The Public Service Company of New Mexico has formally committed to join the California ISO’s Extended Day-Ahead Market (EDAM), CAISO said on July 2.
As the largest electric utility in New Mexico, PNM, a wholly owned subsidiary of TXNM Energy, serves more than 550,000 homes and businesses across the state.
It joins PacifiCorp, Portland General Electric, the Balancing Authority of Northern California, the Los Angeles Department of Water and Power, the Turlock Irrigation District, and the Imperial Irrigation District with signed implementation agreements to participate in EDAM.
PNM announced its intention to join EDAM last November. It noted at the time that its customers would see an estimated $20 million in annual benefits through the day-ahead market and had realized nearly $125 million in benefits since PNM joined the Western Energy Imbalance Market (WEIM) in 2021.
The last WEIM Quarterly Benefits Report published in April showed that amount had grown to about $170 million.
Governance Change
Now that PNM has formalized its EDAM commitment with a signed agreement, it triggers an important step in how the Western Energy Markets are governed. While PNM will join EDAM in 2027, the governance change is effective immediately.
Originating from the West-wide Governance Pathways Initiative’s Step 1 proposal and jointly approved by the Western Energy Markets (WEM) Governing Body and the ISO Board of Governors in August 2024, the WEM Governing Body now has primary decision-making authority over ISO tariff provisions that apply to EDAM and the WEIM.
"PNM’s commitment ensures the market will have a geographically diverse group of non-ISO entities whose annual energy load is collectively greater than 70% of the load served by the ISO, meeting the requirements of the Pathways proposal," CAISO said.
Continued Governance Evolution
The Pathways Initiative was launched in 2023 by a diverse group of energy stakeholders from California and other Western states. The group included utilities, regulators, consumer advocates, public power, generators and power marketers, public interest organizations and others.
"While triggering this first structural change marks an important milestone in the continued evolution toward greater independent governance of the Western Energy Markets, proponents of a reliable and cost-effective grid are working toward realization of the Pathways Step 2 proposal. It would lead to the formation of a new regional organization with exclusive, independent responsibility for EDAM and WEIM," CAISO said.
If enabling legislation is approved in California, the state’s utilities and the ISO could participate in voluntary energy markets governed by an independent regional organization. The ISO would maintain its responsibilities as a balancing authority in California. It would also retain the authority, comparable to what exists for other balancing authorities in the West, to voluntarily withdraw from the regional markets if it chose to do so.
EDAM, which is scheduled to become operational in 2026, is designed to build on the success of the Western Energy Imbalance Market, a real-time market where energy is sold close in time to when it is used.
Since its launch in 2014, the market has resulted in just under $7 billion in cumulative benefits to participants and their customers. "The real-time market has also strengthened grid reliability by increasing collaboration between regional balancing authorities and making it easier to transfer energy around the market footprint where and when it is needed the most," the grid operator said.
Independent studies have shown that EDAM will result in additional reliability and affordability benefits for consumers. This is because many more energy transactions are planned and executed in advance in the day-ahead market, allowing for greater coordination and cost savings across the region.
