By Robert Mullin
Seattle City Light has signed an agreement with CAISO to begin participating in the Western Energy Imbalance Market (EIM) in April 2019.
“Seattle City Light has preliminarily evaluated the Energy Imbalance Market from an environmental, commercial and reliability perspective, and I believe City Light’s participation can deliver benefits to our customers in all three areas,” City Light General Manager Larry Weis said in a statement.
Weis said City Light’s participation in the EIM would represent the best use of the utility’s resources and expertise to support “a clean energy economy” throughout the West.
“This is the first in a number of steps to better integrate large-scale renewable resources in the West, and a new tool in our ‘tool belt’ to address climate change and set the foundation for a cleaner energy future,” Weis said.
With a generating portfolio heavy in hydroelectric resources, City Light stands to benefit from the EIM as an exporter of the flexible ramping capability needed to smooth out intermittent renewables.
City Light’s participation will ultimately be contingent on satisfying concerns of Seattle City Council members who have asked for a more thorough accounting of the costs and benefits of market membership. (See Council OKs Seattle City Light Bid to Explore Joining the EIM.)
In order to support a decision to join the market, Seattle lawmakers have asked City Light to flesh out the findings of an EIM benefits study performed by consulting firm E3 that showed the utility could earn an additional $4 million to $23 million in yearly revenues from the market. Council members Lorena González and Mike O’Brien expressed concerns about the estimated $8.8 million in upfront costs for joining the market and the uncertainty around revenue projections.
“We will continuously evaluate the financial impact of participation in the Energy Imbalance Market,” City Light spokesman Scott Thomsen told RTO Insider. “If at any time we find that participation would not be in the best interests of Seattle City Light’s customer-owners, we can walk away from the agreement with CAISO at no cost.”
The utility is required to report its updated determinations to the council’s Energy and Environment Committee by April 10, 2017.
City Light would become the seventh balancing authority area to join the market after the entry of Portland General Electric in October 2017 and Idaho Power in April 2018.
It would also likely be the first publicly owned utility to participate in the EIM, although its entry could coincide with that of the Sacramento Municipal Utility District. SMUD announced its intent to join the market September and is expected to sign an implementation agreement early next year, according to Jim Shetler, general manager of the Balancing Authority of Northern California, of which the utility is the largest member. (See SMUD to Join EIM in Spring 2019 at the Earliest.)
