In April, WAPA team members coordinated and executed the “cutover” process to successfully transition DSW into the WEIM real-time market.

DSW powers forward into Western Energy Imbalance Market

At midnight on April 5, WAPA went live in the California Independent System Operator’s Western Energy Imbalance Market. Through this milestone, Desert Southwest and the Western Area Lower Colorado Balancing Authority began financially binding participation in the market.

Through multiple training sessions and a change management program specifically designed for WEIM, WAPA worked hard to prepare to enter this market.

With the help of consultant Utilicast and the CAISO, WAPA derived and executed a detailed plan for cutover. The plan identified staff who needed to be in DSW’s Operations Control Room working the Merchant real-time desk and individuals to have on the phone and on call.

The cutover plan allowed for WAPA to start small with base schedules submitted and reviewed in advance and with conservative bidding. DSW would make Energy Transfer System Resources available gradually to begin operations on a small scale and ensure things worked properly before participating more fully in the market.

Lingo lesson: Energy Transfer System Resources, or ETSRs, are energy resources that can be transferred between WEIM participants, allowing the market to optimize the energy mix. They are subject to tracking, tagging and settlement.

We’re doing it live

On April 4, CAISO opened a teleconferencing bridge at 9 p.m. for all new WEIM entrants. That way, as problems arose, the new participants would have CAISO staff available to help troubleshoot. Cutover began at 12 a.m. on April 5.

“In dispatch, lots of folks were really nervous. We weren’t sure if the limitation to the Energy Transfer System Resources would take, and we needed to open the ETSRs up slowly,” said Power System Dispatcher Stacy Russ.

When grid operators tried to gradually make system resources available to the market, dispatches to Hoover Dam fluctuated wildly.

“While we were able to cut over, we weren’t able to open the ETSRs right away, and Hoover had to be manually dispatched to meet the Dispatch Operating Targets for almost a week,” Russ said.

During the first week of market operations, WAPA experienced bumps in the road, but WAPA’s dedicated staff worked tirelessly to smooth them out. After the fact, DSW staff reviewed daily market operations to address and resolve issues.

“The first week of ‘go-live’ was a challenge and a learning experience, but the change to EIM also helped us identify long-standing issues and better understand our load,” Russ commented. “We are still grappling with issues and learning as we go.”

According to Supervisory Energy Management and Marketing Specialist John Paulsen, both CAISO and Utilicast said that for a balancing authority as complicated as WALC, it was amazing the cutover and continuing transition has gone so smoothly.

“This is a true testament to the dedication and hard work of our WAPA staff and our relationships with our customers and neighboring utilities,” Paulsen said.

The realities of entering a new market include:

  • The bulk of the organization will be in learning-mode.
  • There will be mistakes.
    • Some may be individual, while others may be multi-party.
    • Some may cost money; some may inadvertently benefit you.
  • All these things are normal.
  • There will be lessons learned.
  • There will be things not previously thought about.

WAPA staff have seen or are experiencing all the above.

Power System Dispatcher Stacy Russ and Daniel Cox from Utilicast worked into the early morning hours during DSW’s go-live into WEIM on April 5.
Power System Dispatcher Stacy Russ and Daniel Cox from Utilicast worked into the early morning hours during DSW’s go-live into WEIM on April 5. The move is already realizing financial benefits for WAPA and its customers.

Connecting for success

This important transition marks the culmination of nearly four years of work to prepare and integrate systems and lay foundations that resulted in successful implementation. DSW expects the move into the real-time market – where the lowest-cost energy from a wide range of generating entities is sold at five-minute intervals to accommodate for temporary shortfalls – to open opportunities for cost savings.

“A market participation benefit analysis performed by [Energy & Environmental Economics, Inc.] and a cost study performed by Utilicast rendered an estimated annual net benefit of $291,000 for WAPA and WALC customers participating in WEIM,” said Paulsen. “After several weeks of participation, we are experiencing opportunities we didn’t expect.”

“It is too soon to gauge the magnitude of these opportunities or if they are merely seasonal, but we have reason to be optimistic about our potential benefits going forward,” Paulsen added.

WAPA staff across multiple functional organizations remained committed to continuous customer engagement throughout the process to ensure customers’ needs were met.

“Going through the implementation process and getting to this point took a lot of hard work, dedication and determination from a lot of people,” said Senior Vice President and DSW Regional Manager Jack Murray in an email to staff. “This effort truly is a region-wide, and, in many ways, a WAPA-wide success, with significant contributions by every functional area.”

A diverse energy portfolio

Two other new participants joined the CAISO WEIM, expanding the market’s footprint in the Southwest: El Paso Electric in Texas and AVANGRID, a major natural gas, solar and wind energy company. When combined with DSW’s WALC BA, the WEIM now represents nearly 80% of the demand for electric power in the Western Interconnection.

