CAISO’s Western Energy Imbalance Market surpassed $2 billion in total member benefits in the first quarter of 2022, hitting the new milestone 20 months after it reached $1 billion in benefits.
The WEIM has grown substantially since it began in 2014 with only CAISO and PacifiCorp as members. It now has 17 participants, including most of the West’s largest utilities.
CAISO attributed the rapid growth in benefits to the entry of new participants.
“This remarkable milestone is further evidence of the value of West-wide market coordination,” CAISO CEO Elliot Mainzer said in a news release. “We are very appreciative of the partnerships established through the WEIM and look forward to working together to bring even greater value to the people we serve.”
More than $172 million in economic benefits in the first quarter of 2022 pushed total benefits to $2.1 billion by February, the ISO said in results announced Thursday. It was the third best quarter on record for the EIM, falling only below the previous two quarters.
The WEIM saw unprecedented quarterly benefits of $301 million in the third quarter of 2021 — more than in all of 2019 and almost as much as in calendar year 2020.
Summer heat waves in California, the Desert Southwest and the Pacific Northwest triggered high demand amid tight supply, pushing electricity prices higher. Participants were able to access less-expensive supply through the WEIM.
As a result, the WEIM realized a record $739 million in benefits in 2022.
In the first quarter of 2022, “WEIM benefits accrued from having additional WEIM areas participating in the market and economical transfers displacing more expensive generation,” CAISO said in its Q1 benefits report.
The Los Angeles Department of Water and Power, Public Service Company of New Mexico, NorthWestern Energy and the Turlock Irrigation District joined the WEIM in 2021.
Washington’s Avista Utilities and Tacoma Power joined in April, and the federal Bonneville Power Administration is scheduled to go live in May. (See BPA ‘Full Speed Ahead’ on May WEIM Entry, but Issues Remain.)
CAISO was by far the biggest winner in Q1, realizing more than $63.5 billion in benefits. PacifiCorp came second with $26.4 billion in benefits, and the Balancing Authority of Northern California was third with $18.6 billion in benefits.
“The measured benefits of participation in the WEIM include cost savings, increased integration of renewable energy and improved operational efficiencies including the reduction of the need for real-time flexible reserves,” CAISO said in its Q1 report.
By 2023, the WEIM is expected to have 22 participants serving nearly 80% of the electricity demand in the Western U.S. Its footprint already includes portions of Arizona, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming and British Columbia.
In a major effort, CAISO is seeking to expand the WEIM’s real-time trading market with an extended day-ahead market (EDAM). Stakeholders have been meeting since January to hammer out key design elements of the EDAM, and CAISO plans to release a straw proposal on April 28.
The ISO is planning to finalize the market’s design this year and to on-board its first participants in early 2024.
“The day-ahead timeframe is where the majority of energy transactions occur,” CAISO said in its Q1 news release.
“By optimizing diverse generation resources and transmission connectivity on a day-ahead basis across the WEIM’s wide geographic footprint, market participants and consumers could realize even greater reliability, economic and environmental benefits.”