imbalance Service market

Southwest Power Pool (SPP) on June 17 provided details on SPP’s proposal for a Western EIS market that it intends to launch at the end of 2020.

SPP expects a go-live date of December 1, 2020 assuming it receives signed agreements from a sufficient number of customers by Aug. 1, 2019 to ensure funding of implementation costs.