Dive Brief:
- The California Independent System Operator is expecting a “very solid launch” for the May 1 kickoff of its Extended Day-Ahead Market, the first day-ahead market in the West, after several months of parallel operations which served as preparation, CAISO CEO Elliot Mainzer told Utility Dive.
- “I feel very, very good,” Mainzer said. “The reality is that when we go live, we will be entirely out of the simulation environment. Based on lessons learned from the [Western Energy Imbalance Market], and from our testing of EDAM, we are going to have a rapid response team in place to quickly address any issues that may arise.”
- Mike Wilding, vice president of energy supply management at PacifiCorp, said the utility – EDAM’s inaugural participant – knows challenges will arise “that we haven't anticipated,” but over 90 days of parallel operations, they were able to “gain the confidence the market is working as intended and as designed.”
Dive Insight:
CAISO began holding meetings to discuss the development of EDAM in 2019. The launch represents a significant step toward regional markets in the West, and is set to be followed by the launch of Southwest Power Pool’s competing Markets+, another day-ahead and real-time market for the region.
Wilding said that for PacifiCorp, the most significant difference between EDAM and Markets+ is the footprint of the former, which the utility feels is better equipped to serve its customers. There is existing transmission connectivity between PacifiCorp and CAISO, and the other entities that have committed to joining EDAM also deliver transmission connectivity as well as load and resource diversity, he said.
EDAM has evolved and improved over its 90 days of parallel operations, Wilding said. “As we've worked through the market, we've seen prices come out, and the price formation really met our expectations with the right price shape, with peaks in the morning, peaks in the afternoon.”
During parallel operations, CAISO was generating “day-ahead market results each day based on all available inputs and system processes,” the ISO said in a February presentation. These operations required all aspects of EDAM and Day-Ahead Market Enhancements “to function cohesively and in coordination.”
PacifiCorp will be joined in EDAM by Portland General Electric in October, and CAISO is already in the testing phase with PGE, Mainzer said. Entities including the Balancing Authority of Northern California, Public Service Company of New Mexico and Los Angeles Department of Water and Power will join next year.
Once EDAM goes live, CAISO will be keeping an eye on aspects of the market like price formation and the imbalance reserve product, Mainzer said.
“We've got our technical people, our customer service people, we’ll be able to take [customer inquiry, dispute and information] tickets. We'll have phone bridges,” he said.
Mainzer said that CAISO is planning to address the need for post-launch enhancements and refinements through a “robust stakeholder process,” while working with the newly established Regional Organization for Western Energy to evolve that process in preparation for ROWE taking over the governance of the WEIM and the EDAM in 2028.
“We will learn new things from the day-to-day operation of the [EDAM] that will create other opportunities and challenges that we will take on in a very collaborative fashion with the stakeholders, because their perspective and their hopes and aspirations for their customers are going to be the major driver of where the market goes in the years ahead,” he said.
Wilding said that the beginning of this week was “calm” as PacifiCorp went “pencils-down on all kinds of development and improvement through parallel ops.”
On Wednesday, the utility will cut over “its largest system to plug into EDAM to be ready for trading on April 30,” when bids will start to be submitted ahead of the market going live on May 1.
Around midnight between Thursday and Friday, PacifiCorp will be keeping a close eye on the “really critical” transition from WEIM’s base schedules to EDAM’s system, which does not support base scheduling, Wilding said.
In lieu of base scheduling, “resources must actively participate and be registered for both EDAM and WEIM, as day-ahead schedules create real-time obligation,” said energy data firm Yes Energy in a Tuesday blog post. “In all cases, resources must secure transmission to the EDAM boundary and will be subject to EDAM transmission access charges.”
Of “hundreds” of the EDAM features that were approved by the Federal Energy Regulatory Commission, one — a net export constraint for greenhouse gas accounting — was not ready to go live by May 1 and will take some additional time to launch, Mainzer said.
“We just didn't feel that the price formation and some of the results were 100% ready,” he said. “But I would say that the absolute vast majority of the features tested well, developed good results, and we're excited to get them into actual go-live operations this week.”
