Electricity Markets

Public power utilities, IOUs study joining western energy market

Public power utilities Colorado Springs Utilities and Platte River Power Authority on Aug. 30 were joined by investor-owned utilities Xcel Energy and Black Hills Energy in announcing that they are evaluating the opportunity to join an energy imbalance market (EIM).

They have launched an in-depth study to determine the best course of action.

Xcel Energy, Black Hills Energy, Colorado Springs Utilities and Platte River Power Authority have secured an independent consultant, which is evaluating the benefits and costs associated with the utilities’ participation in one of two markets -- the Western Energy Imbalance Service (WEIS) proposed earlier this year by the Southwest Power Pool, or the existing Western EIM, operated by the California Independent System Operator (CAISO). 

The study will help the four utilities evaluate which option would provide the most benefit to customers.

Currently, the four energy companies share resources and balance demand for electricity during peak periods through a joint dispatch agreement.

Xcel Energy, Black Hills Energy, Colorado Springs Utilities and Platte River Power Authority see value in joining a larger market to expand opportunities to exchange energy with neighboring utilities and be able to reliably integrate more clean energy into their systems. 

They noted that the exploration is in keeping with the passage of legislation directing the Colorado Public Utilities Commission to investigate the potential costs and benefits energy markets may provide to energy generators and customers. 

The results of the study, which is being conducted by the Brattle Group, are expected by the end of September with a decision expected by the end of the year.  

EIM launched in 2014

CAISO launched the EIM in 2014 and 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. CAISO on April 4 announced that Sacramento Municipal Utility District, part of the Balancing Authority of Northern California, successfully began full participation in the Western EIM.

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 California’s Turlock Irrigation District in 2021; Washington State-based Avista, Tacoma Power and Tucson Electric Power in 2022.

The Modesto Irrigation District Board of Directors on August 27 unanimously voted to proceed with implementation, administration and participation within the EIM.

MID will participate in the EIM through the Balancing Authority of Northern California, of which MID is a member.

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 EIM, as well as what it said are important related policy proposals. The letter to the region also proposed BPA sign an EIM Implementation Agreement with CAISO.

SPP proposal

Meanwhile, the Southwest Power Pool 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 to ensure funding of implementation costs.

SPP will file a tariff with the Federal Energy Regulatory Commission defining the rates, terms, and conditions for the EIS, and intends to work with the initial EIS customers to finalize the tariff in advance of the filing.

SPP will administer the EIS as a contract service separate and distinct from its role as an RTO. To participate, entities will execute a pro-forma Western Joint Dispatch Agreement that establishes a legal relationship between SPP and the customer taking EIS market administration services.

The SPP EIS will be a real-time balancing market operated on a continuous five-minute basis and cleared through Security Constrained Economic Dispatch that will calculate locational marginal prices and quantities at each location.

Xcel scrapped plans to join Mountain West Transmission Group in 2018

In 2018, Xcel Energy ended its participation in the Mountain West Transmission Group (MWTG) and in related efforts to join SPP.

In making the announcement, the company cited a number of issues for its decision, including what it said were limited benefits for the company’s 1.4 million customers in Colorado, who are served by the Public Service Company of Colorado, lack of market expansion opportunities for MWTG and increasing uncertainty over the costs of RTO participation.