Heat waves and capacity shortfalls in August and September have slowed an effort by the Western Energy Imbalance Market (EIM) to expand from a real-time interstate trading forum to a day-ahead market, CAISO and EIM entities told the market’s Governing Body at its Wednesday meeting.
The events included CAISO-ordered rolling blackouts Aug. 14-15. (See CAISO Avoids Blackouts amid Brutal Heat, Fires.)
The extended day-ahead market (EDAM) initiative is moving forward with a straw proposal on topics including resource sufficiency and transmission use. Comments had been due Sept. 10, but CAISO extended the deadline by two months to Nov. 12 at the request of stakeholders, said Mark Rothleder, vice president of market policy and performance.
“I think that’s a fair and good approach because I think people should factor in and consider the learnings of the August and September events,” Rothleder said. The extension is “providing everyone, including the ISO, time to consider [those] events.”
The EDAM initiative, one of CAISO’s highest priorities, is divided into three “bundles” of topics that the ISO is addressing in succession through next year. The market is expected to go live in 2024. (See CAISO Proposal Sets Course for EIM Day-ahead.)
“It’s very timely that we’re talking about resource sufficiency,” Rothleder said of the initial set of topics. “I think there is a nexus between resource adequacy discussions, both in California and across the West, that I think do come together in an important way in the resource sufficiency discussion in bundle 1 of this topic.”
The EIM includes 11 members across the West, with 10 more set to join in the next two years. The newest members are Seattle City Light and Arizona’s Salt River Project. On July 3, the EIM surpassed $1 billion in benefits for its members since its launch in 2014.
Jim Shetler, general manager of the Balancing Authority of Northern California, an EIM participant, spoke on behalf of all EIM entities about tapping the brakes on EDAM.
“We know there’s a lot of evaluation going on about the heat wave events of August and September,” Shetler said. “As these issues are being discussed and evaluated, we’ve been hearing some comments made by some parties about ‘the utilities are relying on exports from others too much’ and whether there’s a need to become more independent and self-sufficient.”
CAISO was faulted by some for its reliance on out-of-state exports to meet its evening peak demand, an apparent cause of the shortfalls and outages this summer.
The EIM entities support a robust resource adequacy program and a strong resource sufficiency test that applies the same metrics to all participants, Shetler said.
“However, we equally recognize that collaboration across the West is absolutely necessary in order for the region to reliably and efficiently manage the changing resources with the ever increasing variable renewables and decreasing dispatchable resources,” Shetler said.
The EIM was a first step in greater regional collaboration, he said. The EDAM is the logical next step, and EIM entities support the day-ahead market moving forward.
“We do not want to lose the momentum that has been established,” but the heat waves and blackouts have shown potential resource deficiencies and economic issues that could impact the EIM and EDAM, Shetler said. Taking time to address the issues will ensure an EDAM design “that meets the needs of all the market participants,” he said.
Governing Body member Robert Kondziolka asked Shetler if EIM entities are looking into the shortfalls and could brief the Governing Body on their findings.
“We’re in the middle of looking at what each one of the EIM entities have experienced as a result of the August and Labor Day weekend heat waves,” Shetler said. “We’re trying to summarize [the findings]” and plan to update the ISO and EIM once the analyses are complete, he said.