Basin Electric an inaugural participant in new electricity market

(Feb. 3, 2021) — Basin Electric was an inaugural participant in Southwest Power Pool’s (SPP) Western Energy Imbalance Services (WEIS) market, which was launched at midnight Feb. 1.

The real-time balancing market is the latest of SPP’s contract-based Western Energy Services to be implemented in the Western Interconnection and is expected to lower wholesale electricity costs, increase price transparency, and mitigate congestion on the transmission system for market participants.

“An imbalance market provides the ability to  sell  unscheduled generation to others via economic market dispatch and the ability to purchase more economic generation from others via economic market dispatch to meet  sales and load obligations,” said Valerie Weigel, Basin Electric director of asset management and commodity strategy. “We have been live in the WEIS Market for just a few days and thus far have seen our units provide generation to others via SPP’s economic market dispatch at a margin.”

“This is an exciting step for SPP and our new market participants in the west,” said Barbara Sugg, SPP president and CEO. “Our electricity markets have played a big role in lowering costs, integrating renewables, and enhancing reliability in the east, and we’re excited to see a new part of the country begin to see similar benefits. I’m hopeful this is just the beginning of valuable partnerships between SPP and western utilities that will help them and the customers they serve meet their financial, reliability, and renewable energy goals.”

Basin Electric is one of seven regional utilities participating in the market. The other participants are Basin Electric Class A member Tri-State Generation and Transmission Association, the Western Area Power Administration (WAPA), Deseret Power Electric Cooperative, and the Municipal Energy Agency of Nebraska (MEAN).

As the WEIS market’s administrator, SPP will support the reliability of the region’s transmission system and meet demand with the most cost-effective generation available, reducing wholesale electricity costs for participants. Like SPP’s previous markets, the WEIS will provide price transparency of wholesale energy, allow parties to trade bilaterally, and hedge against costly transmission congestion.

SPP currently holds the record for the highest one-hour and point-in-time wind penetration ever recorded by the Energy Information Administration. It recently set an SPP wind peak record of 19,848 megawatts on Jan. 14 and was the first U.S. regional transmission organization (RTO) to see wind as its main fuel source in 2020. SPP’s existing markets and other services, like transmission planning and balancing authority administration, have been credited with helping the SPP RTO achieve such a high degree of reliable wind integration.

Looking ahead, many of the WEIS participants are now evaluating membership in a full western SPP RTO. A 2020 SPP Brattle study found RTO membership could produce an annual savings of $49 million for both SPP and western entities. If Basin Electric, MEAN, Tri-State, and WAPA pursue membership in SPP’s western RTO, SPP can extend the reach and value of its services and the synergies they provide when bundled under the RTO structure.

“The startup of the energy imbalance market by SPP in the western interconnection is exciting,” said Paul Sukut, Basin Electric CEO and general manager. “Coupled with SPP’s proven stakeholder process, success in operating markets, and providing reliability coordination services gives us the reliability and economics in the near term and for the longer term also provides a realistic pathway to a full RTO in the western interconnection.”

Source: Basin Electric Power Cooperative

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