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APS, Puget Sound Energy launch participation in CAISO energy imbalance market

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APS, Puget Sound Energy launch participation in CAISO energy imbalance market

Arizona PublicService Co. and PugetSound Energy Inc. began full participation in the western Energy ImbalanceMarket on Oct. 1 in a significant expansion of the load and resource balancingsystem, the CaliforniaISO announced.

The ISO is the market operator and is responsible forrunning and settling the EIM. This wholesale power market enables participatingutilities to buy low-cost energy across eight western states. The EIMautomatically dispatches least-cost energy in real time.

In joining with Berkshire Hathaway Energy subsidiaries and as EIM participants, APSand Puget Holdings LLCsubsidiary PSE will strengthen the market, ISO President and CEO SteveBerberich said in a press release. That is because a wider portfolio ofresources is available to maintain system balance and reduce costs of energyand capacity.

The ISO said it uses advanced software to automaticallyanalyze western grid needs and find the lowest-cost generation to meet demandevery five minutes. Participating utilities also can access low-cost renewableenergy in other western states in real time to offset local power plants.

The EIM provides improved situational awareness andreal-time visibility of transmission constraints. It dispatches resources toreduce and avoid congestion issues, the ISO said on its web site.

While APS said its power plants will continue to be theutility's first and primary source of energy, the EIM's real-time marketcapabilities will help Arizona's largest utility respond quickly to variablerenewable energy production and better incorporate renewable resources byautomatically adjusting to intermittency.

EIM automatically finds the most efficient energy resourcesavailable if APS decides to buy or sell power in the marketplace, the utilitysaid in a press release. That is the difference between participating in theEIM and relying only on traditional, less flexible energy markets, APS said.

Since the EIM was launched on Nov. 1, 2014, it has producedbenefits of more than $88 million by using the low cost energy available tomeet changes in real-time energy demand. Those savings are projected toincrease as more utilities join the EIM, the ISO said.

APS customers could save $7 million to $18 million a yearthrough EIM participation, while PSE could save $18 million to $30 million, theISO said.

From January through June this year, greenhouse gasemissions were reduced by an estimated 292,000 metric tons because of EIMparticipation, the ISO added.

PortlandGeneral Electric Co. is scheduled to enter the market in October2017, and IDACORPInc. subsidiary IdahoPower Co. plans to enter the market in April 2018.

The EIM now serves California, Washington, Oregon, Idaho,Wyoming, Nevada and Utah. The ISO has offered the system to western utilitiesacross 14 states.

While doing business with other utilities is not new forAPS, the utility said the EIM enables the Pinnacle West Capital Corp. subsidiary to buy and sellpower in increments as small as five minutes, thereby obtaining efficienciesnot possible with traditional hour-ahead trading practices.

The ISO is hopeful the EIM's success will encourageformation of a regionalgrid that would interconnect utilities and energy resourcesthroughout the Western Interconnection. California Gov. Jerry Brown and the ISOare working withlegislators, governors and stakeholders on a governance proposal that would include a body of state regulatorsto evolve the ISO into a regional organization for development of electricitymarkets across the West.