AWEA applauds critical step to modernize power grid in Western U.S.

Move will save consumers billions of dollars and facilitate renewable energy growth across the West

February 12, 2013

 WASHINGTON, D.C., February 12, 2013 – The wind energy industry welcomed today’s announcement that the California power grid operator and PacifiCorp are creating an “Energy Imbalance Market” in the Western U.S., that will use computer technology to exchange electricity at five-minute intervals, instead of by telephone every hour as was formerly the case.

“We hope other utilities across the West will join this proven solution for reducing electric bills and allowing more clean energy onto the power grid,” said Rob Gramlich, Interim CEO.

“This is the single most beneficial step that can be taken to use our existing power grid more efficiently,” Gramlich said. “In the year 2013, it is about time that electric companies that want to exchange electricity with their neighbors move beyond using telephone calls and manual processes to do so, while much of the rest of the country is using computers and automated processes.”

He continued, “Electricity customers and state regulators across the West should be clamoring for their utilities to join this effort, as continued inaction is literally leaving billions of dollars of consumers’ money on the table. As more utilities join, the benefits for all participants increase as more participants mean there are more opportunities for mutually beneficial trade.”

An Energy Imbalance Market that has been operated by the Southwest Power Pool for the last six years has already produced hundreds of millions of dollars in net benefits for consumers, according to AWEA.

“Extensive analysis conducted over the last several years indicates that implementing an Energy Imbalance Market across the Western U.S. will yield around $1.5 billion in net benefits over its first ten years,” said Michael Goggin, AWEA’s Manager of Transmission Policy. “It is time for utilities and regulators to stop studying and start implementing this proven tool.”

As explained in today’s California Independent System Operator (California ISO) press release, an Energy Imbalance Market (EIM) is a proven tool for allowing electricity to move across the power grid more efficiently than is possible under the existing grid operating rules in place in much of the Western U.S. An EIM helps utilities accommodate the constantly fluctuating supply and demand for electricity on the grid, such as factories coming on and offline, millions of people turning air conditioners and heaters on and off, wind or solar output changing, or conventional power plants shutting down unexpectedly. Instead of scrambling to keep up with these changes using only their own power plants, an EIM allows utilities to buy and sell excess power with their neighbors, making both sides better off.

As is the case in any type of market, participation is voluntary, so in the extremely unlikely event that a utility finds that it is not advantageous to make such trades, it can choose not to. The EIM will take advantage of improvements in communications and computing technology to allow exchanges of electricity at five-minute intervals, replacing the cumbersome process of using phone calls to make hourly changes to electricity flows on the Western grid.

Energy Imbalance Markets have a proven track record of success. The Southwest Power Pool, which coordinates the power grid for Kansas, Oklahoma, and parts of six surrounding states, implemented an EIM in 2007 after studies indicated that the market would produce benefits of around $600 million relative to costs of $212 million over the first ten years. After implementation, the Southwest Power Pool found that the benefits exceeded its already lofty expectations by 20 percent.

California ISO maintains reliability and accessibility to one of the largest and most modern power grids in the world, delivering the energy needed for the world's eighth largest economy. PacifiCorp is one of the West's leading electric utilities. It operates as Pacific Power in Oregon, Washington and California; and as Rocky Mountain Power in Utah, Wyoming and Idaho.

AWEA is the national trade association of the U.S. wind energy industry. We represent 1,000 member companies and over 100,000 jobs in the U.S. economy, serving as a powerful voice for how wind works for America. Members include global leaders in wind power and energy development, turbine manufacturing, and component and service suppliers. They gather each year at the Western Hemisphere’s largest wind power trade show, the AWEA WINDPOWER Conference & Exhibition, next in Chicago, Illinois, May 7-10, 2018. Find information about wind energy on the AWEA website. Gain insight into industry issues on AWEA's blog, Into the Wind. And please join us on Facebook, and follow @AWEA on Twitter.