“I have been encouraged by efforts to enhance regional coordination and improve market efficiency in the West. The proposed EIM is a voluntary regional initiative that allows participants to benefit from a real-time energy market to balance electricity supply and demand on the grid and improve reliability.”
U.S. Senate Majority Leader Harry Reid wrote in a May 15, 2014 letter to the FERC
“The Energy Imbalance Market will help grid managers in Nevada, California, and five other states optimize renewable energy resources, balance power supplies, enhance grid reliability, and reduce power costs for customers by taking advantage of a larger, multi-state pool of geographically diverse energy resources.”
California Governor Edmund G. Brown Jr. and Nevada Governor Brian Sandoval in a May 22, 2014 letter to FERC
“This is a vital opportunity for us and for the larger western grid as we look for ways to efficiently and more economically dispatch resources, optimize systems and integrate renewable power to the benefit of all customers.”
Steve Berberich, ISO President and CEO
“An EIM facilitates deep penetrations of renewable energy into the western grid in a couple of ways. First, by allowing participating utilities to share power generation they hold in reserve, it is easier and cheaper to continuously balance generation and customer loads to keep the grid stable. Second, it enables market participants to use existing transmission line capacity more completely. An EIM saves money for consumers because by dispatching the grid more efficiently, congestion and the need for duplicative generation and transmission infrastructure is avoided.”
Carl Zichella, Director of Western Energy Transmission, Natural Resources Defense Council, said in his blog dated Feb. 14, 2014.
“Those who join would be trading in a “Model T for a Ferrari... A human, even a really good one, can’t handle so many plants.”
Stefan Bird, senior vice president of PacifiCorp’s commercial and trading operations, told Bloomberg on May 27, 2014.
“The announcement from the California Independent System Operator (ISO) and PacifiCorp represents landmark progress toward addressing a significant issue identified in last week’s Bipartisan Policy Center Grid Initiative Report (and in a lot of other places) – that the lack of coordination between balancing authorities in the West is making the cost of integrating renewable resources onto the grid unnecessarily expensive. As co-chair of the report issued by the bipartisan think tank, I have learned how important this commitment to create an energy imbalance market, also known as an EIM, by October of 2014 is to system reliability and satisfaction of existing state Renewable Portfolio Standards and other renewable generation goals.”
Allison Clements, Senior Attorney, Project for Sustainable FERC Energy Policy
“The ISO is to be commended for conducting a thorough and meaningful stakeholder process to fully vet a market design that will bring numerous benefits to customers in California as well as the West.”
Bob Weisenmiller, Chairman, California Energy Commission
“Increased coordination of energy systems in the West is critical if we are to meet important challenges such as ensuring reliability, keeping costs down for customers and effectively integrating renewable resources.”
Greg Abel, PacifiCorp Chairman and CEO
As a federally regulated nonprofit organization, the ISO plans and operates the state's high-voltage electric grid and "keeps the lights on"
for California and a portion of Nevada.
Welcome to the second edition of Energy Matters, a quarterly newsletter from the California Independent System Operator (ISO). As many of you know, the state’s electricity industry has made significant advances in the past decade. But we are now entering a new energy era that will spur innovative technologies, shift the energy business model, and demand commitment and creativity from stakeholders over the upcoming decades.
Here at the ISO, our mission is to constantly seek ways to improve reliability of electricity flow, reduce reliance on carbon emitting energy sources and keep costs low for consumers. This edition of Energy Matters focuses on an important and critical enterprise – the Energy Imbalance Market – that promises to meet all three of those objectives.
The Energy Imbalance Market, or EIM, will allow the ISO to balance demand with the lowest cost generation available across six states. Working with resources over a much larger geographical area also optimizes the use of energy produced by solar and wind, further reducing our reliance on carbon emitting resources.
In this edition, you’ll learn about EIM and meet members of its recently-seated Transitional Committee, which is charged with developing recommendations on EIM’s long-term governance structure.
I’m sure you’ll find this information helpful as we move forward building a more reliable and environmentally responsible energy future.
Steve Berberich, President and CEO
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ISO Ushers in Energy Imbalance Market,
New Era of Managing the Electric Grid
With the upcoming launch of its Energy Imbalance Market (EIM), the California Independent System Operator (ISO) – with its partners Portland-based PacifiCorp and Nevada’s NV Energy – will usher in a new era in power grid management that will generate significant benefits to participants, scheduling coordinators and, more importantly, electricity consumers in the Western U.S.
Utilizing industry-leading technology that can immediately identify changes in supply and demand, EIM participants can call on the lowest cost energy resource available every five minutes to meet consumer demand.
