In a major development for Western energy markets, NV Energy, Nevada's largest utility, will begin participating in the region's energy imbalance market on December 1.
The move, announced late Friday, follows the Federal Energy Regulatory Commission's November 19 decision to approve several key filings related to the EIM, including a set of "readiness criteria" that will be used to make sure a balancing authority area is prepared to join the market.
Also, FERC conditioned its approval on two steps NV Energy and PacifiCorp, both owned by Berkshire Hathaway Energy, must make to address concerns the utilities could exert market power.
NV Energy and PacifiCorp will be required to offer their units into the EIM at or below the units' default energy bid.
Also, FERC required the utilities to facilitate the California Independent System Operator's enforcement of all internal transmission constraints in the PacifiCorp and NV Energy balancing authority areas.
Powerex, BC Hydro's trading arm, was concerned that transmission constraints between Nevada and California may leave NV Energy's resources as the only ones that can provide imbalance service in Nevada, giving the utility the ability to drive up prices.
Similar concerns were raised about PacifiCorp's eastern balancing authority area.
There is about 1,500 MW of capacity available to import into Nevada from California, but the capacity may be less at certain times, according to FERC's order.
NV Energy will add about 6,100 MW to the EIM, which includes the ISO with 65,000 MW and PacifiCorp with about 10,595 MW.
The energy imbalance market saves money by dispatching the most efficient power plants across its footprint. It also helps integrate renewable energy sources such as wind farms that operate intermittently. As the market's footprint grows, the savings it produces increases.
Since the imbalance market started operating a year ago, it has saved about $33.4 million, according to a late-October report from the ISO.
PGE SEEKS TO JOIN EIM
Separately, Portland General Electric and the ISO asked FERC Friday to approve an EIM implementation that outlines the steps that must be taken for the Portland, Oregon-based utility to join the EIM on October 1, 2017.
Under the agreement, PGE will pay a $645,000 implementation fee. PGE owns 3,414 MW of generation and has about 1,500 MW in power purchase agreements.
Before joining, PGE will be subject to "readiness criteria" FERC approved last week. The criteria may be changed based on the ISO's experience in adding utilities to the market.
Puget Sound Energy, with 3,000 MW, and Arizona Public Service, with 6,500 MW, plan to begin participating in the energy imbalance market on October 1, 2016. Idaho Power is considering joining the market a year later.
PGE had been exploring joining an imbalance platform being crafted by the Northwest Power Pool's market assessment and coordination committee, or MC Initiative. PGE opted to join the EIM because it had more generating resources in its footprint than the market being crafted by the MC Initiative.
A cost-benefit analysis PGE performed at the direction of the Oregon Public Utility Commission found that it generally made more economic sense to join the MC Initiative market.
The analysis, however, was performed before Idaho Power and a group of California public power utilities decided to stop participating in the Northwest initiative.
