Western EIM Delivers Major Benefits

As 2017 ramps into full gear and we start to see 2016 year-end reporting from major industry entities, it is clear that the western Energy Imbalance Market (EIM) is delivering major benefits to its participants. In fact, according to California Independent System Operator’s (CAISO) January 30 benefits report, the western EIM estimated that the gross benefits for Q4 of 2016 was $28.26 million. This sum is significant in many aspects. First, it brings the total gross benefits of this relatively new wholesale market to a staggering $142.62 million, barely two years since it began operating. Second, and more importantly, it represents the kind of savings that EIM participants like NV Energy are bringing home to their customers. To NV Energy, this continuous success of the EIM is huge. NV Energy saved customers $3.07 million in Q4, bringing the total gross benefits for its first year of participation to a whopping $10.47 million.

Considering that NV Energy’s business case for 2016 was conservatively estimated at $5.1 million, according to Walter Spansel, NV Energy’s Vice President of Transmission, this overwhelming success is beyond even what NV Energy hoped for when they decided to join the EIM. Spansel stresses that, “This is a good indicator of success and the level of benefits we were hoping to achieve for our customers.” To Spansel, NV Energy’s EIM success is not accidental. It is demonstrative of the kind of synergy that is achieved when a great strategy is deployed with the right technology and an assiduous workforce.

Given the foundational role that technology has played in making NV Energy’s EIM entry a home run within the first year, Spansel is reminded of the tremendous initiative that has made this possible. He notes that “FERC even listened in on NV Energy’s launch, which was pretty phenomenal, and then we exceeded every Go-Live event expectation set forth by CAISO and FERC. The CAISO engineers were extraordinarily complimentary of our launch.” NV Energy is looking forward to expand the opportunities provided by EIM, to facilitate the transfer of available capacity for generation east of Nevada to get to the market, as well as further the integration of its PV projects as more customers adopt its RenewableGenerations (a rooftop solar incentive) program.   

The role of technological innovation is central not only to market participants like NV Energy, but also to the very operation of the EIM as a whole. As CAISO pointed out in its 2016 Q4 Benefits Report, EIM’s success comes from using “state-of-art technology to automatically optimize the real-time grid and find low-cost energy regardless of its location to serve consumers in Arizona, California, Idaho, Nevada, Oregon, Utah, Washington, and Wyoming.” This is achieved by seamlessly matching bulk power demand with the least-cost generation every 15 minutes. CAISO’s Automatic Dispatch System (ADS) then initiates dispatch instructions every five minutes to auto-selected resources that are instantly available to resolve demand/supply fluctuations or forecasted versus actual market conditions. This process of identifying imbalances in supply and demand, and automatically optimizing every five minutes to meet the shortfall using the cheapest resources from across a wider footprint, is the cornerstone of the EIM.

With the proven capability of OATI webEIM to integrate seamlessly with the western EIM software infrastructure, NV Energy believes the OATI webEIM automated functionalities, like managing load forecasts, shadow settlements, base schedules optimization, and more, will continue to help drive up its benefits. NV Energy is also assured that with this tremendous success, they’ll easily achieve their green power growth initiatives and continue to serve their customers with the most diverse renewable energy portfolio in the country. Given that, in 2015, NV Energy—without the help from the EIM—exceeded Nevada’s required 20 percent Renewable Portfolio Standard, participation in the EIM will surely drive this through the roof.

About the Author:
Paris Amani has six years of experience in the electric power business, managing power applications. Mr. Amani is currently a Senior Director at OATI where he manages a team of Directors. He is also a Subject Matter Expert (SME) for the SPP market. Mr. Amani was a contributor to the successful launch of the OATI SPP Integrated Market solution that went live on March 01, 2014, as well as the Western EIM that went live on December 01, 2015. Mr. Amani was named 2012 OATI President Award recipient. This award is given to the employee that best represents OATI’s commitment to its customers. Mr. Amani was also awarded the 2015 OATI Top Team Award. This award is given to a Team for outstanding dedication and customer-first attitude that results in success for OATI customers.