Wednesday, January 23, 2019

EIM Benefits Surge to $71.2M in Q2

By Robert Mullin

The Western Energy Imbalance Market saw financial benefits soar to a record $71.2 million in the second quarter on surging exports of low-priced solar generation from California and the addition of new members Idaho Power and Powerex, according to a report from market operator CAISO.

EIM CAISO Powerex Idaho Power earnings

CAISO earned the largest share of the EIM’s Q2 benefits on surging solar exports. | CAISO

Quarterly benefits were up more than 69% from the first quarter and 75% from the same period a year earlier. (See CAISO, PacifiCorp Gain Most EIM Q1 Benefits.) The EIM has yielded $401.7 million in gross benefits for its members since it began operation with PacifiCorp in November 2014, the ISO estimates.

The CAISO balancing area reaped $27.9 million in EIM benefits last quarter, with net exports exceeding 1.9 million MWh, nearly 10 times the volume of the next biggest exporters, NV Energy and Arizona Public Service.

“The second quarter of 2018 saw an uptick in energy moving out of California through the EIM, as the system experienced high levels of renewable production at a time in the season when temperatures are still cool and electric demand is moderate,” the ISO said in a statement.

PacifiCorp was the biggest beneficiary of CAISO’s renewable surpluses, importing nearly 1.1 million MWh of low-cost power over the quarter and earning $11.67 million in EIM benefits, the second-largest share among market members.

Trailing the two biggest earners were APS ($8.6 million), wind- and hydro-heavy Idaho Power ($7.8 million), NV Energy and Portland General Electric ($5.4 million each), Puget Sound Energy ($2.3 million) and Powerex ($2.3 million).

The report once again shows CAISO as a significant exporter of power during spring. The ISO said the EIM’s transfer capability allowed it to avoid curtailing 129,128 MWh of surplus renewable energy among its members during the quarter, up 93% from a year earlier. The avoided curtailments resulted in displacement of 55,267 metric tons of CO2 emissions and increased the volume of renewable energy credits, although the benefits calculation does not include the value of RECs, the ISO said.

The report also illustrated the extent to which certain EIM areas function as paths for wheel-through transfers, meaning the BA area is neither the source nor sink for large volumes of power. During the second quarter, the NV Energy and APS systems handled 828,282 MWh and 321,667 MWh of transfers between CAISO and the PacifiCorp-East (PACE) area, respectively, while the relatively small PacifiCorp-West system facilitated 386,788 MWh of north-south transfers among California, the Pacific Northwest and PACE. By comparison, just 127,205 MWh of energy were wheeled through CAISO over the period.

“As part of the EIM Consolidated Initiatives stakeholder process, the ISO committed to monitoring the wheel-through volumes to assess whether, after the addition of new EIM entities, there is a potential future need to pursue a market solution to address the equitable sharing of wheeling benefits,” the report notes.

A CAISO proposal to compensate EIM participants for wheel-through transfers last summer drew strong opposition from stakeholders concerned about the impact on the economic dispatch of generating resources. (See EIM Members Wary of Need for Wheeling Charge.)

The EIM’s gross benefits represent either cost savings for serving load or increased profits from merchant operations within the participating BAAs. The benefits calculation nets out inter-BAA transfers that were scheduled ahead of the EIM’s 15- and five-minute market runs to avoid attributing contracted flows to the market.

Idaho Power and Powerex began transacting in the EIM on April 5, days after the beginning of the second quarter. Sacramento Municipal Utilities District is slated to join the market in April 2019, followed by the Los Angeles Department of Water and Power, Salt River Project and Seattle City Light in April 2020.