The board overseeing the Los Angeles Department of Water and Power gave the publicly owned utility the go-ahead to join CAISO’s Extended Day-Ahead Market (EDAM), a move expected to increase the LADWP’s annual net revenue by almost $40 million, according to a Dec. 17 announcement.

With the Los Angeles Board of Water and Power Commissioners’ backing, LADWP is slated to officially enter the EDAM in mid-2027. By joining the market, LADWP officials said it aims to enhance operational flexibility and reliability while assisting Los Angeles and California to achieve 100% clean energy by 2035.

Additionally, “[a]s an active EDAM participant, LADWP estimates a potential increase in net revenue from $20 million to $59 million annually based on the current analysis and depending on the final number of EDAM participants,” Ann Santilli, LADWP’s CFO, said in a statement. “The majority of the projected increased revenue is expected to result from savings in adjusted production and operation costs.”

LADWP noted in the announcement that it will “retain local control over its generation and transmission assets, as well as its ratemaking authority, similar to its involvement in the WEIM.”

The largest municipal utility in the U.S., LADWP has been participating in CAISO’s real-time Western Energy Imbalance Market (WEIM) since April 2021. EDAM will expand the capability of the WEIM by including trading of day-ahead energy, which requires increased coordination among participants. As it works to attract members, the ISO faces competition from SPP’s Markets+ day-ahead offering, which has generated especially strong interest in the Northwest and Southwest.

Four Arizona utilities announced their plans to join SPP’s Markets+ day-ahead market in November. In addition, the Bonneville Power Administration has expressed a “leaning” toward Markets+ over CAISO’s EDAM.

Although Powerex has yet to make a formal commitment to a day-ahead market, it has clearly signaled an intention to join Markets+ and not join EDAM.

However, EDAM has notched several wins in the competition for participants. PacifiCorp, Portland General Electric and Balancing Authority of Northern California have signed EDAM implementation agreements with CAISO.

Additionally, Idaho Power, NV Energy, BHE Montana, PNM and Seattle City Light have all signaled their intent to join EDAM.

“We are thrilled to see the Los Angeles Department of Water and Power, the largest municipal power utility in the United States, formally commit to the Extended Day-Ahead Market,” CAISO CEO Elliot Mainzer said in a statement. “This commitment underscores the importance of expanding market participation to enhance grid reliability and efficiency across the West. LADWP’s involvement will provide greater access and connectivity to diverse energy resources, building on the substantial economic, reliability, and environmental benefits we’ve already seen from the Western Energy Imbalance Market.”

Extensive Reach

While LADWP’s service territory is limited to the city of Los Angeles, its reach extends far into other parts of the West. The utility owns and operates more than 3,600 miles of transmission lines spanning five states, including half the capacity on the 3,100-MW Pacific DC Intertie linking the L.A. metro area with the Bonneville Power Administration’s balancing authority area in the Pacific Northwest.

LADWP’s other interstate transmission assets include 60% of the contract capacity rights on the Southern Transmission System line connecting Southern California with the Intermountain Power Project (IPP) in Utah, a 36% ownership stake in the Mead-Adelanto Transmission Project connected to Nevada and co-ownership of the Navajo-McCullough Transmission Line between the now-retired Navajo Generating Station in Arizona and the McCullough substation in Nevada.

The utility also controls about 8,000 MW of generating capacity, including the 1,900-MW coal-fired IPP, 15% of the output from the 2,080-MW Hoover Dam in Nevada and 5.7% of output from the 3,300-MW Palo Verde nuclear generating station in Arizona.

IPP is slated for conversion to an 840-MW natural gas-fired plant in 2025, including turbines capable of burning a fuel mixture containing 30% hydrogen. In 2023, LADWP was authorized to convert its Scattergood Generating Station, the largest gas-fired plant in Los Angeles, to hydrogen.