NV Energy is aiming to bring a proposal to Nevada regulators by the end of the year for joining a day-ahead market, but what process regulators will use to evaluate that request is still very much up in the air.
“It would be good for our internal purposes and potentially for others in the West, because a lot of the utilities in the West feel that their market decisions are based in not insignificant part on what their neighbors are doing,” David Rubin, NV Energy’s federal energy policy director, said during a March 4 workshop. “There are clearly relationships, for example, between Nevada and Idaho.”
Rubin said that by filing a proposal with the Public Utilities Commission of Nevada (PUCN) by the end of the year, NV Energy could let others know the company’s intentions before they have to decide on making a “fairly significant” financial commitment for the next phase of SPP’s Markets+. CAISO’s Extended Day-Ahead Market (EDAM) and Markets+ are competing to attract day-ahead market participants.
Rubin said the interrelationship among utilities in the West when it comes to day-ahead markets is underscored by recent studies, including a just-released report from Brattle Group, which found greater economic benefits for NV Energy if the utility went with EDAM rather than Markets+. (See NV Energy to Reap More from EDAM than Markets+, Report Shows.)
PUCN Investigation
Rubin’s comments came during a PUCN workshop conducted by Commissioner Tammy Cordova, the presiding officer in an investigation of regional market activities in the West. In addition, state law requires NV Energy to join an RTO by 2030, and the investigation will look into how the PUCN will oversee that process.
NV Energy and other interested parties filed written comments on the matter ahead of the workshop. (See Nev. Regulators to Weigh Approaches to RTO Membership.)
Some commenters said the commission could consider an NV Energy proposal to join a day-ahead market through its energy supply plan (ESP) — a process that was used in 2014 when the utility decided to join CAISO’s Western Energy Imbalance Market (WEIM). But joining an RTO would be more complex, and new rules from the PUCN might be needed, some said.
During the workshop, Shelly Cassity of the PUCN’s regulatory operations staff said joining a day-ahead market is “a much bigger step” than becoming a WEIM member. And the 135-day timeline for evaluating an ESP is relatively short, she said.
“We think that the ESP process may not be the ideal route,” Cassity said. “We think regulations may be necessary.”
Similar Issues in Colorado
In considering day-ahead market and RTO issues, the PUCN may look to Colorado, where the legislature in 2021 passed a bill requiring utilities to join an RTO by 2030, similar to Nevada’s Senate Bill 448. The Colorado Public Utilities Commission has been working on rules to guide the process of joining a day-ahead market or RTO and recently released draft regulations.
During the PUCN workshop, Brian Turner, a director at Advanced Energy United, said the Colorado PUC is looking at splitting the decision about utilities joining an RTO into two parts: whether the RTO meets criteria laid out in statute and then whether joining an RTO is in the public interest.
The definition of an RTO in Nevada’s SB 448 includes requirements that the organization be FERC approved, improve reliability in the state and have a governance structure that’s independent of transmission users.
Cordova indicated she was open to considering Colorado’s approach.
“As we keep telling people, this is Nevada, it’s not Colorado,” she said. “But I am also a big fan of not creating a wheel that I didn’t have to invent.”
PUCN’s March 4 workshop is expected to be followed by additional workshops, including at least one focused on the Brattle Group findings and other studies of potential market benefits.
Cordova said she’d issue a procedural order laying out a timeline for the proceedings in the next week or so.