Expanding Western Energy Imbalance Service Market offered $31.7M in benefits to 12 utilities in 2022
According to a market report of Southwest Power Pool’s (SPP) Western Energy Imbalance Service Market (WEIS), it provided $31.7 million in net benefits to 12 participating utilities last year and continues to grow its membership.
WEIS is a centralized, real-time balancing market that sends the lowest-cost available energy generation from multiple power providers to meet the combined demand for electricity region-wide. SPP said this saves utilities from having to either service customers individually with their own generation fleets or rely on unoptimized, hourly energy interchanges. Last year, the payoff was a benefit-to-cost ratio of seven to one, with the $31.7 million savings from energy-cost reductions blowing away the $4.7 million in contractual costs for market participation.
“This report is another confirmation that the Western Interconnection can gain tremendous value from SPP’s services,” said Antoine Lucas, SPP vice president of markets. “We look forward to continuing to provide value to our WEIS and other contract service participants in 2023.”
Following a period of testing, on April 1, Xcel Energy-Colorado, Platte River Power Authority, and Black Hills Colorado Electric, LLC became the latest members of the market. From their first week in the market, SPP reported lower energy costs for all three and new opportunities for them to export and profit from the excess generation that would have otherwise gone unused. For WEIS’s side of things, the three utilities also nearly triple its electrical size and generating resources, likely lowering costs and increasing reliability further.
“Joining the SPP WEIS helps support our environmental stewardship and represents our commitment to financial sustainability for our owner communities and their customers while focusing on Platte River’s vision of improving our region’s quality of life through a more efficient and sustainable energy future,” Jason Frisbie, general manager and CEO of Platte River, said. “SPP WEIS allows Platte River to reduce costs and balance our energy generation with the real-time power needs of our region, as well as integrate greater amounts of renewable energy.”
Broken down to the megawatt-hour, WEIS reportedly reduced the cost of wholesale electricity in the region by an average of $1.35 over the year.
