California Energy Commission staff presented a study on the size of CAISO’s Extended Day-Ahead Market (EDAM), finding more benefits as the market’s footprint increases.

The study, completed by The Brattle Group, is an update to one originally published in January, intended to provide a better picture of the benefits of day-ahead markets in California and the West. The original did not include the Western Energy Imbalance Market (WEIM), which is used as the “Status Quo” scenario in the new version.

Including this scenario helps “show the full impact of a West-Wide EDAM footprint, including how it might affect today’s WEIM as participants leave to join SPP Markets+,” staff said in a fact sheet on the subject. The updated study also includes an analysis of lower natural gas prices in EDAM and an analysis of the change in market revenues for California solar resources from EDAM expansion.

The new study comes as utilities decide whether to join EDAM, which will open in 2026 with its first members, PacifiCorp and Portland General Electric. More participants plan to join in 2027 and future years.

“Generally speaking, day-ahead markets are advantageous because they can deliver cost savings to customers through efficiency gains,” Kai Van Horn, senior consultant with Brattle, said at a CEC public workshop June 5. “They can deliver environmental benefits through lower emissions, generally through better utilization of renewables.”

Brattle’s study looked at four market scenarios alongside the status quo:

• • “Baseline,” which includes the entities EDAM is expected to launch with in 2026;
  • “Baseline+,” which also includes likely market participants;
  • “Expanded EDAM,” which includes the maximum number of entities that could participate; and
  • “Split Market,” which shows entities operating under both EDAM and Markets+.

The Expanded EDAM scenario estimates more than $1 billion per year in economic benefits to California compared to the status quo. A larger EDAM also could increase investments in renewables in the area, thereby accelerating emission reductions in WECC, the study says. Greenhouse gas emissions, for example, would decline 58% in California and 39% in the West, respectively, compared to 2024. Revenues for solar increase by about $14/MWh in California in the expanded scenario compared to the status quo.

Annual curtailment would drop from about 26,000 GWh yearly in the status quo to about 8,000 GWh in the Expanded EDAM scenario. Lower curtailments may allow fewer resources to be built to meet renewables targets in the state, the study says.

Even with the initial formation of EDAM, curtailment in California will decrease significantly: a 64% reduction in solar curtailments and 61% reduction in wind, the study found.

In the Split Market scenario, costs and emissions also decrease. For example, emissions drop by 24 MMT/year. In the Expanded EDAM scenario, GHGs drop 25 MMT/year. Similarly for curtailment, the Split Market case shows about 10,000 GWh yearly, compared to 8,000 GWh in the Expanded scenario.

For large solar plants, the market value in California increases from about $-3/MWh in the status quo to $11/MWh in the Expanded EDAM, “largely due to the ability to export otherwise unused solar in midday hours when solar is abundant,” according to the fact sheet. The increased market revenues for solar transfer to customers through lower power purchase agreement costs, the study says.

CAISO is working on key initiatives related to EDAM as the day-ahead market nears operation. In June the ISO plans to decide on a key initiative in EDAM: how congestion revenues are allocated.