Benefits for participants in CAISO’s Western Energy Imbalance Market surged past $119 million in the third quarter of 2020 — a record amount driven by savings during the heat waves of August and September, the ISO told the EIM’s Governing Body on Wednesday.
“We saw a higher level of benefits in this quarter than we normally have seen because of those conditions and the resultant high prices, especially in the Southwest,” CAISO COO Mark Rothleder said.
The benefits were mainly from savings; utilities paid less for electricity in EIM transfers than they would have otherwise paid during times of tight supply and soaring prices, the ISO reported.
Load-serving entities in the Southwest and California were pressed to meet high demand during the heat events in mid-August and over Labor Day weekend. CAISO ordered rolling blackouts for two days in August and barely avoided additional outages in September. (See CAISO Avoids Blackouts amid Brutal Heat, Fires.)
More than half the third-quarter benefits, $66 million, came in August.
Of the 11 active EIM participants, CAISO said it saved the most, reaping $23.7 million in benefits. Arizona Public Service was able to avoid $22.6 million in additional costs by procuring electricity through the EIM, and the Salt River Project, also in Arizona, saw $17.4 million in savings, CAISO reported.
“The quarterly benefits have grown over time as a result of the participation of new balancing authority areas in the market, which results in additional benefits for both the individual BAAs but also compounds the benefits to adjacent BAAs by enabling further transfers,” CAISO said in its third-quarter report.
The savings bring the EIM’s total benefits to $1.1 billion since it started operating in November 2014.
Current EIM entities also include NV Energy, PacifiCorp and Seattle City Light. Eleven more entities are scheduled to join in 2021 and 2022, including the Bonneville Power Administration, the Los Angeles Department of Power and Water, and Public Service Company of New Mexico.