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Expanded market agreement saves $1.5 million in power costs

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LAKEWOOD, Colorado –A pilot energy market agreement proves effective in just 10 months for Western Area Power Administration and its customers in California.

Northern California Power Agency, Silicon Valley Power and WAPA joined together last December to broker a Market Efficiency Enhancement Agreement with California Independent System Operator Corporation.

The agreement between the entities improved the locational pricing for hydropower WAPA imports to the CAISO market and opened the door for several additional WAPA customers who have since chosen to sign onto the agreement.

“Once WAPA saw the savings for the pilot agreement with NCPA and Silicon Valley, some of our other customers, like Eastside and the Department of Energy’s laboratories, decided to partner with us, too,” said WAPA Senior VP and Sierra Nevada Regional Manager Subhash Paluru. “In less than a year, those customers have, collectively, saved more than $1.5 million in energy costs. That is an incredible savings.”

Annually, WAPA’s Sierra Nevada region schedules an average of 700,000 megawatt-hours into the CAISO day-ahead market and an average of 230,000 MWhs of hydropower into the real-time CAISO market. This renewable, cost-based energy serves WAPA’s customers within CAISO’s footprint.

“Almost half of WAPA’s Sierra Nevada power is delivered to customers in the CAISO,” said VP of Power Marketing for WAPA’s Sierra Nevada region Sonja Anderson. “It is great to see these kinds of results so quickly. Collaborating with our customers and CAISO to deliver renewable hydropower at its proper value will ensure we can continue to provide reliable and clean energy.”

The agreement saves money by leveraging specific price locations rather than an aggregate price for WAPA to import energy to customers.

“All our customers, from California’s big cities to small towns and rural areas need reliable, renewable power. It is vital to our economy,” said Paluru. “This kind of mutually beneficial partnership and collaboration makes a difference for our shared energy goals and prepares us for the demands as the energy industry evolves.”

Helpful definitions:

A Balancing Authority is responsible for maintaining the electricity balance between the demand for energy and power generated to make sure they are equal across the transmission line and infrastructure within its area, and between neighboring balancing authorities. The California ISO and WAPA’s sub-balancing authority, underneath the ​Balancing Authority of Northern California, ensure the generation, transmission and distribution systems are all working reliably every hour to support California's energy needs.

Locational Marginal Pricing (i.e. Pricing Nodes) are specific locations on the transmission system for which California ISO calculates and publishes wholesale electricity prices. Location-specific pricing provides clear, accurate costs for moving electricity at every location within the balancing authority’s area.

About WAPA: Western Area Power Administration annually markets and transmits more than 25,000 gigawatt hours of clean, renewable power from 57​ hydroelectric powerplants owned and operated by the Bureau of Reclamation and the U.S. Army Corps of Engineers in 15 western and central states. It is part of the Department of Energy. Follow us on Twitter @WesternAreaPowr or visit the website at

Page Last Updated: 9/14/2020 11:44 AM