The Western Energy Markets (WEM) Governing Body, in its first vote under the California Independent System Operator's new, more independent governance structure, has approved the continued use of an important reliability feature known as the Western Energy Imbalance Market (WEIM) Assistance Energy Transfers, or AET, CAISO said on July 23.
It enables WEIM balancing areas to access energy transfers when they lack sufficient capacity to meet demand, the grid operator said.
This feature was implemented in 2023 and enables balancing authorities to receive energy transfers through the WEIM when market rules would otherwise restrict such transactions.
The AET, which included a sunset provision scheduled to take effect December 31, 2025, has been used effectively by WEIM balancing authorities.
The WEIM is a real-time wholesale energy trading market that enables participants throughout the West to buy and sell energy when needed.
The Western Energy Markets Governing Body, designed by regional stakeholders, has primary decision-making authority regarding rules specific to participation in the WEIM and Extended Day-Ahead Market.
With the recent action by the WEM Governing Body, the sunset provision would be removed, pending approval by the Federal Energy Regulatory Commission.
“The AET mechanism has proven its usefulness to WEIM entities under stressed grid conditions, and we are pleased to see the feature extended,” said Dede Subakti, the ISO’s vice president for System Operations. “We look forward to our continued partnership in supporting reliability for our WEIM participants.”
The Governing Body also approved a change regarding a surcharge applied to WEIM entities short on supply.
Under the new rule, the surcharge will not be applied if the energy transfers are made in coordination with a reliability coordinator to help maintain reliability of the grid. This change and removing the sunset provision were broadly supported by WEIM participants during a focused stakeholder process this past spring.
“AET provides peace of mind for the Balancing Authority when resources are tight and an interruption of market imports would create additional complexities in meeting real-time demand,” said Kathy Anderson, Senior Manager of Transmission and Markets for Idaho Power.
“Including AET as a permanent feature will continue to provide these benefits for utilities and ultimately, for our customers. Idaho Power looks forward to working with CAISO and stakeholders on additional enhancements to ensure appropriate pricing and to improve the AET feature in a future stakeholder initiative.”
The July 22 Governing Body meeting was also noteworthy for being the first held under the new governance structure established this month under Step 1 of the West-wide Governance Pathways Initiative. Developed with a broad range of Western stakeholder support, the Pathways proposal is intended to help advance independent governance of ISO electricity markets.
The Step 1 governance change was triggered when the Public Service Company of New Mexico signed its implementation agreement to join the ISO’s Extended Day-Ahead Market in 2027.
Step 1 provided the WEM Governing Body primary decision-making authority over ISO markets, with those matters coming to the California ISO Board of Governors on a consent agenda, where the AET proposal was approved Wednesday. Previously, the two bodies equally shared authority for approving such changes to market rules.
Step 2 of the Pathways Initiative would go further to develop a new independent regional organization that could oversee and approve proposals to change the tariff rules for the Western markets.
Senate Bill 540, now under consideration in the California Legislature, would enable the ISO to make the change necessary to support transition to an independently governed Western market if certain conditions to safeguard California’s interests are met.
The bill will allow the ISO to administer the electricity markets overseen by the new entity and enable California utilities to participate in it.
Both of the approved assistance energy transfers proposals must be filed with FERC and would take effect immediately if the tariff changes are approved, CAISO noted.
