CAISO forms groups to dive into EDAM details, create straw proposal by April

The California Independent System Operator is taking the next step in expanding the Western Energy Imbalance Market into the day-ahead market by forming stakeholders working groups to work on market design details.

The working groups, outlined during a Dec. 16 Extended Day-Ahead Market meeting, will meet twice a week Jan. 3 through March 17. The three working groups will focus on different market aspects to develop the market design for EDAM.

"The ISO appreciates the amount of interested in the EDAM," said Mark Rothleder, CAISO senior vice president and chief operating officer. Working group feedback will be used as a call to action.

The working groups work will lead to a straw proposal by April, said Phil Pettingill, working group coordinator with CAISO.

"As stakeholders want to create small groups ... to discuss topics and bring that back to the working groups, we're open to that," Pettingill said about the process being open to all stakeholders.

The goal is to create a market design proposal with the final summary of the working group meetings sent to the CAISO design team, Pettingill said.

EDAM design is expected to be finalized by the end of 2022 with the first set of utilities in testing in 2023, CAISO President and CEO Elliot Mainzer told S&P Global Platts. The goal is to onboard EDAM participants in 2024.

Working groups' focus

One working group will focus on supply commitment and resource sufficiency evaluation. Members will work on core design elements, such as:

Another working group will focus on transmission commitment and congestion rent allocation. The group will focus on how transmission is made available to EDAM and the associated quality, and how parties are compensated for the transmission made available to support EDAM transfers, said Partha Malvadkar, CAISO principal of resource adequacy and infrastructure policy.

A third working group will focus on greenhouse gas accounting and costs. Members will work to answer whether and how an EDAM market optimization should factor in GHG costs in arriving at an efficient dispatch while also balancing the policy objectives of different states, being sure not to inappropriately affect resources in non-GHG states, said Kevin Head, working group facilitator. The group will also look into whether and how information about carbon intensity of energy transacted through the CAISO's market is affected by the implementation of an EDAM.

"In our first meetings, we will be focused on these scope items," said Milos Bosanac, with CAISO customer service and industry affairs, adding they hope to develop a consensus.

Western EIM background

Currently, the Western EIM includes less than 10% of the energy transactions in the CAISO real-time market, according to an ISO blog. However, when the EDAM stakeholder process started two years ago, it became apparent there were significant differences in what that market would look like and how it would perform.

The EDAM stakeholder process started two years ago. CAISO formally launched the EDAM design stakeholder process Nov. 12, following an EDAM workshop Oct. 13 when CAISO and western power entities discussed progress and next steps.

The Western EIM launched in 2014 and by 2023 will include members in all 11 western states representing 84% of the demand for electricity in the Western Electric Coordinating Council.

The EIM is the vehicle by which entities outside of Cal-ISO's balancing authority area participate in the ISO's real-time market. It uses advanced technology to automatically find the lowest-cost energy to serve real-time customer demand across participating entities in the West.

The EIM is an optimization tool for utilities to balance supply and demand every 15 minutes with five-minute power plant dispatching. Utilities participating in the real-time market share resource more cost effectively across a larger geographic footprint, which significantly lowers the cost of delivering power to customers.