In a coordinated evaluation, four Colorado utilities, including two investor-owned and two public power entities, announced they have launched an in-depth study to determine whether to join an energy imbalance market of the Southwest Power Pool or the California ISO.
The group includes Xcel Energy Inc., Black Hills Corp. subsidiary Black Hills Energy, Colorado Springs Utilities and the Platte River Power Authority.
The partners have secured an independent consultant that is evaluating the benefits and costs of each option. The California ISO has established its Western Energy Imbalance Market, which now has nearly 20 active and prospective participating utilities across the western U.S. and Canada. The Southwest Power Pool earlier this year proposed to offer an energy imbalance service market in the Western Interconnection.
The evaluation, to be conducted by consulting firm The Brattle Group, is likely to be closely watched as both the CAISO and SPP compete for participants, not only in their rival energy imbalance market, or EIM, offerings, but for their services as reliability coordinators in the West.
SPP wants to offer its Western Energy Imbalance Service market to balance generation and load in real time on a contract basis, meaning utilities will not have to be members of SPP to participate.
The four Colorado utilities — Xcel Energy's Colorado operations are known legally as Public Service Co. of Colorado — already share resources and balance demand for electricity during peak periods through a joint dispatch agreement, but they see value in joining a larger market that would provide more opportunities to exchange energy and integrate more clean energy, they said in a news release Aug. 30 in announcing the EIM study.
An EIM is a real-time market in which energy from multiple power providers is dispatched at the lowest possible cost to serve the combined customer demand across a region.
"Working together, we have the potential to drive down fuel costs and provide customers with more energy from wind and solar resources," Xcel Energy Colorado President Alice Jackson said in the news release. A decision is expected by the end of this year.
Minnesota-headquartered Xcel Energy has operations in multiple states and has utilities that are members of SPP and the Midcontinent ISO.
Meanwhile, CAISO continues to expand its EIM reach in the Western Interconnection. The Modesto Irrigation District just announced its plans to participate in the western EIM, beginning in 2021.
