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FERC Accepts CAISO Tariff Changes for Western Day-Ahead Electricity Market

The Federal Energy Regulatory Commission in December accepted changes to the California Independent System Operator’s tariff that will enable it to launch a Western day-ahead electricity market.

The acceptance of Western day-ahead market rules by FERC was paired with approval of another significant set of ISO tariff changes that will provide important day-ahead market enhancements.

Collectively, these new rules are known as the Day-Ahead Market Enhancements (DAME) and the Extended Day-Ahead Market (EDAM).

Stakeholders were deeply engaged in designing the market rules through a collaborative working group process, which included regional utilities, independent energy providers, state regulators, public interest organizations, and a variety of entities representing various interests and points of view throughout the Western Interconnection, CAISO said.

In its order, the Commission accepted the majority of these market rules and rejected without prejudice one element of the EDAM proposal related to transmission revenue recovery for market participants.

“The ISO looks forward to working with stakeholders in early 2024 to refine transmission revenue recovery under EDAM based on the Commission’s guidance,” CAISO said.

Tariff provisions approved by FERC will expand access to a full complement of wholesale energy market services in the West. Participants will be able to trade in the day-ahead timeframe and realize lower costs to ratepayers from accessing the most efficient supply, CAISO said.

The expanded market will also increase reliability from greater situational awareness and allow participants to share surplus renewable energy across a broad Western footprint.

The market changes are scheduled to be fully operational in 2026, with key coordination and system improvements occurring over the next two years.

Two large energy providers, PacifiCorp, which serves customers in California, Oregon, Washington, Utah, Wyoming, and Idaho, and the Balancing Authority of Northern California, which includes the Sacramento Municipal Utility District, have already announced their intention to join the market.

The extended day-ahead market builds on and expands benefits accrued under the Western Energy Imbalance Market, the ISO said.

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