The design framework for a California Independent System Operator (ISO) energy imbalance market (EIM) received approval from the ISO board of governors. The EIM will allow western grid operators, known as “balancing authorities”, to voluntarily participate in a real-time energy market that enhances grid reliability and responsiveness, effectively integrates renewable power and saves wholesale energy costs. The ISO’s first EIM partner, PacifiCorp, has been working with the ISO to prepare for implementing the market expected to go live on October 1, 2014.
PURPA and the future of avoided cost rates.
The Federal Energy Regulatory Commission (FERC) approved the implementation agreement between the California Independent System Operator (ISO) and PacifiCorp that establishes the scope and schedule for a variety of tasks the parties will undertake to launch an energy imbalance market (EIM) by October 2014. Among its provisions, the implementation agreement sets out procedures for PacifiCorp to pay the ISO a $2.1 million fixed start-up fee to enable PacifiCorp to participate in the ISO’s existing energy imbalance market.
Utility CEOs face disruptive trends.
Top executives at AEP, the California ISO, and El Paso Electric address key challenges and opportunities.
Pursuant to a partial stipulation, the Oregon Public Utility Commission granted PacifiCorp dba Pacific Power a mere 0.5-percent increase in its base rates, or $20.7 million. The utility had asked for $41.2 million in rate relief, an increase of 3.5 percent. The parties to the settlement had been unable to agree on specific values for the company’s cost-of-capital components, but listed in the stipulation a “notational value” of 9.8 percent for ROE.
PacifiCorp and the California Independent System Operator Corporation (CAISO) entered a memorandum of understanding that commits the two largest grid operators in the western United States to work toward creating a real-time energy imbalance market (EIM) by October 2014. If implemented, PacifiCorp – which controls two balancing authorities primarily covering portions of six states, including part of Northern California – would participate in a co-optimized real-time energy market facilitated by the ISO. The joint agreement applies only to the EIM service.
(January 2013) Dominion Virginia Power contracts Alstom for HRSGs at 1,300-MW Brunswick County station; Entergy acquires KGen plants; San Diego Gas & Electric installs new outage management system; ChargePoint enters reseller agreement with Service Solutions; Saft to install battery storage project at High Wind project in Saskatchewan; NRG’s eVgo finalizes plans for California charging network; plus contracts and announcements from ABB, ADT, Elster, Itron, ElectroIndustries, Opower, Panasonic, FirstEnergy, PacifiCorp, and others.
Planning ahead in a low-cost gas market.
IIt’s ironic that in today’s market, as the cost of hedging against commodity price increases has declined, support for utility hedging programs has sunk to a historic low. The ideal time to hedge is when prices are low and markets are relatively calm, because that’s when hedging costs and risks are the lowest. Conversely, waiting until prices rise and markets become volatile will expose customers to higher costs. Convincing regulators to approve hedging programs now will require a collaborative approach to educating and enlisting support from stakeholders.