The new participants further diversify the WEIM’s resources with WAPA’s federal hydropower and transmission services, EPE’s regional generation, transmission and distribution in west Texas and southern New Mexico, and AVANGRID’s renewable energy fleet in the region.

“Because of their varied resources and location, these new WEIM partners further strengthen regional collaboration and coordination in the West,” CAISO’s president and CEO Elliot Mainzer said in a statement. “It’s been a pleasure to work with them in support of their effort to achieve enhanced operational efficiencies while providing cost savings to their customers.”

Launched in 2014, WEIM’s large footprint and centrally coordinated marketplace provides reliability and environmental benefits. It creates efficiencies by locating, marketing and delivering energy to its members in real-time at the lowest cost available. Instead of shutting down wind and solar farms in times of oversupply, the market’s transmission providers move their low-cost renewable energy over greater distances – farther than traditional, bilateral trading partners could – to where it’s needed most.

Joining the WEIM enhances DSW’s real-time trading opportunities, provides efficient and affordable operations, and addresses BA limitations and constraints due to the loss of bilateral trading partners in an era of deregulated markets.

WAPA and its customers stand to benefit financially from the arrangement. According to CAISO, WEIM yielded $1 billion in benefits in 2022, increasing the total benefits since inception to more than $3.4 billion as new entities join up.

Laying the groundwork

In 2021, DSW signed an implementation agreement with CASIO to participate in the market starting in 2023. The decision emerged after nearly two years of analysis and collaboration with customers on the best path forward to manage real-time mismatches between supply and demand within the WALC BA.

“Joining the EIM will support DSW’s ability to economically market and dispatch energy on a timely basis and meet the needs of our customers,” WAPA Administrator and CEO Tracey A. LeBeau said at the time. “We look forward to working with the ISO and our partner utilities to implement the EIM in our balancing authority and take advantage of the many resources and flexibilities the EIM offers.”

On Nov. 3, 2022, DSW filed its adjusted Open Access Transmission Tariff with the Federal Energy Regulatory Commission. Prior to going live, DSW began parallel operations on Feb. 2 in preparation for the region’s transition into WEIM. Parallel operations and the minor rate adjustment process for WEIM participation were both completed shortly before going live.

Strategically powering forward into markets

This effort directly connects to WAPA’s strategic plan Power Forward 2030. Specifically, it supports the plan’s topline goal to “Modernize the Grid” and bolsters the strategic objective of “Prepare and adapt to a changing energy landscape.”

To stay competitive, WAPA continues to evolve with the broader energy ecosystem around it. Evaluating and selecting markets that make the most sense for each region and its customers represents a big part of that adaptation process.

Joining WEIM, in addition to WAPA’s other region-specific explorations of new market proposals, also fits well within Power Forward 2030’s Resource Stewardship perspective. The two strategic objectives of “Optimize investments in system reliability” and “Improve cost efficiency” reflect the overall aims of WEIM for its members as a whole and WAPA’s reasons for participating in the marketplace.

“For DSW, our ongoing market analysis is calibrated by our customers’ and neighbors’ activity,” said Paulsen. “We are in a good position to continue to look for opportunities as the market landscape evolves in the Southwest.”

Weighing market options

WAPA is also evaluating two different day-ahead market proposals that could lead to further cost savings.

On April 11, DSW executed an agreement with the Southwest Power Pool to participate in Phase One of their Markets+ development, its proposed day-ahead market.

“DSW exploring Markets+ will give us critical insights and understanding of the complexities of the proposed market as it develops,” said Vice President of Enterprise Portfolio Management Chrystal Dean. “Being at the table for these evaluations will help WAPA identify the best paths forward that protect the value of hydropower and transmission services for our customers.”

The entities exploring the Markets+ initiative are expected to commit $9.7 million collectively over 21 months to develop market protocols, tariff language and governing documents. Subject to FERC approval, SPP targets its Markets+ launch for 2026.

DSW is also actively monitoring the CAISO’s day-ahead market proposal dubbed the Extended Day-Ahead Market, an initiative that was jointly approved in February by the CAISO Board of Governors and the WEIM Governing Body, to better understand which day-ahead market construct will best serve DSW and its customers.

CAISO says the EDAM will benefit existing WEIM partners, which will have the opportunity to participate in the day-ahead market, where most energy transactions occur. Subject to FERC approval, CAISO expects its EDAM market to go live in 2024.

WAPA remains committed to fully analyzing, exploring and understanding these evolving market opportunities to make the best decisions based on WAPA’s core statutory mission, regional circumstances and customer needs.

More information on the effort is available at DSW’s Energy Imbalance Market Activities webpage. For more information on the two proposed day-ahead market designs, visit the SPP Markets+ and EDAM webpages.

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Last modified on June 12th, 2024