By Jason Fordney
Peak Reliability and PJM Connext have entered the “commitment phase” for their proposed Western energy market, refining their pitch to convince potential participants to finally embrace an organized market for the region.
The organizations on Friday issued a three-page abstract of their new business plan to potential members and has also set up a public comments page on a partnership for what could possibly lead to a Western RTO, an effort that has previously been stymied by difficulties in developing a governance process acceptable to all the states involved.
“It is envisaged that these services will expand over time, evolving towards a full RTO offering. Whether and when this occurs will be a matter for the market’s participants to determine,” the abstract says. The full business plan remains confidential and will require interested parties to enter nondisclosure agreements.
In response to the proposed market plan, CAISO has filed to depart Peak as its reliability coordinator (RC) and developed a rival plan to offer RC services across the West to Peak’s existing customers. (See CAISO to Depart Peak Reliability, Become RC.) The ISO is also exploring enhancing its day-ahead market and extending it across the Western Energy Imbalance Market (EIM). (See Multiple Entities, Markets Now Beckon in West.)
Peak said it continues to receive notices from utilities intending to withdraw from its reliability services but is not making public the number that have filed. The organization has noted that market participants are highly likely to receive RC services and market services from the same source.
“I can say we have not received notices from all of our funding parties,” Peak spokeswoman Rachel Sherrard told RTO Insider. “I would note that, with the exception of one entity, all notices received so far are revocable.” The non-revocable notice is from CAISO, which will leave Peak on Sept. 2, according to organization documents.
The Peak/PJM commitment phase will consist of confidential meetings with interested parties “to review more details on the plan’s assumptions, market size scenarios, expected transactional cost ranges, projected aggregate efficiency savings and proposed services within the business plan,” the organizations said.
They envision the market will initially roll out with a day-ahead and real-time market using LMP and forward transmission rights for hedging. A full RTO would then be developed at the behest of market participants. (See Peak Touts ‘Independent’ Western Market Plan.) Existing RC services would be offered as well as balancing authority services, transmission operation, real-time grid monitoring and control, and interregional congestion management. A NERC-certified RC is needed to comply with the reliability organization’s standards.
Peak has highlighted its knowledge of the Western grid as an RC, while PJM brings its experience in market design and operation. (See PJM Chief Confident on Western Market Proposal.) The real-time market would include spot energy, synchronous and nonsynchronous reserves, and frequency regulation. The day-ahead offering would include a virtual energy market, while the FTR offering would allow a forward hedge price differential between nodal and aggregate locational pairs.
Peak says its funding level will remain flat through 2019. It has scheduled an April 11 conference call on its market initiative.
CAISO says it will “shadow” Peak RC services and then launch its own RC offering by spring of 2019.