Dive Brief:
- The recent creation of the Regional Organization for Western Energy and the impending launch of the Extended Day-Ahead Market are prompting western utilities to explore greater integration, including a proposed regional resource adequacy program, according to participants at a Monday forum hosted by the California Independent System Operator.
- ROWE is scheduled to go live in 2028, at which point it will take over managing both EDAM and the Western Energy Imbalance Market from CAISO.
- Western utilities including PacifiCorp and NV Energy outlined the preliminary proposal in a March 7 letter to the Western Energy Market’s Body of State Regulators. But Kalia Savage, a principal transmission and market policy analyst with Portland General Electric, as well as CAISO’s liaison to the energy imbalance market entities, warned CAISO to “remain mindful of stakeholder bandwidth ... given the number of complex initiatives underway.”
Dive Insight:
“When it comes to prioritizing existing roadmap initiatives, the dominant theme was that EDAM implementation must come first,” Savage said. “Stakeholders strongly emphasized prioritizing EDAM-related enhancements, including congestion revenue allocation and other targeted refinements to address implementation issues, reduce operational friction and support reliable and efficient participation as EDAM and [Day-Ahead Market Enhancements] mature.”
Proponents of the resource adequacy program emphasized that it was still in the early stages of discussion. The March 7 letter said they intended to release a draft design for a market-integrated solution in April and launch an “open transitional stakeholder process” to refine the program.
Ben Faulkinberry, a senior power marketer and originator at PacifiCorp who presented the proposal on behalf of the utilities involved, said that the conversation about a new resource adequacy program started “amongst some of the EDAM and EDAM-leaning entities” who envisioned a program footprint that could “span from the Pacific Northwest to the upper Rockies down to New Mexico and back over to Southern California, not to forget Northern California.”
A study that came out last fall showed “potential real load and resource diversity savings within the non-CAISO EDAM footprint — or, I should be careful to say, a potential non-CAISO EDAM footprint,” he said.
“Our intention was never to come out of the door with a fully-baked, fully-designed program,” Faulkinberry added. “Our mission has been to come out the gate with a draft design document, which is something that we're aiming to have for you all to review next month.”
Jon Olson, director of energy trading, contracts and market policy at Sacramento Municipal Utility District, who is also involved in the effort, said the group intends for ROWE to eventually take over running the program and “to keep all of us involved.”
“The voluntary offering is really the fail-safe in this whole thing,” he said. “If all of a sudden this program doesn't work, you can always take yourself out.”
The forum also focused on how the success of the EDAM can be tracked and assessed once it launches May 1, and how much stakeholder input should be solicited on these new initiatives as they’re planned or launched.
Anna McKenna, vice president of market design and analysis for the California Independent System Operator, said that once the EDAM launches, CAISO will be “spending a lot of time evaluating [its] performance” and providing monthly reports as the launch marks a “very important, significant market design change.”
PG&E is proposing that in 2028, after EDAM has been established for some time, there should be a “holistic” assessment of the its operation and performance with an opportunity for stakeholders to discuss its success and operational viability, said Jonathan Rumble, a principal manager for Southern California Edison and the participating transmission owner sector liaison for CAISO.
That process would evaluate whether EDAM is doing what it was intended to do, rather than “making little changes here and there just to make EDAM work better,” said Rumble.
Rahul Kalaskar, senior director of regulatory affairs at The AES Corporation and one of CAISO’s liaisions to the independent power producers and marketers sector, said that his sector had a “fairly robust set of submissions” for CAISO’s Policy Initiatives Catalog and Roadmap this year — including a proposal to extend CAISO-style economic intertie bidding to “all non-CAISO EDAM BAA external interties, enabling bilateral, non-resource specific, hourly firm, imports and exports at market prices.”
“EDAM goes live on May 1, and the sector's view is that sufficient operating data should be available by the end of 2026, and that should provide enough opportunity to address this in 2027,” Kalaskar said.
Kalaskar also noted that some market interface seams, such as bilateral market load-serving entities not being able to “participate economically at the organized market boundaries,” are problems that will “compound” as the Southwest Power Pool’s Markets+ goes live in October 2027.