EIM will initially leverage power resources across six states – California, Oregon, Washington, Utah, Idaho and Wyoming. NV Energy, which delivers power in Nevada, will begin participation in the EIM in October 2015.
This multi-state collaboration will improve the reliability of electricity delivery, optimize use of renewable energy and lower the wholesale cost of energy. Based on a study conducted in 2013, projected cost savings to range between $21 million and $129 million annually with an additional savings of $29 million when NV Energy begins participation.
The EIM has broad support, including from the governors of both California and Nevada. In a joint letter to the Federal Energy Regulatory Commission dated May 23, 2014, California Governor Edmund G. Brown Jr. and Nevada Governor Brian Sandoval wrote: “The Energy Imbalance Market will help grid managers in Nevada, California and five other states optimize renewable energy resources, balance power supplies, enhance grid reliability, and reduce power costs for customers by taking advantage of a larger, multi-state pool of geographically diverse energy resources.”
Both governors also expressed confidence in the ISO, which has brought significant innovations to its market over the past five years. The ISO is clearly positioned to lead the electricity industry in “greening the grid.”
California has mandated that all utilities provide just over one-third of their energy through renewable resources by 2020. These renewable resources – like wind and solar – produce energy at different times, and sometimes produce energy when it can’t be used. EIM offers partners access to energy produced at different times throughout the West, depending on weather conditions and time of day. By balancing demand with production over more geographic area, renewables in one state can help satisfy energy needs in another, more effectively managing – not wasting – excess generation of intermittent resources, and helping us and our industry meet our goal to “green the grid.”
EIM is expected to reduce energy costs by tapping into a wider array of lower priced electricity resources to meet demand. Reducing congestion on the grid will also increase the reliability of transmission systems.
The interest across the West in EIM has also spurred requests to give entities outside the ISO a larger voice in future decisions impacting EIM. To address this need, a Transitional Committee has been formed consisting of industry leaders from Western states.
In August, the ISO Board of Governors confirmed Rebecca Wagner, Public Utilities Commission of Nevada Commissioner, to chair the EIM Transitional Committee. The 11-member committee is charged with developing recommendations on EIM’s long-term governance structure.
Together with stakeholders and industry partners, the ISO is about to embark on a journey toward more efficient, innovative and environmentally-friendly energy delivery, and the consumer will be the ultimate winner.
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What you should know about the EIM team
With more than 10,500 megawatts of generation capacity, PacifiCorp will be the first company to team up with the ISO in a new Energy Imbalance Market in October 2014. With the addition of the modernized market, both balancing authorities will be able to utilize a broad range of energy sources. This diverse and wide range of sources is intended to cut costs as well as promote usage of renewable resources. PacifiCorp has a wide portfolio of resources including thermal, hydro, wind, and solar that ranges from Utah, to Wyoming all the way up to Washington. PacifiCorp owns and operates a transmission range of over 16,300 line miles and serves customers in six states, balancing generation interconnection stations around the Rocky Mountain region and Pacific Northwest.
Total Capacity: over 10,500 MW
Joining: October 1, 2014
State(s): Oregon, Washington, California, Utah, Wyoming, Idaho
Similar to the ISO, NV Energy is currently exceeding the state mandated Renewable Portfolio Standard. NV Energy’s Northern Nevada customer demand peaks at around 1,760 MW and the company’s Southern Nevada demand peaks at about 5,800 MW. The company’s goal of joining the energy imbalance market matches that of PacifiCorp, to lower costs and reinforce reliability for their customers. Joining EIM also would aid NV Energy in maximizing the state’s renewable portfolio.
Total Capacity: 6,078 MW
Joining: October 2015
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Meet the Energy Imbalance Market Transitional Committee
In May 2014, the ISO Board of Governors appointed 11 members to the Energy Imbalance Market (EIM) Transitional Committee. The committee is comprised of regional stakeholders whose primary objective is to advise the Board on a long-term, independent governance design for EIM. The members were nominated by industry stakeholders with two representatives from participants, PacifiCorp and NV Energy.
The Board confirmed Public Utilities Commission of Nevada Commissioner Rebecca Wagner as chair of the committee in July 2014.
Meet the EIM Transitional Committee:
Director of Market Operations, Xcel Energy, Inc.
Mr. Beuning has worked for Xcel Energy for 30 years, serving most recently as the Director of Market Operations. He is also the president of the Utility Variable-Generation Integration Group, which provides a forum for utility dialog on efficient operation, maintenance and integration of wind and solar resources on the bulk electric system. He has been an early and active participant in the regional discussions for EIM.
