Market simulation for EDAM – a milestone on the way to next spring’s launch
This week, the California ISO successfully began market simulation for the Extended Day-Ahead Market (EDAM), a major milestone in our preparation for its launch next spring.
EDAM will be the first day-ahead electricity market in the West and builds on the success of the Western Energy Imbalance Market (WEIM) which has resulted in more than $7.4 billion in savings to market participants and their customers. Because the day-ahead market is where the vast majority of energy transactions occur, EDAM will return even greater benefits.
Getting to this point has required careful coordination with stakeholders, market participants, and our regulator, the Federal Energy Regulatory Commission (FERC). Just days before market simulation began, FERC issued three strong rulings supporting key elements of the market design – further validating the approach.
Market simulation is a critical step in the process. Think of it as a dress rehearsal where we test all of the programs, software and processes that reflect the market design we have spent the past several years working on with our stakeholders.
I am proud to report that our teams began market simulation smoothly and without issue.
For our customers in California and the West at large, beginning market simulation on time sends a clear signal that we are fully committed to meeting our milestones in a collaborative way that works for all participants.
Here is a list of some important objectives that we plan to achieve during our market simulation before moving to the next stage of parallel operations by mid-January 2026:
- Provide a hands-on environment to allow participants to interact with new and unique features and functionality to verify market concepts, design, commodity products and get familiar with market rules and timelines
- Establish confidence in operational processes and technology systems associated with the new market functionality implementation and market optimization algorithms, and recommend appropriate values for relevant market parameter configurations
- Verify the ISO bid-to-bill process and develop mitigation for identified issues before promoting to the live-system environment
- Help our customers test their internal systems and procedures in advance of live operation
- Provide transparency in reporting and presentation of information
- Establish clear communications and prompt messaging about every aspect of the project
- ... and much more
Launching EDAM affects nearly every part of the ISO, and we’ve built dedicated internal teams to keep all of our efforts coordinated. Evolving a market that works for all participants means staying flexible and listening closely, and adapting as needed. These early achievements reinforce the sense of collaboration that have made these first steps possible and will help us remain on track for market activation next spring.
