FERC seeks answers to questions about operation of Energy Imbalance Market

In the wake of a summer technical conference with the California Independent System Operator (ISO), the Federal Energy Regulatory Commission (FERC) wants the ISO to address some problems with the new Energy Imbalance Market.

FERC issued a Sept. 24 “deficiency letter” to the California ISO (CAISO). FERC and CAISO are seeking to address issues behind price spikes observed in the PacifiCorp balancing authority area (BAA) after the launch of the EIM. PacifiCorp is part of Berkshire Hathaway Energy and the Berkshire Hathaway (NYSE: BRK.A, BRK.B) corporate parent.

“These ‘price spikes’ or ‘price excursions’ were not reflective of actual physical scarcity, but rather the inability of CAISO’s systems to see BAA operator actions taken enhancement will allow the EIM entity to identify capacity it deems necessary to reliably operate its system and deploy this capacity through the EIM to resolve power balance infeasibilities in its BAA, and simultaneously participate in congestion management,” FERC said in the letter.

According to CAISO, this will prevent infeasibilities that would otherwise arise without this visibility.

“Please be advised that the filing is deficient and the Commission requires additional information in order to process the filing,” FERC said. FERC asked that the complete responses be submitted within 30 days.

“Under CAISO’s proposal, it is optional for an EIM entity to identify all or a portion of its EIM Available Balancing Capacity,” FERC notes in the letter. “Please explain how the proposal ensures that CAISO’s systems are automatically informed of the full scope of available capacity if an EIM entity does not identify sufficient EIM Available Balancing Capacity,” FERC said.

The FERC letter to the California ISO was signed by FERC’s Director of its Division of Electric Power Steve Rodgers.  The case involves Docket No. ER15-861-003.

The EIM is an automated, real-time energy wholesale market designed to match the lowest cost electricity supply with demand every 15 minutes and dispatches every five 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 costs for all electricity production in the EIM, which currently operates in California, Oregon, Washington, Utah, Wyoming and, later this year, Nevada, the ISO has said.

California has one of the most ambitious renewable portfolio standards (RPS) and carbon control regimes in the nation.

The imbalance market started operating in October 2014.


About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.