NV Energy is the latest utility in the West to express interest in joining California ISO’s extended-day ahead (EDAM) electricity market. NV Energy’s intention was disclosed in the utility’s filing on May 31 of its triennial integrated resource plan to the Public Utilities Commission of Nevada.
NV Energy announcement follows notices of intent to join CAISO’s EDAM from Idaho Power, Portland General Electric, PacifiCorp, Balancing Authority of Northern California, and LADWP. That footprint was a main draw for NV Energy, which valued the regional interconnectivity and access to diverse resources, CAISO said in a press release.
The EDAM, a voluntary day-ahead electricity market, is designed to deliver reliability, economic, and environmental benefits to balancing areas and utilities throughout the West. NV Energy has been participating in the WEIM since December 2015, realizing $488 million in cumulative benefits to its customers.
Since its launch in 2014, the WEIM has produced $5.5 billion in economic efficiencies and enhanced reliability by leveraging transmission connectivity and resource diversity across a broad geographical footprint covering 22 entities in 11 states. EDAM, scheduled to launch in 2026, would build on that success by expanding into the day-ahead market where most energy transactions occur, unlocking greater value and efficiencies. The Federal Energy Regulatory Commission accepted changes to the CAISO tariff to enable the launch of EDAM in January.
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Cost-benefit analysis research commissioned by PGE concluded that EDAM is likely to provide a greater economic benefit compared to alternative market options. By joining the EDAM, PGE anticipates gross cost savings between $6 million and $18 million annually based on current modeling, depending on the final number of EDAM participants.
Last year, CAISO released a report on the potential benefits of expanded regional cooperation with California. The report evaluated and synthesizes recent studies on the impact of regionalization on transmission costs and reliability for California ratepayers. The report also discussed regional transmission organization efforts in Colorado and Nevada, as well as “other regional collaboration between states on energy policies to maximize consumer savings while respecting state policy autonomy, and engagement between neighboring states on the future of regional transmission organizations in the West.”
A multistate study cited in the report estimates that a West-wide market operated by a regional transmission organization (RTO) would provide significantly more benefits than centralized day-ahead markets alone and produce $833 million in annual savings through reduced electricity production costs. The report also found that while several market design issues need attention, additional benefits such as greater transparency, increased stakeholder participation, and more efficient transmission utilization can be achieved through expanded regional coordination.
In 2020, the Western Electricity Coordinating Council (WECC) released a report examining the reliability implications of expanding the EIM to include day-ahead market services. WECC determined that the potential reliability benefits of EIM + DAMS fall into three general themes: coordination
across a broad footprint; uniform application of market tools; and enhanced ability to manage
variability.
Potential risks, on the other hand, include increased operational complexity and reduced bilateral market liquidity. Additionally, WECC argued that if electricity optimization and gas trading take place on different schedules in the day-ahead market, participants may need to modify their operational practices and risk assessment tools to accommodate, as there would be a potential for fuel-under procurement affecting market participation and reliability.
