The extreme cold that blanketed the Pacific Northwest and the northern Rocky Mountain states in mid-January demonstrated the benefits of the Western Energy Imbalance Market, according to a report from the California Independent System Operator.
The CAISO report, Winter Conditions Report for January 2024, noted that many areas in the Pacific Northwest and the Rocky Mountain States experienced temperatures 20 to 40 degrees below normal during the Martin Luther King Jr. Day weekend, January 13 to 15. The conditions prompted balancing authorities in the Pacific Northwest to issue eight energy emergency alerts.
But, as conditions evolved over the weekend, the Western Energy Imbalance Market rebalanced supply across the West to meet increasing demand. “The market identified least-cost solutions within the wider WEIM footprint, transferring lower-cost electricity from the Southwest into California” and that “allowed exports scheduled in the day-ahead and hour-ahead markets to flow to the Northwest, replacing more expensive generation while managing congestion on key transmission lines,” according to the CAISO report.
Hourly intertie exports in the day-ahead and real-time markets increased significantly, exceeding 6,000 megawatts, CAISO reported. Additionally, the ISO said up to 300 MW of low-priority wheel-through power were transferred from south to north on the CAISO grid.
The WEIM also facilitated six northern balancing authority areas to access assistance energy transfers that allowed them to receive energy transfers when they could not meet their own resource sufficiency requirements, CAISO said.
However, the CAISO report noted that transmission issues limited the volume of exports to the Pacific Northwest. No exports could flow on the Nevada-Oregon Border intertie because of a forced outage on the high-voltage lines, which transfer electricity from the Desert Southwest to the Pacific Northwest, and severe weather caused transmission outages in Oregon, resulting in congestion at the Malin intertie in southern Oregon, CAISO noted, adding that internal transmission constraints in California further limited the ability to move power northward.
Congestion at the Malin intertie resulted in $125 million in congestion rents in the day-ahead market, CAISO said. Those rents are distributed to holders of congestion revenue rights, which are available to all market participants, including load-serving entities in the Pacific Northwest.
Before January, market participants bought more than 900 MW of congestion revenue rights in anticipation of potential northbound congestion. None of the rights were held by external load serving entities, such as Northwest utilities, although they could have obtained them through CAISO’s CRR auction or the allocation process that provides CRRs for free to qualifying load serving entities, CAISO said.
CAISO noted that it is the only balancing authority in the West that manages transmission congestion through electricity prices at specific locations in its day-ahead market and that operators of transmission lines in the Pacific Northwest do not use similar market mechanisms in the day-ahead timeframe.
CAISO, in the report, said its Extended Day-Ahead Market, which was approved by the Federal Energy Regulatory Commission in December and is scheduled to be implemented in 2026, would provide additional mechanisms for managing congestion on either side of balancing area borders for participating entities, and provide transparency on the distribution of congestion revenues collected through nodal pricing.
