by Paul Ciampoli
APPA News Director
Posted September 10, 2019
Basin Electric Power Cooperative, Tri-State Generation and Transmission Association and the Western Area Power Administration on Sept. 9 announced their decision to join the Southwest Power Pool (SPP) Western Energy Imbalance Service (WEIS) market.
SPP said that when it launches the WEIS in February 2021, it will become the market administrator for these and potentially other utilities in the west. The market will centrally dispatch energy from these participants throughout the region every five minutes.
WAPA’s agreement includes the firm electric service loads and resources of Pick-Sloan Missouri Basin Program–Eastern Division, Loveland Area Projects and Salt Lake City Area Integrated Projects, in the Upper Great Plains Western Area Balancing Authority and Western Area Colorado Missouri Balancing Authority footprints.
As the market’s administrator, SPP “will maintain the reliability of the region’s transmission system and meet demand with the most cost-effective generation available, reducing wholesale electricity costs for participants. Like SPP’s previous markets, the WEIS will provide price transparency of wholesale energy, allow parties to trade bilaterally and hedge against costly transmission congestion,” SPP said.
SPP is accepting commitments from additional customers to be included in the market’s initial go-live through Oct. 25, 2019. SPP said it is committed to the long-term success of the WEIS and plans to operate under a Western Joint Dispatch Agreement, which guarantees participants a say in the market’s ongoing evolution. Utilities do not have to be a member of the SPP regional transmission organization (RTO) to participate.
“We are committed to seeking mutually beneficial partnerships consistent with sound business principles,” said WAPA Administrator and CEO Mark A. Gabriel. “With the pace of change in the electric industry increasing, generation options evolving, and pressing needs regarding balancing area operations, we have a need to look at different market structures for WAPA’s diverse customers and needs. Our goal is to keep our value at the highest level while adhering to our core value to do what is right.”
The WEIS is one of several components of SPP’s Western Energy Services family of contract-based products.
SPP also Western Interconnection Unscheduled Flow Mitigation Plan and is on track to launch reliability coordination services for a number of western utilities in December 2019.
It is also in the early stages of developing planning coordination services, by which it would help utilities study and plan upgrades to the region’s transmission system.
In early April, SPP called on interested utilities and other customers to join in the design and implementation of an EIS in the West and in June it provided details on its proposal for a Western EIS market.
Basin Electric is a consumer-owned, regional cooperative headquartered in Bismarck, N.D. It generates and transmits electricity to 141-member rural electric systems in nine states: Colorado, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, South Dakota and Wyoming. These member systems distribute electricity to about 3 million consumers.
Colorado-based Tri-State G&T’s membership including 43 distribution cooperatives and public power districts that collectively serve 1.3 million people across nearly 200,000 square miles of the West, including the states of Colorado, Nebraska, New Mexico and Wyoming.
WAPA annually markets and transmits more than 25,000 gigawatt-hours of power from 57 federal hydroelectric power plants owned and operated by the Bureau of Reclamation, Army Corps of Engineers and International Boundary and Water Commission in 15 western and central states.
EIM launched in 2014
The California Independent System Operator (CAISO) launched its Western EIM in 2014 and the market’s first participant was Oregon-based PacifiCorp. Las Vegas-based NV Energy followed on Dec. 1, 2015, Puget Sound Energy of Bellevue, Washington, and Arizona Public Service of Phoenix, Arizona, on Oct. 1, 2016, Portland General Electric on Nov. 1, 2017, and Idaho Power and Powerex of Vancouver, British Columbia on Apr. 4, 2018.
CAISO on April 4 announced that Sacramento Municipal Utility District, part of the Balancing Authority of Northern California, successfully began full participation in the Western EIM.
Other entities scheduled to begin participation include Seattle City Light, and Arizona’s Salt River Project in 2020; Los Angeles Department of Water and Power, Albuquerque, N.M.-based Public Service Company of New Mexico, Northwestern Energy of Butte, Montana, and California’s Turlock Irrigation District in 2021; Washington State-based Avista, Tacoma Power and Tucson Electric Power in 2022.
The Modesto Irrigation District Board of Directors on August 27 unanimously voted to proceed with implementation, administration and participation within the EIM.
MID will participate in the EIM through the Balancing Authority of Northern California, of which MID is a member. WAPA’s Sierra Nevada Region, which covers parts of California and Nevada, and BANC on September 4 jointly announced their intent for BANC to sign an agreement for the Sierra Nevada Region, located within BANC, to participate in the EIM beginning in April 2021. The agreement represents BANC Western EIM Phase 2, which includes MID and WAPA, and —once they receive final governing body approval—the City of Redding and City of Roseville
BPA makes case for Western EIM, proposes signing CAISO agreement
The Bonneville Power Administration on June 20 issued a letter to the region in which BPA describes the business case and legal authority for joining the Western EIM, as well as what it said are important related policy proposals. The letter to the region also proposed BPA sign an EIM Implementation Agreement with CAISO.
Public power utilities, IOUs study joining western energy market
Meanwhile, public power utilities Colorado Springs Utilities and Platte River Power Authority on Aug. 30 were joined by investor-owned utilities Xcel Energy and Black Hills Energy in announcing that they are evaluating the opportunity to join an EIM. They have launched an in-depth study to determine the best course of action.
Xcel Energy, Black Hills Energy, Colorado Springs Utilities and Platte River Power Authority have secured an independent consultant, which is evaluating the benefits and costs associated with the utilities’ participation in one of two markets -- the WEIS proposed by SPP earlier this year or the existing Western EIM, operated by CAISO.
The study will help the four utilities evaluate which option would provide the most benefit to customers.
Currently, the four energy companies share resources and balance demand for electricity during peak periods through a joint dispatch agreement.