by Sheryl Hamlin
The Arizona Corporation Commission (AZCC) invited CAISO (California Independent System Operator) to present the evolving regional energy market, specifically its governance, and to explain the 2020 rolling blackouts in California. Below are some of the highlights. The full video is available here.
Chair Márquez Peterson (bio here) posed an important question to all participants: how will it benefit Arizona to participate in the regional market without transparent broad governance?
Mark Rothleder, SVP and COO, presented at a high level the Western Energy Imbalance Market (WEIM) and the EDAM (Extended Day Ahead Market).
The image below shows the active WEIM participants and other peripheral participants.
Mr. Rothleder explained that EIM moving to EDAM is a pathway to RTO. What this sentence of acronyms implies is that as technology allows trading in an orderly market to move energy in real-time, there will also be the ability to predict and order energy up to 24 hours in advance energy needs, thus evolving into a fully functioning Regional Transmission Organization.
Source:CAISO
Mr Rothleger showed the following image which represents the beneficiaries of the market. The turquoise is CAISO. Chair Márquez Peterson noted that California has been the recipient of more than 50% of the benefits. Does this mean, she asked, if California does not have resource adequacy?
Source:CAISO
Mr. Rothleder responded saying that since 2020, 600 MW has been added with another 8000 MW requested as California transfers to more and more electric energy.
Energy Imbalance Market
Commissioner Olson asked what happened in the event some member does not have enough resources for the demand.
Mr. Rothleder stated there is a consequence for non-performance. The are migrating to an economic surcharge per transaction in the event of a failed transaction.
Market Governance
Stacey Crowley spoke to market governance saying that part of the model includes dispute resolution via a RIF (Regional Issues Forum).
EDAM (Extended Day Ahead Market)
The Chair asked about EDAM tariffs. The answer included volumes and carryovers, but must also include GHG rules, because come areas have different policies for GHG (greenhouse gases). Commissioner Olson asked about legislation for EDAM. CAISO responded that legislation is not needed because the board was able to delegate to a new authority.
Local participants APS (Arizona Public Service), SRP (Salt River Project), TEC (Tucson Electric) and AEPCO (Arizona Electric Power Cooperative) spoke about smooth transition, but had transmission wheel through concerns. Read about wheel through here which is the process of transportation of energy from within the grid to outside the grid.
September 6, 2022 Near Meltdown in California
Mr. Rothleder explained that on this day the California demand was 52,061 MW, an all time high. Fortunately it was a moderately hot day in Arizona of about 107 to 108 degrees. Chair Márquez Peterson noted that California would have been in dire straits without Arizona power. He said that the issue was elevated to the governor′s office, asking for load relief, more capacity and dispatchable energy. CPUC (California Public Utilities Commision) actively involved too. Commissioner Kennedy asked about the price of $1000/MW which some Arizona utilities received for this emergency power. Those utilities selling the power said that they did not profit, because as a non-profit, the monies received all go back to the ratepayers. Read CNBC coverage here.
Issues Not Discussed at the Meeting
This entire discussion, particular the EDAM discussion, had the eerie resemblance to the 2000-2001 California Energy Crisis which came about through an energy trading system.
There was no discussion about software. Who wrote the software, where is it housed, who maintains the software, what security is involved? The CAISO speakers mentioned calling people, but it is impossible to think of thousands of trades all transacted telephonically.
Watch the vide for the full interaction and slides. Video link
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