Tucson Electric Power Co. will join a Western wholesale power market it says will save the company and its ratepayers $13 million a year.
TEP said the California Independent System Operator, which oversees the state’s wholesale power markets, has signed an agreement with TEP to participate in the Western Energy Imbalance Market, or EIM, beginning in April 2022.
Eight utilities, including Arizona Public Service Co., now participate in the Western Energy Imbalance Market, which automatically draws on the least-cost generating option available to meet short-term variations in their customers’ power usage.
TEP spokesman Joe Barrios said that while system operators now manually transmit data every hour, the EIM will automatically transmit pricing information every five minutes, allowing utilities to benefit from price swings.
“The EIM will help TEP save money for customers by expanding our real-time access to renewable power and other low-cost energy resources across the Western grid,” said Erik Bakken, vice president of system operations and environmental for TEP.
Barrios noted that APS as a member of the EIM in the past has been paid to take excess power from California, a phenomenon known as “negative pricing.”
Earlier this month, the California ISO announced that since 2014, total gross cost benefits to participants in the Western Energy Imbalance Market had reached $650 million. APS alone saved more than $8 million in the first quarter, the agency said in a recent report.
The market also allows participants to maximize their use of renewable resources, by taking advantage of available wind and solar generation anywhere and matching their variable output with steady-producing “dispatchable” resources like gas-fired power plants, TEP said.
Besides APS, current Western Energy Imbalance Market participants are PacifiCorp, NV Energy of Nevada, Puget Sound Energy of Washington, Portland General Electric, Idaho Power, Powerex, and the Balancing Authority of Northern California/Sacramento Municipal Utility District.
Others scheduled to begin participation include Seattle City Light and Arizona’s Salt River Project, both in 2020; the Los Angeles Department of Water and Power, Northwestern Energy of Butte, Montana, and Public Service Company of New Mexico in 2021; and Washington’s Avista in 2022.