CAISO has released a set of guiding principles for upcoming discussions about seams between the ISO, SPP and other entities as the Extended Day-Ahead Market nears its opening in May.
In November, FERC staff urged Western electricity industry stakeholders to get ahead of seams issues before EDAM and Markets+ begin. (See FERC Report Urges West to Address Looming Market Seams Issues.)
CAISO’s eight principles focus on how to ensure the continued strength of the Western Energy Imbalance Market, which has provided significant reliability and financial benefits to its participants and their customers, CEO Elliot Mainzer said in a blog post Feb. 23.
“We hope all WEIM participants will carefully consider the unprecedented and fortuitous combination of physics, economics and fully independent governance of WEIM and EDAM before leaving the seamless real-time market we have worked so hard to build together,” Mainzer said.
WEIM currently includes 22 balancing authorities from 11 states that account for 80% of electricity demand in the Western Interconnection. The market has proven that balancing areas can function seamlessly in a real-time market, providing reliability benefits and economic value to participants and customers across the West, CAISO’s document says.
“Breaking up the WEIM footprint risks unwinding these benefits,” CAISO says. “Market-to-market seams arrangements are a poor substitute for seamless real-time operation of the grid and can only limit the loss of efficiency and reliability that results from fragmented footprints.”
One principle is that the seams issue is not a venue for market design advocacy.
“Market-to-market seams discussions are not a forum to relitigate transmission service [and] transmission rights, or a vehicle to redesign market rules,” CAISO says. “Seams discussions are predicated on sufficiently defined market protocol[s], transmission tariffs and market boundaries.”
Another principle is ensuring seams protocols minimize the risk of gaming or manipulation. Instead, protocols should support market power monitoring at interfaces to maintain competition.
CAISO’s EDAM will open in May, and SPP’s Markets+ is scheduled to begin in 2027. These markets could cause issues at their borders because of their different policies and dispatch processes. (See CAISO, SPP Explore Using Existing Tools to Manage DAM Seams.) The grid operators had made “significant progress” on adapting existing tools to tackle seams between their respective day-ahead markets, a CAISO representative said in December.
Seams negotiations are not solely between CAISO and SPP, Mainzer said. Instead, these discussions include balancing authorities, transmission providers, transmission operators, reliability coordinators, market operators and others when scoping procedures, agreements, discussions and solutions.
