Southwest Power Pool (SPP) on June 17 provided details on SPP’s proposal for a Western Energy Imbalance Service (EIS) market that it intends to launch at the end of 2020.
In early April, SPP called on interested utilities and other customers to join in the design and implementation of an energy imbalance market in the West.
Details on SPP plan
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. 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 (LMPs) and quantities at each location.
Settlements will be based on the market participants’ energy imbalance for each five-minute market interval, which is the difference between the load obligation and resource supply. If the obligation is larger than the supply, the market participant will pay the LMP for the imbalance at the settlement location. If the supply is larger than the obligation, the network resource above the obligation would be paid its dispatched output multiplied by the LMP.
All loads and resources in each participating balancing authority, excluding behind-the-meter generation below 10 megawatts, must be registered in the WEIS. Participating balancing authorities can opt for some embedded load or generation not to participate. Market participants will submit energy schedules reflecting all bilateral and self-dispatched activities.
Beginning seven days prior to each operating day, market participants may submit offers for each registered resource. Submitted resource offers roll forward hour-to-hour if a participant has not submitted a resource offer for a particular hour. Market participants may submit separate resource-offer parameters for each hour of the operating day. Offers include offer curves, economic and regulation minimum and maximum operating limits, and ramp rates.
Owners of jointly-owned resources have the option to model and dispatch their share of the resource independently of other shares.
External resources participating in the EIS must “pseudo-tie” into a participating balancing authority in accordance with any agreements and requirements of that balancing authority.
The operator of the balancing authority will ultimately remain responsible to balance load and resources in their area.
SPP will perform a supply adequacy analysis for the balancing authority to ensure they have enough generation in their operating plan to satisfy their load and obligations, based on the balancing authority’s own load forecast. This analysis will occur one day ahead of each operating day and then one hour ahead within each operating day.
Transmission and governance
The SPP EIS will use regional Joint Dispatch Transmission Service, which is intra-hour, non-firm transmission service that makes use of unscheduled transmission capacity to redispatch participating generators. Joint Dispatch Transmission Service will be the lowest priority transmission service and will not use available transfer capability or displace other forms of firm or non-firm transmission service. There will be no additional charge assessed to load for Joint Dispatch Transmission Service.
With respect to governance, SPP will establish a Western Markets Executive Committee with representatives of each non-affiliated signatory to the Western Joint Dispatch Agreement.
The committee will initially provide a forum for finalizing EIS market rules. After the market goes live, the committee will have authority to approve or reject proposed amendments to the tariff; establish detailed EIS Market Protocols; provide consultation to SPP in determining the administrative rate charged to participants; and recommend proposed amendments to the Western Joint Dispatch Agreement.
The committee may establish working groups and task forces as needed.
SPP’s independent board of directors will provide ultimate oversight of the administration of the EIS. Action taken by the Western Markets Executive Committee under the authorities defined in its charter will be deemed to be approved by the board, and SPP will be authorized to submit regulatory filings to implement the Western Markets Executive Committee’s decisions. Any action or inaction taken by the Western Markets Executive Committee may be appealed to the SPP board of directors for final resolution.
SPP’s independent Market Monitoring Unit will perform monitoring oversight for the EIS.
Future enhancements
SPP lists the following potential future enhancements to the EIS:
- Dispatchable dynamic schedules that would allow external parties with necessary transmission service to either import into or export from the EIS market;
- A ramping capability product;
- Trading hubs that would serve as settlement locations to help facilitate bilateral trading;
- Energy storage participation enhancements; and
- Appropriately valuing and incenting market participation by quick-start resources.
An overview of the SPP Western EIS proposed scope and design is available here.
SPP unveiled plan for reliability coordination services in June 2018
In June 2018, SPP said that it planned to offer reliability coordination services in the western U.S., specifically the Western Interconnection, starting in late 2019.
In September 2018, SPP said that several public power utilities in the West agreed to receive reliability RC services from the grid operator. Colorado-based Platte River Power Authority, Colorado Springs Utilities and the City of Farmington, New Mexico, a public power community, committed to receive RC services from SPP. SPP also noted it will provide RC services to several Western Area Power Administration regions.
SPP also said last year that several investor-owned utilities and cooperatives made similar commitments to receive SPP RC services.
SPP, a regional transmission organization, manages the electric grid and wholesale energy market for the central United States.
SPP and its group of member companies coordinate the flow of electricity across 66,000 miles of high-voltage transmission lines spanning 14 states.
CAISO EIM
The California Independent System Operator in 2014 launched a western Energy Imbalance Market.
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.
