California ISO signs western EIM implementation agreement with PNM

The California ISO on Dec. 20 said that it and Public Service Company of New Mexico (PNM) have signed a western Energy Imbalance Market (EIM) implementation agreement that will be filed at FERC in January 2019 regarding PNM’s plans to join the EIM in April 2021.

“We welcome PNM’s participation in the Western EIM,” ISO President and CEO Steve Berberich said in the statement. “For current EIM participants, the real-time market has generated a half billion dollars in benefits since its launch almost four years ago; PNM’s participation will only add to the market’s efficiency and diversity.”

PNM manages about 2,580 MW of generation, including 800 MW of low- or zero-carbon resources including wind, solar, geothermal, and nuclear, the ISO said.

PNM, in a separate Dec. 20 statement, said that the New Mexico Public Regulation Commission on Dec. 19 unanimously approved an order that governs the accounting treatment for costs related to joining the EIM. PNM said that it expects to seek recovery for those costs in future general rate cases, as the benefits from participation will reduce costs for customers under the existing fuel and purchase power clause.

Through coordination with other EIM members, PNM will be able to facilitate greater utilization of renewable resources in New Mexico, the company said, noting that when renewable energy production on its system exceeds the amounts needed by its customers, PNM will be able to sell that excess energy to other EIM members and reduce customer costs by the amount of those sales.

PNM also noted that the commission on Nov. 29 granted unanimous approval of the company’s Renewable Energy Act Plan, incorporating previously approved wind, solar, and geothermal energy additions into customer rates. Those renewable additions, which include 50 MW of solar facilities built this year, contribute to the 874 MW of existing and approved solar, wind, and geothermal resources that PNM has planned to serve customers in 2021, PNM said.

The ISO, in its statement, noted that the western EIM uses technology to automatically find and deliver the lowest cost energy to more than 42 million consumers in eight western states, and extending to the border with Canada.

As of September, the western EIM has produced more than $500m in total gross cost benefits to participants since the ISO launched it in November 2014, the ISO noted.

Current EIM participants include PacifiCorp, NV Energy, Arizona Public Service, Puget Sound Energy, Portland General Electric, Idaho Power, and Powerex. The ISO added that other entities scheduled to begin participation include the Balancing Authority of Northern California/Sacramento Municipal Utility District (2019); Seattle City Light (2020); Los Angeles Department of Water and Power (2020); Salt River Project (2020); and Northwestern Energy (2021).

According to the Oct. 29 “Western EIM Benefits Report” for 3Q18, the 3Q18 gross benefits by participant totaled about $100.6m – that is:

  • ISO – about $21m
  • Arizona Public Service – about $20.8m
  • PacifiCorp – about $17.8m
  • Idaho Power – about $13.3m
  • NV Energy – about $11.1m
  • Portland General Electric – about $9.5m
  • Puget Sound Energy – about $4.4m
  • Powerex – about $2.7m

The report noted that the benefits in 3Q18 were higher than usual due to more economical transfers in periods of high loads and higher electric prices following higher fuel prices. That was mainly observed in July and August, the report said, adding that the estimated benefits dropped in September to typical ranges tracking lower load levels and fuel prices.

A significant contributor to EIM benefits is transfers across balancing areas, providing access to lower cost supply, while factoring in the cost of compliance with greenhouse gas emissions regulations when energy is transferred into the ISO, the report said. As such, the transfer volumes are a good indicator of a portion of the benefits attributed to the EIM, the report noted, adding that transfers can take place in the fifteen-minute market and real-time dispatch (RTD).

Generally, transfer limits are based on transmission and interchange rights that participating balancing authority areas make available to the EIM, with the exception of the PacifiCorp West-ISO transfer limit and the Portland General Electric-ISO transfer limit in RTD, the report said.

The EIM benefit calculation includes the economic benefits that can be attributed to avoided renewable curtailment within the ISO footprint, the report said, adding that under the assumption that avoided renewable curtailments displace production from other resources at a default emission rate of 0.428 metric tons CO2/MWh, avoided curtailments displaced an estimated 8,146 metric tons of CO2 for 3Q18.

Among other things, the report said that growing participation in the western EIM demonstrates that utilities can realize cost benefits and reduced carbon emissions with increased coordination and optimization in the west.

About Corina Rivera-Linares 3058 Articles
Corina Rivera-Linares, chief editor for TransmissionHub, has covered the U.S. power industry for the past 15 years. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines. She can be reached at clinares@endeavorb2b.com.