In a little-noticed move that has big potential to advance clean energy and strengthen the western power grid, Idaho Power has signed onto a California-based energy market that will better balance the needs of participating utilities across the West.
Idaho Power signed an agreement on April 6 with what’s known as the California Independent System Operator (ISO, also known as “CAISO”), which is a regional collaborative designed to make it faster and more efficient for utilities to trade electricity in a far shorter time frame than the old hour-long utility trading blocks of the past.
It’s a complex grid-wide utility system, but at its simplest it takes advantage of important technology advancements that enable utilities to more effectively trade with each other. Among the major benefits is a greater ability for utilities to trade “intermittent” forms of electricity such as wind and solar power that may be abundant in certain times and locations and less so in others. So, for instance, if Idaho Power were to find itself with surplus wind or solar power at a given moment in time, but a utility in California or Oregon needs that power on short notice, the CAISO system facilitates the exchanges in electricity and the renewable energy finds a home where previously it might not have.
It’s called an “energy imbalance market” (EIM), and it’s a big step in improving grid operations and the ability to integrate even more intermittent renewable energy onto our power systems. Rather than utilities trading with each other in more bulky hour-long blocks, this EIM allows trading in sub-hourly time frames, allowing utilities to more deftly adapt to immediate changes in the amounts of energy their renewable power suppliers produce.
“We are looking forward to participating in the western EIM,” Idaho Power Senior Vice President of Operations Lisa Grow said in announcing her company’s agreement with the CAISO. “We believe it will facilitate increased reliability for the electric system and anticipate economic savings to our customers through lower production costs.”
Grow said Idaho Power will work with a new EIM governing body that will balance the interests of participating utilities and regions across the market. The Idaho Public Utilities Commission will also need to bless the arrangement, although it is on record as endorsing the idea.
When Idaho Power filed its every-other-year 2015 “Integrated Resource Plan” (IRP) with the Idaho regulators last year, it said it was pursuing this kind of an EIM arrangement. The Snake River Alliance, which has long participated as a member of Idaho Power’s IRP Advisory Committee that works with the utility on the IRP, urged the PUC in our IRP comments that the Commission recommend Idaho Power pursue an EIM arrangement such as this.
Idaho Power has been investigating possible participation in a Northwest EIM, but those efforts didn’t pan out for a number of reasons. The California-based EIM made more sense in part because Idaho Power’s collaborating utility partners, such as CAISO charter member PacifiCorp (Rocky Mountain Power in Idaho) were already participating in that EIM.
When it acknowledged Idaho Power’s 2015 Integrated Resource Plan, the Idaho PUC said it would be “appropriate” for Idaho Power to continue to update its stakeholders about participating in an EIM. The PUC order also referred to the Alliance’s comments:
“SRA would like the Company to supply additional information on its plans for possibly participating in a western EIM. In reply, the Company noted that in September 2015 it announced its withdrawal from Northwest Power Pool’s effort to establish an EIM, and its corresponding plans to study the costs and benefits of participating in the CAL-ISO EIM. The Company stated that it expects to finalize its decision about the Cal-ISO EIM in 2016.”
In its statement on the new Idaho Power partnership, the California ISO said, “Clearly, the EIM is seen as a viable tool for many utilities interested in creating more efficiencies in the real-time market and capturing tangible savings for their customers. We are anxious to assist Idaho Power as they explore EIM and help them transition seamlessly into our real-time market.”
The CAISO describes its EIM as “an automated, real-time energy wholesale market that matches the lowest cost electricity supply with demand every 15 minutes and dispatches every 5 minutes. This flexibility provides more opportunities to integrate cleaner sources of energy, such as wind and solar, that may be produced in one area but needed in another. This regional approach reduces the costs for all electricity production in the EIM, which currently operates in California, Oregon, Washington, Utah, Wyoming and, later this year, Nevada.” Now Idaho will join that list.
“We believe that Idaho Power joining the western EIM will prove to be a significantly positive move for the utility and its customers, along with current market participants,” CAISO President and CEO Steve Berberich said. “The market already has proven itself to increase network efficiency, lower costs, and encourage cleaner energy into the power grid. With each new entrant, the market will only multiply those benefits.”