CAISO’s launch of the Extended Day-Ahead Market (EDAM) will not spell the end of a Western real-time-only offering from the ISO, according to CEO Elliot Mainzer. 

“Participation in the EDAM is voluntary, allowing an entity participating in the Western Energy Imbalance Market (WEIM) to extend its participation to EDAM, to remain only in the WEIM, or to exit one or both markets for any reason,” Mainzer wrote in a Dec. 23 letter addressed to the Bonneville Power Administration.  

“While participation in EDAM necessarily requires that an entity also participate in the WEIM, we remain fully committed to maintaining support for the WEIM indefinitely,” he wrote. 

Mainzer’s letter comes in response to a statement BPA Administrator John Hairston made in his own Dec. 13 letter to Seattle City Light CEO Dawn Lindell, which defended the federal power agency’s continued preference for joining SPP’s Markets+ despite the findings of a BPA-commissioned study showing the agency would realize greater financial benefits from participating in EDAM. (See BPA Touts Markets+ in Response to Seattle City Light Opposition.) 

The production cost study by Environmental and Energy Economics (E3) examined a variety of market scenarios, including a “business as usual” case in which Western entities continue to trade day-ahead electricity in the bilateral market while remaining in their existing real-time markets (either the WEIM or SPP’s Western Energy Imbalance Service) — a scenario in which BPA would realize an estimated $138 million in annual benefits.  

But Hairston’s letter to Lindell noted that BPA expects the existing benefits of the real-time WEIM — in which BPA is a participant — to “erode” as many of its members begin to participate in either of the organized day-ahead markets. 

“As EIM entities move to the Extended Day-Ahead Market (EDAM) proposed by … CAISO, there is no guarantee WEIM will continue to be offered as a standalone program, which is a risk to the potential benefits and long-term viability of a WEIM-only scenario for Bonneville,” Hairston wrote. 

Mainzer’s letter looks to be intended to counter that assertion. 

“We fully expect that some balancing authorities in the West will choose to remain in WEIM without joining EDAM,” he wrote,” he wrote. “These entities would continue to submit base schedules in WEIM as they do today and would be optimized across the entire real-time market footprint, including both entities participating only in WEIM and those participating in EDAM after it launches.” 

The Dec. 19 letter also provided a platform to Mainzer to contrast CAISO’s “incremental” approach to market participation with that of Markets+, which will require its members to participate in both a real-time and day-ahead market and join the Western Power Pool’s Western Resource Adequacy Program (WRAP).  

BPA and most of its “preference” customer base of publicly owned utilities have pointed to the WRAP requirement as a key factor in their assessments favoring Markets+.   

But Mainzer said CAISO has designed its markets in part to factor in the “diversity” of the West and allow its participants to make the decisions that work best for them and their customers.” 

“For example, just as we do not require entities to migrate from WEIM to EDAM, there is also no mandate for market participants to join a particular resource planning or resource adequacy program. Instead, the Western energy markets have been specifically designed to accommodate the decisions of our partners that work best for their unique circumstances.” 

Mainzer’s letter marks the first time CAISO has weighed in formally on BPA’s day-ahead market decision process since the agency initiated the effort in July 2023. BPA staff expect to issue a draft market decision in March followed by a final decision in June.