Significant developments have occurred recently in wholesale electricity markets in the lower Midwest and Western regions of the U.S.
Earlier this week, the Federal Energy Regulatory Commission approved a substantial expansion of the Southwest Power Pool (SPP). SPP is a FERC-regulated Regional Transmission Organization that administers the grid across a nine-state footprint in the south central part of the U.S and serves more than 15 million customers. As the grid operator, SPP assures that electricity supply and demand is balanced at all times by securing resource commitments in energy “imbalance” auction markets.
Joining SPP are the Upper Great Plains Region of the U.S. Western Area Power Administration, which owns high-voltage transmission facilities and markets federally generated hydroelectric power, Basin Electric Power Cooperative and Heartland Consumers Power District. According to FERC, the addition of these three systems “expands the geographic footprint of the regional power market to include a significant portion of the Upper Great Plains that spans the Eastern and Western Interconnections of the U.S. electric grid.”
Further to the west, the new Western Energy Imbalance Market (EIM) successfully launched on November 1. The EIM extends the California ISO’s real-time wholesale imbalance market to other entities in the west, and is expected to enhance grid reliability and responsiveness, effectively integrate renewable power and save wholesale energy costs. According to CAISO, the EIM reduces the amount of costly energy reserves utilities have to carry because utilities will be able to access resources across the West. PacifiCorp, which operates across a six-state area, is the only participating non-CAISO utility now, but NV Energy in Nevada will join the EIM next year.
Finally, a wholesale imbalance market may take shape in the Pacific Northwest as well. The Northwest Power Pool, a voluntary organization comprised of major generating utilities serving the Northwestern U.S., British Columbia and Alberta, issued an RFP for a market operator for an energy imbalance market. According to the RFP, the selected market operator will develop and implement a market targeted to start October 1, 2017 “that will fulfill the goals of increased efficiency in the utilization of energy resources and enhanced reliability for the region.” The RFP notes that utilities in the region need additional tools to balance the system due to the growth of variable energy resources and are managing load and resource balance without systematically sharing the diversity between their systems. In addition, the region’s constrained transmission system needs new tools for congestion management.