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Forging a Unified Grid: Exploring Western Day-Ahead Market Initiatives, CAISO’s EDAM and SPP’s Markets+

By Anshuman Vaidya

The WECC region is witnessing significant efforts to enhance grid integration through competing day-ahead market proposals. Building on the foundation of existing real-time markets like CAISO’s Western Energy Imbalance Market (WEIM) and SPP’s Western Energy Imbalance Service (WEIS), these initiatives aim to improve reliability, resilience, and efficiency across a broader geographic footprint.  

The two primary contenders are CAISO's Extended Day-Ahead Market (EDAM) and SPP's Markets+. These voluntary markets are crucial for optimizing transmission and resources in the larger day-ahead timeframe. Their eventual footprints and design details have substantial implications, particularly for renewable energy developers seeking to connect generators to utilities considering participation in either market. 

Understanding EDAM and Markets+ 

CAISO's EDAM is designed to extend the benefits of the established WEIM into the day-ahead timeframe, optimizing resources and transmission across an expanded Western area. It leverages CAISO’s existing day-ahead market and builds on the successful WEIM platform. All generation and load within a participating EDAM Balancing Authority Area (BAA) must either bid or self-schedule in the market, with these transactions being re-optimized in the WEIM's real-time markets. Participation in EDAM also requires concurrent participation in the WEIM. 

SPP’s Markets+, on the other hand, is a new, stand-alone day-ahead and real-time market. Like EDAM, Markets+ aims to optimize supply and demand across its footprint. Participants must take all incremental market services, including both the stand-alone day-ahead and real-time markets, and be part of the Western Resource Adequacy Program (WRAP). 

Both markets involve complex design features currently under active discussion among stakeholders. Both EDAM and Markets+ plan to use flow-based optimization while also respecting members' contract rights through contract path-based constraints. 

Key Differences and Design Considerations 

  • Governance Framework: EDAM uses the joint authority model involving the WEIM Governing Body and the CAISO Board of Governors. The Markets+ Management Committee (MIP) holds the highest authority over Markets+, delegated from the SPP Board of Directors. 
  • Congestion Revenue Allocation: EDAM allocates congestion revenues back to the participating BAA, and each participant decides how to suballocate these revenues to their transmission customers. This includes both physical congestion within a BAA and contract-path congestion between BAAs (EDAM Transfer Revenues). Markets+ allocates congestion revenues directly to entities holding rights on constrained facilities.  
  • GHG Pricing Mechanisms: The EDAM approach builds on the WEIM's established GHG mechanism, adding features for day-ahead operations. It uses a GHG Reference Pass to establish baseline dispatch and export limits for sales into GHG areas. The Markets+ approach proposes a new design with options for resources outside GHG states selling into those states: the Resource Owner, or Merit Order options. Markets+ Phase Two plans to investigate a tracking and reporting mechanism for non-priced GHG states.
  • Fast Start Pricing (FSP): The market clearing engine for Markets+ includes FSP, while CAISO's engine for EDAM currently does not. CAISO notes that WEIM/EDAM compensate flexible resources via the Flexible Ramping Product (FRP) and Imbalance Reserves. Markets+ also include Imbalance Reserves.
  • Market Footprint Diversity:  Participating entities found that the EDAM footprint provides better diversity and connectivity when compared to Market's+ footprint, as it includes direct access to California solar resources. EDAM participation led to a greater reduction in gas generation due to access to midday solar, whereas Markets+' limited connectivity between the Pacific Northwest and the Desert Southwest led to solar curtailments in their modeling scenarios.
  • Ease of Entry: Participating entities also found that EDAM offered a lower cost to entry and built incrementally on their existing WEIM systems. EDAM participation requires current WEIM participation. There is no deadline to join EDAM, but joining typically requires at least 18 months for onboarding and implementation. 

Other design elements include Resource Sufficiency evaluations, where EDAM requires participants to demonstrate sufficient energy, capacity, flexibility, and transmission day-ahead, leveraging the existing WEIM RSE. Both markets aim to improve reliability through regional coordination and diversity benefits. 

Latest Updates and Participant Choices 

Federal regulators accepted CAISO's EDAM tariff and a FERC Order accepted the EDAM Access Charge tariff amendment in June 2024.  

Several entities have signed implementation agreements or signaled with intent to join EDAM:

  • PacifiCorp and PGE plan to enter in 2026 
  • Turlock Irrigation District, Los Angeles Department of Water & Power (LADWP), and Balancing Authority of Northern California (BANC) plan to enter in 2027.  
  • Idaho Power, BHE Montana, PNM, and NV Energy are showing interest in entering.
  • Arizona G&T Cooperatives and several other Western utilities are currently studying EDAM benefits. 

For Markets+, SPP requested a November 20 order from FERC on its tariff status and a December 16 deadline for funding parties to sign contracts. The decision to fund Markets+ can be separate from the decision to participate.  

  • Arizona Public Service (APS), Salt River Project (SRP), Tucson Electric Power (TEP), and UniSource Energy Services have announced plans to join.  
  • Powerex has also announced it will join Markets+.  

Implications for Renewable Developers 

The choice of a market by a utility has direct consequences for renewable energy developers connecting generators within that utility's service territory. Participation in either day-ahead market allows a developer's resource portfolio to be optimized within a larger regional footprint. Specific design elements that directly influence project revenues and costs include:

  • Congestion Revenue Allocation: The approach to allocating congestion revenue determines how financial risks or benefits associated with transmission constraints, which can impact the delivery of renewable energy, are distributed. Developers with existing transmission rights may benefit differently depending on the market's allocation method. 
  • GHG Pricing: The GHG pricing mechanism is crucial for renewable projects located outside GHG-regulated states that want to sell power into those states. The design impacts how easily and favorably their clean energy is dispatched and credited in areas with emissions pricing. 
  • Footprint Diversity and Connectivity:  A market with greater footprint diversity and better transmission connectivity can potentially reduce renewable curtailment and improve dispatch opportunities, directly impacting project revenue. Utilities joining Markets+ highlight the potential to sell excess solar power. 
  • Compensation for Flexible Resources: Features like Imbalance Reserves (in both markets) and FRP (in EDAM) provide revenue opportunities for renewable technologies paired with storage or hybrid configurations that can offer fast and flexible response. 
  • Operational Requirements: Connecting to a utility participating in a day-ahead market means adhering to that market's specific operational requirements. This includes bidding rules, scheduling procedures, data reporting (such as Wind and Solar Summary reports in EDAM), and potentially submitting GHG bids. Resources with day-ahead market awards may be subject to must-offer requirements in the real-time market. 
  • Reliability Requirements: Participation in markets like EDAM involves Resource Sufficiency Evaluations (RSE) where participants must demonstrate sufficient resources. Developers of projects within these BAAs must understand how their generation contributes to these requirements. There can be surcharges for RSE failure. 

The development of EDAM and Markets+ represents a significant step towards greater regional coordination in the Western power system. While both promise benefits for reliability, efficiency, and renewable integration, their differing designs, particularly regarding governance, congestion revenue allocation, and GHG pricing, mean that participation in one versus the other will lead to different outcomes for utilities and developers.

Developers must closely follow these developments and understand the specific market rules, costs (like the EDAM Access Charge), and characteristics of the footprint their projects will operate within in order to accurately evaluate project feasibility, refine bid strategies, and maintain operational compliance. EPE offers expert guidance throughout this process. Schedule a consultation with our team using the form below.

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