SPP Proposes Western Energy Imbalance Service Market

In June 2019, the Southwest Power Pool (SPP) announced that it intends to launch the Western Energy Imbalance Service (WEIS) market in December 2020. SPP currently oversees the electric grid and wholesale power market for utilities and transmission companies in 14 central U.S. states, and the new market is expected to generate significant cost savings for participants. The proposed WEIS is “one of several components of SPP’s Western Energy Services family of contract-based products”, according to the press release, and will “balance generation and load regionally and in real time” with a settlement granularity of five minutes.

Via the WEIS proposal document, SPP states it will be able to “create opportunities for participants to take advantage of diverse generating resources, optimize their use of the Western Interconnection’s transmission system and minimize overall costs to their end-use customers”. The market will provide price transparency of wholesale energy and allow parties to trade bilaterally and hedge against costly transmission congestion. As the SPP imbalance market will be a contract service, utilities do not have to be members of the SPP regional transmission organization (RTO) to participate.SPP’s independent Market Monitoring Unit (MMU) will perform monitoring oversight for the WEIS. The MMU will “remain independent from market participants and SPP management” and “work to protect and foster competition while minimizing interference with open and competitive markets”.

The proposed WEIS will compete with the California Independent System Operator (CAISO) Western Energy Imbalance Market (EIM), which was launched in November 2014. The CAISO EIM has provided significant savings for participants and strongly supported the integration of renewable resources into portfolios.

Power Settlements will be monitoring implementation progress and provide updates when they become available.