We’re back, and the theme for this month’s newsletter is seams - boundaries between electricity markets. And if the latest flurry of reports, stories, and conversations at CREPC are any indication, the topic of seams, and how we avoid them in the West, seems to be on everyone's mind lately. It is shaping up to be a busy few months in the West as we continue to see developments that tackle the challenge of creating a seamless regional electricity grid across the region.
I'll be at Western NARUC in a few weeks and I hope to see you there.
- Leah Rubin Shen, Managing Director at Advanced Energy United
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Feedback or suggestions for content? Please reach out to us at westernrto@advancedenergyunited.org.
Everyone is talking about seams
For some context: Earlier this year, a report from Energy Strategies examined the negative implications of seams, which can cause problems and inefficiencies due to different rules and procedures in the two markets on either side of the seam. The study finds that potential seams between the two day-ahead markets being considered in the West - CAISO’s EDAM and SPP’s Markets+ - would be fundamentally different in many ways and pose a different set of challenges than those seen at the boundaries of full RTOs in other parts of the U.S. Key takeaway: the tools and lessons learned in the East are not sufficient to address Western day-ahead market seams, in part because day-ahead markets lack some of the tools that are available to full RTOs to minimize seams issues.
As more and more entities are deciding which market to join, it's important to keep this in mind: the fewer seams there are across the West, the fewer barriers there are to transferring electricity. Just two weeks ago, PacifiCorp formally announced its commitment to joining CAISO's EDAM, another step forward to a seamless Western interconnect and a signal of continued progress in Western collaboration. At the same time, several western entities sent a letter to SPP expressing support for continued development of Markets+. Day-ahead market choices depend on many factors, but the Energy Strategies report sheds light on an often-minimized risk of carving the West up into two markets.
What happened at CREPC?
Seams were also top of mind at the CREPC spring meeting, where a panel of Western officials discussed that while utility staff managing real-time operations are equipped to manage the operational challenges of seams between CAISO's EDAM and SPP's Markets+, the economic, environmental, and reliability costs are real and significant.
At CREPC, attendees also received an update from the West-Wide Governance Pathways Initiative on the "Stepwise" straw proposal that the Pathways Initiative released April 10. The Stepwise proposal would lead to independent governance for the WEIM and EDAM by first strengthening the existing Governing Body and then forming a new, independent Regional Organization to assume sole authority over market governance.
Just prior to CREPC, California labor and public utility reps discussed their confidence that this new approach could be successful in achieving more targeted and limited revisions to California law than the previous attempts at wholesale CAISO reform. Stakeholder comments to the straw proposal will be reviewed, and next steps outlined, at the next Pathways stakeholder meeting on May 31 at 10 am PT. You can attend through this Zoom link.
Resource adequacy and reliability was another topic of interest at the CREPC conference, as Western Resource Adequacy Program (WRAP) participants discussed the proposed delay in its "binding" penalty phase by one-year based on concerns about capacity shortages.
Meanwhile, at FERC...
On Monday, FERC is expected to release a new transmission rule that will direct utilities to participate in a long-term, scenario-based regional transmission planning process that expands consideration of needed transmission drivers and evaluates a wider range of benefits than are currently considered.
Late last month, the FERC comment period on the Markets+ tariff ended. SPP Markets+ garnered support from several utilities, including Arizona Public Service, which urged FERC to approve the tariff. There were also pointed critiques from several environmental organizations, and qualified support from clean energy trade organizations, who noted that the current governance structure is flawed. FERC will be making a decision later this year.
A great op-ed from NWEC in support of Pathways' efforts to expand the Western Energy Imbalance Market into a fully integrated market with a new independent governing authority. Optimizing regional diversity can open big opportunities for customers and increase grid reliability.
Pathways Launch Committee Stakeholder Meeting - May 31, 10am-12pm PT. Zoom Link
The Launch Committee will address and review stakeholder comments to the straw proposal and outline next steps.
WestTEC Public Webinar - June 6, 1-3pm PT. Zoom Link
This webinar will provide a progress update on the development of the Study Plan to-date and an opportunity to discuss the WestTEC Project Charter and Stakeholder Engagement Plan. The plan will outline the foundational pillars of the WestTEC Project, including the description of project goals and anticipated timelines, roles and responsibilities of the WestTEC committees, and details and timing regarding opportunities for public engagement in the development of the Study Plan.
Western RTO Newsletter
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