By Robert Mullin

PORTLAND — PacifiCorp says future participants in the western Energy Imbalance Market (EIM) should benefit from early lessons the company learned in its efforts to integrate its real-time operations with CAISO.

The EIM got off to a rocky start in November 2014 as transmission constraints between California’s and PacifiCorp’s balancing areas produced price discrepancies that consistently required out-of-market mitigation measures. That issue was resolved by NV Energy’s entry into the market last December, which significantly improved transfer capacity among the regions.

During the first public meeting of the EIM Regional Issues Forum at Bonneville Power Administration offices Wednesday, PacifiCorp staff discussed the challenges and benefits of joining the EIM.

“The first thing I would say is PacifiCorp had the honor of doing this first,” said Sarah Edmonds, PacifiCorp Transmission vice president and general counsel. “Luckily, a lot of those bumps in the road have been addressed.”

A New Language

Edmonds said prospective EIM participants will first need to grasp a new lexicon. “The EIM and the ISO have a whole new set of acronyms that you have to know,” she said.

The second piece of advice: Look at your maps.

“The West is very special,” Edmonds said. “It has all kinds of special arrangements that are grandfathered in. Go talk to your neighboring balancing areas.”

Stuart Kelly, PacifiCorp vice president of major project delivery, said one of the biggest challenges concerned what data to exchange with CAISO, especially data that relate to market settlements.

“Not just the output [to CAISO], but the input back into your system,” he said. Kelly encouraged participants to meet with CAISO staff early in the integration process to learn how the ISO settles transactions.

“I think most operations are not set up to handle the rapidity [of the EIM] and the settlement process,” Edmonds added, noting that dispute rights over energy transactions have time limits. For that reason, an EIM participant must streamline its procedure for generating “shadow settlements” — the participant’s own payout estimates from a transaction — which can differ from those ultimately provided by the ISO.

The settlement process affects not only an EIM members such as PacifiCorp but also non-affiliated utilities within an EIM balancing area that must rely on PacifiCorp to facilitate their EIM transactions. Clay MacArthur, assistant vice president of power marketing and contracts for Deseret Power, said settlement delays have caused problems for his Utah-based electric co-op.

“When you go into nine months and longer [for some settlement data], some of the market signals you thought you would get, you don’t get on a timely basis,” MacArthur said. He added that settlement statements from PacifiCorp at times provide either too much or too little data, requiring the utility to “reverse engineer” the documents to determine what they mean.

“We recognize there are improvements to be made in our settlements,” Edmonds said.

Better Visibility, More Discipline

Joining the EIM also presents new challenges for physical operations.

Describing his company as “a little bit of a problem child” because it operates two balancing areas, PacifiCorp’s Kelly stressed that EIM participants must ensure their network models can be exported to CAISO to facilitate integrated operation.

“If you’ve got [variable energy resources] in your portfolio, you have to get a handle on your forecast,” he said. “The challenge will be predicting when you have some kind of ramp.” Kelly said CAISO’s forecasting model was better than what PacifiCorp had previously relied upon.

Kelly also described outage management under the EIM as “a whole new language” that his company had to get right in order to coordinate schedules with the ISO. He pointed out CAISO’s requirement that it be notified of any system upgrades three months in advance.

“What the EIM requires is a level of discipline in those areas that you have never experienced,” Edmonds said.

That discipline appears to be spilling into neighboring Northwest balancing areas, whose system operators must coordinate with EIM participants.

“I think the implementation issues are getting simpler,” said Russ Mantifel of BPA’s transmission and policy group. “Right now I think we’ve now proved a concept to use EIM to move megawatts that can be scaled up. I think there’s increased visibility and control.”

Edmonds called visibility into neighboring balancing areas “one of the iterative, evolving parts of the EIM.”

Bidirectional Learning

Lessons from the EIM have not been a one-way street, according to forum participants.

“On the other side of the equation, the ISO is learning its own form of Western multiculturalism,” Edmonds said, noting that CAISO must deal with the capabilities of other areas while maintaining its own balancing area. “There’s a bilateral need to understand each other and each other’s lexicons.”

“A lot of these matters are very complex,” said energy consultant Tony Braun, an EIM Transitional Committee member. “You can’t know how complex until you’re in them.”

Despite the complexity, Kelly said PacifiCorp recovered its integration costs within the first year of operation because of the increased efficiency of the market.

“After seeing the benefits, I would encourage others to join,” he said. He also pointed to what he called NV Energy’s “seamless” integration into the market late last year. (See NV Energy has Smooth EIM Integration, CAISO Says.)

“We could not have gotten there as easily as we did — and it was not easy — if not for PacifiCorp having problem-solved a year before,” NV Energy attorney Lauren Rosenblatt said.