By Rich Heidorn Jr.
CAISO’s Western Energy Imbalance Market is expanding its footprint to Colorado. Xcel Energy, Black Hills Colorado Electric, Colorado Springs Utilities and Platte River Power Authority announced Tuesday they will join the EIM as soon as 2021.
Although the companies “have different business models, customers and geography,” they said in a press release, “all share a commitment to leading the clean energy transition and believe the WEIM will provide the most benefit to their collective Colorado customers.”
Three of the companies currently share resources and balance demand through a joint dispatch agreement, and the fourth, Colorado Springs Utilities, will join in March.
The news is further evidence of the momentum of the EIM and a disappointment for SPP, which had hoped to lure the utilities to its proposed Western Energy Imbalance Service (WEIS). The four utilities serve almost 2 million customers and reported $3.7 billion in sales in 2018.
The companies said that a Brattle Group study concluded that the EIM had more potential to lower production costs “due to the size of its market footprint and the diverse resources available.”
The companies said the EIM also offered lower administrative costs and noted its exploration of a day-ahead market, which they said will allow the integration of more renewables.
“We’re very excited with their announcement,” CAISO spokeswoman Vonette Fontaine said. “Utilities are recognizing the savings the EIM brings to its customers, along with their ability to integrate carbon-free resources.”
SPP spokesman Derek Wingfield said the announcement “confirms that wholesale electricity markets can benefit the Western Interconnection, and we’ll bring significant value to participants of our Western Energy Imbalance Service Market like we’ve done through our other markets for more than a decade already. We are on track to launch the WEIS in Feb. 2021, and a number of western utilities have already expressed interest in joining it. We’re confident the WEIS’s performance will prove its value in lowering the cost of wholesale electricity and enhancing reliability, and that our roster of market participants will continue to grow over the next several years.”
“This decision is an important next step in our efforts to keep our customers’ bills low and provide more 100% carbon-free energy like wind and solar,” said Alice Jackson, president of Xcel Energy Colorado, the state’s largest load-serving entity.
The companies said they will work to finalize their implementation agreement with the EIM over the next several months and have set a target of 2021 for joining the market.
The companies announced they were evaluating the EIM and WEIS in September, after the state enacted legislation requiring utilities to submit greenhouse gas-reduction plans and instructing state regulators to investigate the potential benefits of joining a regional energy market. (See Colorado Utilities Examine Market Membership.)
In April 2018, Xcel had pulled out of a plan for the Mountain West Transmission Group to join SPP, saying it wasn’t in its best interests. (See Xcel Leaving Mountain West; SPP Integration at Risk.)
Xcel’s Public Service Company of Colorado had almost 1.5 million customers and $2.7 billion in revenue in 2018, according to the Energy Information Administration.
Colorado Springs has more than 231,000 customers, with Black Hills serving almost 97,000.
Platte River Power Authority provides wholesale electric generation and transmission to the utilities of Estes Park, Fort Collins, Longmont and Loveland, which have more than 162,000 customers.
CAISO says the EIM has saved its nine current participants $801 million since it launched in 2014. Nine other entities will join the EIM next year, with the Los Angeles Department of Water and Power following in 2021.
Hudson Sangree contributed to this article.
