EDAM working groups off to a positive start on key market issues

The ISO’s Extended Day-Ahead Market (EDAM) initiative is one of our key priorities for 2022 and beyond. We are working hard to position EDAM as the next major step toward West-wide market integration designed to increase value, enhance reliability, and improve coordination to help meet state and regional energy policy objectives.

I am happy to report that the momentum around the initiative that we saw during last October’s well-attended EDAM forum and subsequent public meetings is continuing. Three stakeholder working groups have launched and have been holding constructive meetings on a number of important issues.

The meetings have enjoyed wide stakeholder participation, with more than 100 attendees as we have been digging into the following issues:

• Working Group 1: Supply Commitment and Resources Sufficiency Evaluation
• Working Group 2: Transmission commitment and Congestion Rent Allocation
• Working Group 3: Greenhouse Gas Accounting and Costs

These working groups, established after consulting with stakeholders, are meeting twice a week between January and mid-March. This initial work will lead to the publishing of a straw proposal on the comprehensive EDAM market design in mid-April. Comments from stakeholders are due by mid-May, as we all strive for a simple and effective design that evolves over time through compromise and a continuing open and transparent process. More information about the proposed schedule and related materials can be found here.

The working groups wasted no time in getting started right after the winter holidays, reviewing the EDAM Common Design Principles & Concepts and key items within the scope of this initiative, and they are now getting into much more substantive and detailed discussions including presentations from stakeholders themselves. The working group format is proving to be a robust exchange of ideas and perspectives as the details of design are vetted.

The topics covered in Working Group 1 look to shape the requirements and processes related to the day-ahead evaluation for EDAM entities to have sufficient generation to meet their load obligations. Working Group 2 has been focusing on how transmission is made available to the EDAM for optimization in the day-ahead timeframe and the associated compensation mechanisms for transmission that are made available. And, lastly, Working Group 3 is focusing on developing a framework for accounting and reporting requirements on greenhouse gas emissions through the operation of an extended day-ahead market based on diverse energy policies for different states in the region.

As Mark Rothleder, the ISO’s senior vice president and chief operating officer, noted in this space just before Thanksgiving, this stakeholder process was structured to make sure we’ve heard from the start from everyone wishing to share thoughts and concerns.

“I feel confident this front-end working group approach will help create a more informed initial proposal,” Mark wrote. “Once the comprehensive straw proposal is published, we will continue with an open and transparent stakeholder process where we consider and refine the EDAM proposed design across the course of 2022.

It’s great to see so many smart, thoughtful people engaged and participating so that we can jointly come up with a market design and other important protocols that work for entities who want to participate in an extended day-ahead market. To be sure, this will be the start of an exciting journey as our markets must continue to evolve to best meet the challenges of our future energy landscape. On behalf of the entire CAISO, I want to thank everyone working on the EDAM initiative for your focused work, time commitment, and effort to put the right market design and other key concepts in place to help us launch EDAM successfully.