Western's merchant functions
Western operates three major (real-time) merchant desks. One, located in Watertown, S.D., serves the Upper Great Plains region. Another desk, located in Montrose, Colo., serves the Rocky Mountain region and the Colorado River Storage Project Management Center. The third desk, located in Phoenix, Ariz., serves Desert Southwest region.
UGP Energy Management and Marketing Office
The Energy Management and Marketing Office in Watertown makes surplus energy sales and purchases for the Pick Sloan Missouri Basin—Eastern Division. Watertown staff buy and sell energy on the open market because the Missouri River system cycles through low-water years and high water years. UGP has a marketing plan that markets firm energy on an average water year basis. UGP staff also market a large amount of surplus energy through the Joint Marketing Program. Surplus energy is produced by customer-owned thermal generation units and other Joint Marketing Program participants.
CRSP Energy Management and Marketing Office
The CRSP Energy Management and Marketing Office in Montrose makes surplus energy sales and purchases for the CRSP Management Center and the Desert Southwest and Rocky Mountain regions. Merchant staff also determine the best load and resource pattern for the entire Salt Lake City Area/Integrated Projects and Loveland Area Projects. The SLCA/IP has heavy purchase power requirements because of environmental release restrictions below Glen Canyon Dam—one of four major storage units of the CRSP.
(Note: The Sierra Nevada Region typically makes energy purchases but very few surplus sales. The purchases are handled through long-term purchases or pre-scheduling purchases from other utilities.)
How the merchant offices operate
The players in the market place:
Players in the marketplace include utilities, independent power producers and power marketers. Western’s marketers negotiate, develop and administer contracts for sale, interchange and purchase of power and energy, ancillary services and for system interconnection. They also record all transactions for sales or purchases of power and energy. They provide accurate scheduling and/or accounting data to power billing.
Western employs marketers in two roles:
Pre-scheduling marketers pattern generation resources, including weekly, monthly and seasonal projections, to support firm power contracts (to match hydro and thermal resources to system load requirements). They forecast system loads and resources to schedule generation based on generation schedules, hydro release criteria, thermal operating criteria, anticipated firm loads and surplus sales for the day. They sell surplus resources and look for “opportunity transactions”—purchases for resale.