By Jason Fordney
Peak Reliability and PJM officials on Tuesday promoted the independent and self-governing nature of their proposed Western energy market in an attempt to differentiate the effort from a competing initiative by CAISO.
“Our blank state for market governance really resonates with people, because they see they don’t have to inherit a governance structure from one entity or be burdened by a structure that is tied to a particular state,” Pete Hoelscher, Peak’s chief strategy officer, said during a Feb. 27 conference call.
Peak officials provided more details on the proposed market, along with feedback they have received from industry participants.
One major concern among participants interested in the market: getting the full and appropriate value for generation and transmission assets “because that is not happening in all cases today,” Hoelscher added.
In a parallel development, CAISO earlier this year announced a plan to bring day-ahead functions into its Western Energy Imbalance Market (EIM). (See CAISO Plan Extends Day-Ahead Market to EIM.) The California State Assembly this week also kicked off yet another legislative effort to regionalize CAISO, possibly setting up competition for who would create and operate a full Western RTO. (See Calif. Lawmakers Relaunch CAISO Regionalization.)
While Peak officials have previously said they aren’t setting out to create an RTO, the organization said Tuesday that its proposal is a pathway to developing one. Peak expects to publish a business plan on March 30 and hopes that by mid-April interested parties will enter into nonbinding agreements to assist in market governance and design. Binding agreements are targeted for June, and the goal is to have the market go live in June 2020.
Peak said that potential participants in the new market have expressed doubt that it can be operational by the scheduled target date of mid-2020 because of technical, operational and regulatory tasks, but Peak officials are stressing the operational experience of PJM, which operates a 13-state eastern energy market.
Other commenters to Peak noted that they have already invested in joining the EIM and are receiving financial benefits from the real-time balancing market. Some have told Peak that CAISO’s proposed day-ahead market across the EIM seems like the only foreseeable next step in developing a Western market. Others say the West needs more fuel diversity and participation, according to a Peak presentation.
Based on feedback, Peak’s services would not include a capacity market, consolidation of open access transmission tariffs, or regional/sub-regional system planning for reliability, operational performance, public policy, market efficiency or interconnection.
Peak and PJM Connext announced their joint effort to develop a market in January. Visualized for day one is reliability coordination services, real-time and day-ahead energy markets, financial transmission rights allocation, balancing authority services, market monitoring and a self-governance model. (See Peak, PJM Pitch ‘Marketplace for the West’.)