BPA updates its internal strategy to tackle emerging market developments.
“We are taking hold of the opportunity to help shape the long-term future program alternatives for the region, and potential ways for how the agency will continue to meet the region’s power and transmission needs."Russ Mantifel, Director of Market Initiatives, BPA
In 2014, the landscape of electricity markets in the Northwest changed when the California Indepenent System Operator and PacifiCorp launched the Western Energy Imbalance Market, a real-time market where transactions occur in five-minute increments. This marked a dramatic shift from the region’s business model of heavy-load/light-load and hourly transactions. Joining held the potential for financial benefits through inter-regional transfers across balancing authority areas and optimization of real-time, sub-hourly dispatches of resources.
As more entities joined the EIM, BPA’s business case for becoming a member grew stronger. Participation presented another way for BPA to monetize the carbon-free flexibility of the hydropower system and improve further integration of renewables. BPA finalized its decision to join the EIM on Sept. 27, 2021.
Projects and testing are underway to meet the May 3 go-live date at which time EIM will become a new avenue for BPA to market its federal hydropower and improve transmission operations. The work needed to join the EIM now makes up 17% of BPA’s grid modernization portfolio, which has been the agency’s main strategic focus.
The work leading up to a successful EIM implementation is happening in all corners of the agency and joining the market provides a new experience for BPA as a member of an organized market. While EIM implementation is BPA’s first step into a regional organized market, it may not be the last.
Several other efforts are underway to create further market alternatives in the region and recent conversations have spanned from CAISO building upon the EIM with their Extended Day Ahead Market initiative, to the development of an entirely new day-ahead and real-time market option in the west, such as Southwest Power Pool’s Markets+ initiative, to whether the west should coalesce around the development of a comprehensive approach to regional market and transmission governance.
Running parallel to the new market development work, the Western Power Pool is in the process of implementing a Western Resource Adequacy Program, with the goal of helping participating utilities ensure enough capacity is available to meet end user needs during times of peak load events. An important distinction of WRAP is that it is a regional program, not a market. In addition to the standalone benefits of a resource adequacy program, its objectives are foundational to maximizing efficiencies and achieving operational savings within the markets that are also occurring in the same region. Last year, BPA made a commitment to participate in the WRAP’s non-binding phase of the program, which is one of the agency’s top priorities alongside EIM Implementation.
“We are taking hold of the opportunity to help shape the long-term future program alternatives for the region, and potential ways for how the agency will continue to meet the region’s power and transmission needs,” said Russ Mantifel, director of Market Initiatives. “Our teams are prepared to engage in the challenging work of regional and market initiative development to collaboratively build approaches that provide benefits to Bonneville and the entire Pacific Northwest.”
BPA is taking an active role in the development of these initiatives. BPA’s engagement includes:
- Participating in the CAISO and SPP stakeholder processes regarding market development and WPP’s process for continued WRAP development.
- Ensuring communication with BPA’s customers, stakeholders and sovereigns with respect to BPA’s engagement on new regional and market initiatives.
- Setting up the strategy in support of BPA’s work on regional and market initiatives to be nimble, adaptable and ensure it remains effective as regional direction evolves.
The new regional and market development initiatives reflect the rapidly changing energy landscape that BPA and our customers are facing. While BPA’s methods to continue delivering reliable, affordable and carbon-free hydropower to communities across the Pacific Northwest are evolving with EIM and have the potential for further growth with other regional and market developments, BPA’s objectives and obligations remain constant. At its core, BPA is charged with responsible stewardship of the Federal Columbia River Power System to ensure an adequate, efficient, economical and reliable power supply in the Pacific Northwest.
The United States and Canada will hold the eleventh round of negotiations to modernize the Columbia River Treaty regime on December 9, 2021.
Meet the team that is creating BPA’s Western Energy Imbalance Market settlements capability and preparing the agency to meet future business demands.