LET’S TRADE: California’s regional electricity market is about to get a whole lot bigger.
Oregon’s largest electricity supplier, Portland General Electric, will join the Extended Day-Ahead Market at midnight on Thursday — the first entry of a new power provider since the market launched in May.
And on Wednesday, energy leaders selected the first board of directors for a new independent nonprofit that’s slated to eventually oversee that market.
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“Having those two things happen within the same week, it gives me goose bumps,” said Pam Sporborg, senior director of transmission and market for the Oregon utility.
Portland General’s entry into the market represents a major step forward for the yearslong effort to expand electricity trading across the western states.
A coalition of energy leaders, who united in 2023 to form the West-Wide Governance Pathways Initiative, have been pushing to increase the connections between power plants and electricity providers across western states. Their goal is to facilitate electricity trading across a region that’s bigger than the weather, so that regions experiencing mild conditions can send power to places where extreme heat or cold is straining the grid.
The California Independent System Operator, an organization which manages California’s grid, had already established a market that many western utilities participate in, but it only allowed for electricity trades looking ahead to the next five, 10 or 15 minutes.
EDAM, the new market, will allow trades a full day ahead, when far more electricity use is planned by power providers. California energy leaders say that will help make the western electricity grid more reliable, and save customers money by piping in electricity from regions where demand is low to areas that need more power on any given day.
The Oregon utility “expands the market’s geographic footprint,” said CAISO CEO Elliot Mainzer. “That broad footprint has been proven to be one of the most effective strategies for improving reliability and affordability.”
The power plants in Portland General’s territory complement those operating in the portfolio of California’s investor-owned utilities and the sprawling Northwestern utility Pacificorp, which are already participating in California’s new electricity market.
California is rich in solar electricity and Pacificorp brings wind to the table, while Portland General has a strong mix of hydroelectric, wind and natural gas generation, according to Sporborg.
Tapping a diverse range of renewable electricity will be essential to California meeting its renewable energy goals, since the state’s vast solar fleet goes idle when the sun goes down.
Seven more energy providers plan to join the EDAM over the next two years, which will extend the markets’ reach in Nevada, Montana and New Mexico. But one key utility is still riding the fence: the Bonneville Power Administration, a federal agency that distributes hydropower, and the largest electricity provider in the Northwest.
Last year, Bonneville announced its intention to join a competing electricity market, called Markets+, which Arkansas-based Southwest Power Pool is developing. Bonneville made its decision amid broader concern across the region that joining a regional electricity market operated by California risked governance that could unfairly favor California.
But later that year, California Gov. Gavin Newsom signed AB 825, a bill which allowed California to pass oversight of its electricity markets to an independent entity. In recent months, that new entity, a nonprofit called the Regional Organization for Western Energy, has taken shape. With its board of directors now in place, the group’s new leaders will begin meeting next month.
A new Bonneville administrator, Travis Kavulla, took the helm of the agency in June. Given the steps California has taken to pass oversight of the EDAM to an independent group, Kavulla wrote in a letter to the ROWE earlier this month that he has committed to reviewing which electricity market Bonneville should join “with fresh eyes.”
His letter detailed a slew of actions he hoped the ROWE would take to demonstrate its independence from California, including choosing a board chair who has “the gravitas and capability to lead decisively.”
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