Northwestern Energy eyes lower costs as it joins CAISO Energy Imbalance Market

Dive Brief:

NorthWestern Energy will join California's voluntary Western Energy Imbalance Market (EIM) by April 2021, a move the utility hopes will result in lower costs for Montana customers and a more reliable and cleaner energy system.
The California ISO launched the EIM in 2014 and since then, several other utilities have joined, allowing the market to operate across eight western states: Arizona, California, Idaho, Oregon, Nevada, Utah, Washington and Wyoming.
California's grid operator estimates the EIM has generated benefits in excess of $500 million for market participants since its launch, and in the third quarter of this year, generated more than $100 million in savings.

Dive Insight:

The success of the western market has attracted more participants, which in turn generates higher savings. Third quarter savings were the highest for any quarter, the ISO said, "driven by periods of high demand and fuel prices."

"The opportunity to buy and sell lower cost energy available from the regional EIM footprint during high load, high energy price periods really showed this last quarter," Mark Rothleder, the ISO's vice president in charge of market quality and renewable integration, said in a statement.

And the market is expected to continue growing, officials said, with a half dozen entities preparing or proposing to join.

The ISO said the Balancing Authority of Northern California/Sacramento Municipal Utility District is set to begin participation in April 2019, followed by the Los Angeles Department of Water and Power, Salt River Project and Seattle City Light in April 2020. Public Service Company of New Mexico is seeking regulatory approval to participate in the EIM.

NorthWestern will begin participating in about two and a half years. The utility wants to expand its use of the regional electric grid to help integrate more renewable energy, CEO Bob Rowe said in a statement.

"We have seen significant growth in wind generation in Montana, which highlights the need to have access to other generation resources that are available on demand, 24/7. Being part of EIM will help with that need," Rowe said.