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The benefits of an expanded Western electricity market
By Anita Decker, Chair of the WEIM Governing Body
April 22, 2022
Win-win solutions can be hard to come by but the latest news about the Western Energy Imbalance Market (WEIM) topping more than $2 billion in benefits for participants since the market began in 2014 is exactly that.
For starters, it is $2 billion that helped reduce costs for market participants that might have otherwise been at least partially borne by their customers. That same $2 billion reflects a significant reduction in greenhouse gas emissions for WEIM participants because the market helps move energy when it’s abundant in one location to another when it’s needed. That abundance of energy is often renewable.
This $2 billion milestone was achieved in a little more than seven years since the WEIM began with just the California ISO and PacifiCorp as members. The market will soon have 19 entities in 10 states collectively serving 77 percent of the demand for electricity in the Western United States. Any way you slice it, this is rather extraordinary because in the energy industry, watershed accomplishments achieved so quickly are not easy to come by.
This success is the result of a diverse group of entities willing to work together to find common ground and common solutions as the WEIM has continued to grow and evolve. In that search for common ground among disparate entities across a broad geographic footprint, it is to the credit of WEIM participants and stakeholders who continue to find better ways to manage, operate and harvest more benefits along the way. The end goal for all of us is a robust system that supports a reliable, affordable energy imbalance market with ever increasing amounts of renewables that produce cleaner power across the West.
The WEIM continues to expand - participants, stakeholders and new entrants continue to work together and the benefits continue to accrue. Today, we see more interest in taking that next step to an Extended-Day-Ahead-Market (EDAM).
This new market opportunity is bringing together utilities, independent power producers, regulators, elected officials and other stakeholders who see the potential for that $2 billion to be parlayed into multiples of billions with a West-wide footprint and a market that extends into the day-ahead timeframe and potentially beyond.
Exactly who would benefit from these expanded West-wide opportunities? Our Western economy, consumers, businesses and communities.
The principle of economies of scale and a willing collaboration will bring these benefits to fruition, just as has been the case with the WEIM and its evolution.
Of course, as a Governing Body member of the WEIM, I am acutely aware of the concern regarding governance. My personal interest is that the EDAM initiative continues to move forward with the support of participants and stakeholders as the WEIM has done, cognizant of obstacles that must be overcome while recognizing the rewards as there is continued evolution of the EDAM design and its associated governance.
California, like its neighboring states, cannot go it alone, not when there is so much more to be gained by a fully integrated West-wide market. The West is not a singular entity. Our politics and policies differ from California to the Northwest, Southwest or Rocky Mountain region. But the fact remains that our end goals are often compatible. When we keep our eye on the big picture and what’s best for our market participants, consumers and the environment, we can seize the opportunities before us to go well beyond the WEIM’s $2 billion. We can realize even greater benefits for the Western economy, energy affordability and reliability by forging ahead to the next win-win, an extended-day-ahead West-wide market.
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