Southwest Power Pool Proposes Rival to Western Energy Market

The Southwest Power Pool Inc., the grid operator for 14 states in the central U.S., unveiled a proposal for a Western Energy Imbalance Service market designed to balance generation and load regionally and in real time. The market aims to create opportunities for participants to utilize diverse generating resources, optimize their use of the transmission system and lower costs to their end-use customers.

The proposed market will compete with California Independent System Operator Corporation’s Western Energy Imbalance Market, or EIM, which has continued to expand since its launch in November 2014. The EIM, which has eight participants with six more expected to join by 2022, is an automated system that secures the lowest-cost energy to serve real-time customer demand over a broad region spanning across multiple western states. The market also supports integrating renewable resources, making excess renewable energy available to participating utilities at low cost rather than turning off the generating facilities. CAISO reported in April that its EIM has generated savings of over $650 million since its launch.

SPP’s imbalance market will be administered as a contract service, meaning that participating utilities do not have to be members of the SPP regional transmission organization. SPP said that the new service adds to its portfolio of contract-based products. The grid operator also administers the Western Interconnection Unscheduled Flow Mitigation Plan and expects to launch reliability coordination services for several western utilities in December. Further, the RTO is in the process of developing planning coordination services, which would help utilities plan upgrades to the region’s transmission system.

SPP expects to launch the market on Dec. 1, 2020 assuming it has enough customer contracts in place by Aug. 1 to ensure adequate funds to meet the implementation costs.