President, Braun Blaising McLaughlin & Smith
Mr. Braun has 15 years of experience working in the energy field, most recently as president of a law firm specializing in energy issues. He has been actively involved with the Federal Energy Regulatory Commission (FERC) and the ISO, and has worked on a range of legal and policy issues from wholesale energy market design to renewable development and California’s climate change policies. His experience representing diverse industry interests makes him ideal for finding broad-based solutions to complex challenges.
Vice President, FERC and ISO Relations for Pacific Gas & Electric Company
With a background of almost 30 years working for Pacific Gas & Electric Co., Ms. Hapner has a successful track record of addressing compliance and policy issues with state officials, the FERC and the ISO. Having held a number of leadership roles throughout her career, Ms. Hapner has demonstrated the ability to work well with different entities to find a collaborative path forward. She also understands the need to provide a safe, reliable and affordable service to customers, and is committed to the success of a well-functioning EIM.
Commissioner, Montana Public Service Commission
Mr. Kavulla serves as an elected Public Service Commissioner in Montana and on the board of directors on the National Regulatory Research Institute and the National Association of Regulatory Utility Commissioners. He has experience in complicated governance processes including serving on the Western Electricity Coordinating Council (WECC) Board of Directors during the organization’s bifurcation. As the chair of the PUC-EIM group under the Western Interstate Energy Board, Mr. Kavulla has played a key role in enhancing the understanding of EIM in the West and brings a deep understanding of the market design issues to his role on the committee.
Managing Director of External Affairs, Iberdrola Renewables
Mr. Lynch leads external affairs for Iberdrola Renewables, one of North America’s top developers and marketers of renewable energy. Having worked for more than 23 years in the electric industry, including PPM Energy and PacifiCorp, Mr. Lynch has a broad understanding of the energy markets in the Western U.S. He also is a strong advocate for mechanisms that will provide greater efficiency in the electric infrastructure, integration of additional variable generation, and lower costs to consumers.
Vice President of Market Design, Calpine Corporation
Mr. Smith worked at Pacific Gas & Electric Co. for 18 years and was a member of the California ISO startup team. He now serves as Vice President of Market Design at Calpine Corporation, the owner and operator of the largest independent generation fleet in California that includes both conventional and renewable resources. His background and perspective on real-time market issues brings a wealth of experience to the committee.
Commissioner, Public Utilities Commission of Nevada
Selected unanimously to serve as chair of the EIM Transitional Committee, Ms. Wagner brings in-depth knowledge to the organization. In more than eight years as a commissioner with the Public Utilities Commission of Nevada, she has tackled diverse and complex energy issues. She has served as the vice-chair to the Western Interconnection Regional Advisory Board and chair of the Western Renewable Energy Generation Information System Committee, and has consistently promoted efficiency and value for the western interconnection and its customers.
Chair, California Energy Commission
With more than 30 years of experience in the industry, Mr. Weisenmiller is a highly qualified and distinguished member of the committee. Appointed by Governor Arnold Schwarzenegger and later by Governor Edmund G. Brown, he has held the position of Chair of the California Energy Commission since 2011. While at the CEC, he led numerous successful policy programs, including accelerated development of renewable energy resources, aggressive increases in the energy standards for buildings, and improved coordination with the California Public Utilities Commission in energy procurement policies.
Director for Western Transmission, Natural Resources Defense Council
Mr. Zichella will bring ample environmental perspective of effective grid management to the committee. He is the Director for Western Transmission for the National Resources Defense Council and former director for western U.S. renewable projects for the Sierra Club. He previously served as director of the Climate Action Reserve and currently serves as a director of the Center for Energy Efficiency and Renewable Technology. He was appointed by Secretary Ernest Moniz to the Department of Energy’s Electricity Advisory Committee and serves on the Western Governors’ Association’s task force on transmission site and permitting.
Senior Vice President, Transmissions & System Operations at PacifiCorp
With a career spanning nearly 20 years in the industry, Ms. Hocken has a firm grounding in the legal, compliance and operational challenges of energy utility organizations. As a member of PacifiCorp’s executive team, she brings important skills to the complex operational and implementation issues associated with EIM.
Vice President of Transmission, NV Energy
Mr. Spansel is the senior executive lead for NV Energy as an EIM entity. He is an electrical engineer with an extensive history in the wholesale market, including formerly working at Southern California Edison. His experience serving on the board of the North American Transmission Forum and guiding complex management teams provides a results-driven approach to EIM operations.
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