By Jason Fordney
The Los Angeles Department of Water and Power (LADWP) on Thursday agreed to join the Western Energy Imbalance Market (EIM), adding the country’s largest municipal utility to the growing electricity market.
LADWP is the 11th utility to announce plans to participate in the CAISO-run market, which is designed to better balance supply and demand across the region by making more electricity resources available in real time.
LADWP General Manager David Wright touted the benefits of joining with other utilities across the western U.S. to more reliably integrate renewable energy resources.
“We are pleased to enter the EIM in what will be a solid step forward in partnering with our neighbors to find benefits for the City of Los Angeles,” Wright said in a statement.
While LADWP expects to begin participating in the market in April 2019, that timeline could be extended an additional year to accommodate the utility’s unique configuration and required upgrades. A separate agreement will have to be made once the LADWP system is integrated into the EIM.
Total implementation costs are estimated at $15 million to $20 million, and recurring expenses are projected at about $2.3 million per year. Third-party analysis pegged annual savings for ratepayers at $2 million to $5 million.
About 40% of LADWP’s 7,600 MW of capacity is coal-fired, 20% renewable, 22% natural gas-fired, 9% nuclear and 7% classified as “other.” The municipal utility began distributing electricity in 1917 and serves about 4 million customers.
The utility also individually or jointly controls about 4,600 miles of transmission, which includes the Pacific DC Intertie connecting Southern California with the Bonneville Power Administration system in the Northwest and the Intermountain DC system that carries output from coal-fired generation in Utah.
Already participating in the EIM are PacifiCorp, NV Energy, Puget Sound Energy and Arizona Public Service. Portland General Electric is due to join in October; Idaho Power in April 2018; Seattle City Light and Balancing Authority of Northern California/Sacramento Municipal Utility District in April 2019; and Salt River Project in April 2020.
Vancouver-based Powerex earlier this week became the first non-U.S. entity to announce its intention to join the market starting next spring. (See Powerex Slated to Become First Non-US EIM Member.)
The EIM began operating in November 2014 and now includes participants in Arizona, California, Idaho, Nevada, Oregon, Utah, Washington and Wyoming. CAISO estimates the market has so far produced approximately $173 million in gross benefits for its members.