By Robert Mullin
An effort to create an organized electricity market is taking shape in the inland West even as CAISO continues to build the case for expanding its operations into the wider region.
The Mountain West Transmission Group — a partnership consisting of seven different transmission owning entities within the Western Interconnection, including the Western Area Power Administration’s Loveland Area Projects and Colorado River Storage Project — is exploring the benefits of implementing a common transmission tariff across multiple states and developing an organized market.
Mountain West issued a request for information in May to CAISO, MISO, PJM and SPP regarding tariff administration and market operator services — “one of multiple sources of information to assist the group in consideration of [a] path forward,” the group said. Proposals were due back to the group July 15.
The group’s footprint covers most of Colorado and Wyoming, along with smaller areas of Arizona, Montana, New Mexico and Utah.
WAPA operates 17,000 miles of transmission spanning 15 states, nearly 5,000 miles of which is located inside Mountain West.
Other members of the group include Basin Electric Power Cooperative, Black Hills, Colorado Springs Utilities, Platte River Power Authority, Xcel Energy’s Public Service Company of Colorado, and Tri-State Generation and Transmission, which together control about 11,000 miles of transmission.
WAPA’s expansive network — as well as its status as a federal power marketing agency (PMA) — makes Mountain West an appealing alternative for some industry participants wary of joining a market operated by CAISO and potentially dominated by California interests. (See related story, Study Touts Benefits of CAISO Expansion.)
Among the skeptics is Utah Associated Municipal Power Systems (UAMPS), which provides energy on a nonprofit basis to community-owned utilities in eight Western states.
CAISO “is not the only game in town,” UAMPS CEO Doug Hunter told Utah lawmakers during a July 13 hearing to discuss the legislature’s role in PacifiCorp’s proposed ISO membership.
Hunter encouraged legislators to look at WAPA’s footprint.
“It runs right through us,” he said. “It would be much better if the entire West had access to it.”
WAPA has said that joint tariffs and energy imbalance markets are among the topics “driving the energy future.”
The agency “recognizes the impact this has on our business and as an organization continues to pursue and develop collaborative paths forward to best benefit our customers,” it said. The agency provides power at relatively low cost to publicly owned utilities referred to as “preference” customers.
WAPA has said that it “is uniquely positioned to facilitate collaborative discussions with industry experts and customers about engagement and involvement in industry activities, such as regional transmission organizations and other market initiatives.” The agency has said its interest stems from its “significant transmission system,” the “expanding geographic scope of markets” and “increasingly limited trading partners.”
A centrally operated Mountain West market could boost trading activity in the region by eliminating the “pancaking” of transmission charges and facilitating a transition from contract path to flow-based transmission rights, which more closely matches scheduled transactions with actual power flows.
Mountain West says its members have achieved “significant success” with rate design and cost-shift mitigation, issues that have stymied previous efforts at developing a common tariff. The group has engaged The Brattle Group to perform a scoping study examining the potential benefits of a day-ahead electricity market.
Although the outcome of the effort is still unclear, the Mountain West entities plan to make a decision on a direction forward in the third quarter of 2017, after a stakeholder process. A common tariff — or broader organized market — could be implemented as early as 2018.
