CEBA Welcomes Federal Approval of Western Day-Ahead Energy Market Tariff

Expanded Market Will Improve Reliability and Bring Cost Savings for Customers

The Clean Energy Buyers Association today praised the Federal Energy Regulatory Commission’s (FERC’s) acceptance of tariff changes that will enable commencement of the California Independent System Operator’s (CAISO’s) day-ahead energy market for Western Energy Imbalance Market (WEIM) participants.

“Well-designed day-ahead market services will improve reliability through enhanced regional coordination, bring more clean energy onto the grid, and save customers hundreds of millions of dollars annually,” said Heidi Ratz, CEBA’s deputy director of market and policy innovation for the West. “We are glad FERC’s approval of CAISO’s requested tariff changes will enable the important benefits the Extended Day-Ahead Market will bring.”

The Extended Day-Ahead Market (EDAM) would improve efficiency by integrating renewable resources using day-ahead unit commitment and scheduling across a larger area. CAISO aims to begin the voluntary day-ahead market as early as 2024.

The CAISO EDAM process began in October 2019, and the CAISO and WEIM boards this past February approved the final proposal to offer day-ahead energy market services to WEIM participants. Significant stakeholder engagement ensured the proposal addressed critical issues including transmission availability and pricing, resource sufficiency needs and criteria, pricing of resources, and market governance.

PacifiCorp has already announced plans to join the EDAM, and an April 2023 Brattle study found PacifiCorp and all of the other assumed EDAM participants would benefit from the day-ahead market, with over $800 million in annual cost savings to EDAM participants and net benefits of over $430 million.

According to a November 2022 study conducted for CAISO by Energy Strategies, a Western day-ahead market could save the region up to $1.2 billion a year from operational and capacity efficiencies while increasing renewable energy output by more than 1,800 gigawatt hours. A 2021 Western state-led study released by the U.S. Department of Energy also found that a full West-wide regional transmission organization (RTO) would increase annual benefits up to $2 billion.

CAISO’s EDAM offers one Western market option, and Southwest Power Pool’s (SPP’s)  Markets+ proposal would provide another Western day-ahead market and related services. The SPP Markets+ proposal also is anticipated to bring economic benefits; a 2020 Brattle Group study found that a SPP Western RTO would create benefits of $25 million per year for SPP’s Western Energy Imbalance Service Market members.