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A 10-Day Odyssey

I’m on my way home from 10 straight days on the road. There were three panel discussions, several lunches, dinner meetings and seven different hotels. An EV trip from SFO to Folsom, down to San Jose and back to SFO; and five days in windowless conference rooms. There were also three airports and several Uber rides. There was the California CCA Annual Meeting, the Annual Meeting of the Electric Power Supply Association (EPSA) and the semi-annual meeting of state Western state energy officials. At the end, I felt a bit like Odysseus at the end of his long voyage home from the Trojan War. But I learned a lot.

Middle School Cafeteria or Rush Week?

Perhaps you have heard of the two competing offerings for day-ahead market platforms; CAISO's Extended Day-Ahead Market (EDAM) and SPP's Markets+. I have spent a great deal of time, as have WPTF consultants, on both of these offers. Meetings, Zoom meetings, and comments. At one time, Markets+ seemed to have all the momentum, then CAISO would announce the commitment of a new utility to EDAM. The discussion on who was ahead sometimes felt like I was 14 again and everyone was wondering who was sitting with whom.

The dynamic took a new turn recently when NV Energy released a comparative benefits study between joining Markets+ and EDAM conducted by the Brattle Group.  The study showed considerably more benefits of joining EDAM than Markets+ under the most likely scenarios. That, combined with Pathways' straw proposal for a “step wise” approach to changing governance to make EDAM membership more attractive in the first step. The second step would be to form a fully independent entity known as a “regional organization” that could offer RTO like functions.

The full explanation of the Pathways proposal can be found here (https://www.westernenergyboard.org/wwgpi/) but the net effect of these two recent developments appeared to make it likely that Nevada will join, PacifiCorp, Portland General, LADWP, and Balancing Area of Northern California in EDAM. Combine this with an announcement of Idaho Power “leaning” toward EDAM had the effect to offset the expected staff report from BPA indicating a preference for Markets+ that could be subject to future change.

Resource Adequacy: Load expectations hit a “hockey stick” slope.

About 6 weeks ago, there arose a din of discussion on vast increases in load expected as a result of data centers and uses of Artificial Intelligence (AI). It really seemed to come suddenly, just as a discussion in conferences which would lead to more conversation of how difficult it would be to meet this new load. Large energy buyers like Microsoft, Amazon, Meta and developers working to get their business were everywhere and mainstream media was breathlessly writing about this newly identified trend.

Then a few days ago, the Western Power Pool, which administers the new Western Resource Adequacy Program (WRAP), announced that several participating utilities had updated their forecasts and indicated that they could not commit to the “binding” showing of Resource Adequacy (RA) to meet obligations in 2026. This meant that WRAP would not be in a “binding” phase over the covered region until 2027. While Western Power Pool noted that this gave urgency to efforts to meet a “binding” obligation, it gave additional urgency to the discussion as state energy officials and regulators prepared to meet in Denver.

Meeting of the Clans… I mean, states.

CREPC (Committee on Regional Electric Power Cooperation) meets every six months and until the last few years, it was a fairly pro forma affair. The West is composed of so many unregulated entities (public ownership, federal, etc.) that a meeting of state energy officials and regulators had little ability or reason to forge deep regional efforts. But the onset of the Energy Imbalance Market (EIM) and the promise of greater regional market integration (witness EDAM and Markets+) began to give some greater purpose or “agency” to the CREPC gatherings.

This meeting was always anticipated to be a big show, given the market developments, the concern around retiring resources, and general reliability issues. All the drama around which market platform was gaining utility commitments was on display. Anything that touched the calculus of market development – including the Seams Study WPTF co-sponsored with the Public Generating Pool – was discussed. The Pathways was proposal under the microscope and whether it held promise to greatly change the selection dynamic.

What would the recent announcement of the delay of WRAP members to commit to “binding” RA do to this market discussion? Would it overwhelm the market discussion? or lend additional urgency to market formation, so that the existing transmission system could be optimized to move available resources (my preferred narrative)?

I could be guilty of some level of self-delusion, but I honestly believe that increased electric demand and RA deficiency was seen by most as a catalyst to get on with regional market integration, and to manage whatever seams between the two markets will exist. It would not be true to say there was no grumbling in some quarters about the operational limitations of new resources or concern by some that reliability efforts might slow adoption of cleaner resources. But the discussions seemed to focus on movement on all fronts and earnest support for getting markets going.

The Takeaway

At the end of the Odyssey, I came away with positive vibes about market integration. The unwelcome news about WRAP’s delay in getting to a “binding” showing by 2026 may have spurred a sense of urgency, given the promise of making better use of the transmission system through network dispatch. The tension of utility selection between EDAM and Markets+ was evident, but also seemed to underline a sense of anticipation that we are making some real progress toward a new future for the region.

I hope my sense of optimism will hold over the next several months when the shape of the Western Markets should take form. If true, the voyage to regional markets will have truly been Homeric in length.

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