By Hudson Sangree
CAISO’s Western Energy Imbalance Market delivered more than $60 million in benefits to its participants in the fourth quarter of 2019, bringing the total benefits of the interstate real-time market to nearly $862 million since it began operating in November 2014, the ISO announced Thursday.
The biggest beneficiary among the EIM’s nine active participants was Arizona Public Service, which saved $17.4 million in in the last three months of 2019, followed by PacifiCorp and Portland General Electric, each of which saw approximately $11 million in benefits, CAISO said.
“When we launched the Western EIM, we knew it would be a win for consumers,” CAISO CEO Steve Berberich said in a statement. “These benefits prove that increased coordination creates operational savings and greater integration of variable resources to meet the evolving demands of consumers.”
November marked the EIM’s fifth anniversary. By 2022, it’s expected to serve 77% of load in the Western Interconnection with 11 more participants scheduled to join in the next three years. Arizona’s Salt River Project and Seattle City Light will enter the market this year.
The utilities scheduled to join in 2021 include the Los Angeles Department of Power and Water, Public Service Company of New Mexico and NorthWestern Energy. The Bonneville Power Administration and three other entities are expected to join in 2022.
In December, four Colorado utilities — Xcel Energy, Black Hills Colorado Electric, Colorado Springs Utilities and Platte River Power Authority — announced they will join the EIM as soon as 2021, filling in part of the last Western state that’s currently blank on the EIM map. (See EIM Lands Xcel, 3 Other Colo. Utilities.)
It also represented a major win over the EIM’s nascent competitor, SPP’s Western Energy Imbalance Service, which has sought to attract utilities unhappy with the idea of forming close ties with California and CAISO. The economic benefits of the EIM, however, have attracted participants even from more conservative states of the interior West.
In its latest quarterly report, CAISO said the financial benefits derive mainly from transfers across balancing areas, “providing access to lower-cost supply, while factoring in the cost of compliance with greenhouse gas emissions regulations when energy is transferred into the ISO.”
“EIM uses state-of-the-art technology to find and deliver low-cost energy to meet real-time demand across eight Western states and extends to the border with Canada,” it said. “The Western EIM has proven extensive financial and operational benefits since its inception in November 2014, and cumulative gross economic benefits now total $861.79 million.”
Trading now occurs only in the 15-minute and real-time markets, but through its stakeholder initiatives, the EIM is evaluating expanding to a day-ahead market and studying the potential for participants to benefit from wheel-through transfers, a proposal that’s proven controversial in the past. (See EIM Members Wary of Need for CAISO Wheeling Charge.)
“Currently, an EIM entity facilitating a wheel-through receives no direct financial benefit for facilitating the wheel; only the sink and source directly benefit,” the EIM said its Q4 report. “As part of the Western EIM Consolidated Initiatives stakeholder process, the ISO committed to monitoring the wheel-through volumes to assess whether, after the addition of new EIM entities, there is a potential future need to pursue a market solution to address the equitable sharing of wheeling benefits.”