Colorado utilities plan to join the Western Energy Imbalance Service Market
Denver (January 25, 2022) – Xcel Energy-Colorado, Platte River Power Authority and Black Hills Colorado Electric, LLC announced plans today to join the Western Energy Imbalance Service (WEIS) Market, operated by the Southwest Power Pool (SPP). This move allows these utilities to provide cost savings to customers and improve operational efficiencies. The companies expect to join the WEIS in April of 2023 and will continue to study long-term solutions for joining or developing an organized wholesale market.
“As we look at opportunities moving forward, this short-term step meets our energy needs to deliver clean, reliable and affordable energy to customers right now,” said Alice Jackson, president of Xcel Energy—Colorado. “The energy imbalance market allows us to participate in an organized market while giving us the flexibility to explore a more permanent solution that will help us integrate more wind and solar energy onto our system.”
“Joining the WEIS will expand the benefits we gained from the joint dispatch agreement (JDA) on behalf of our owner communities,” said Jason Frisbie, general manager and CEO of Platte River Power Authority. “We’ve created excellent partnerships through the JDA that currently provide great value to our customers. Moving into an energy imbalance market brings Platte River one step closer to a noncarbon energy future.”
“We’re very active in evaluating and seeking opportunities that lower energy costs and lead to expanded renewable energy options for our customers and communities,” said Vance Crocker, vice president of Black Hills Colorado. “In addition to our ongoing work with our regional utility partners and by joining the WEIS, we continue to explore avenues that provide benefits to customers.”
“Southwest Power Pool is very pleased that our Western Energy Services customer base continues to grow,” said Barbara Sugg, SPP president and CEO. “We’re proud that our relationship- based approach and valuable portfolio of services continues to attract utilities looking to modernize and regionalize the way electricity is delivered. And we’re confident SPP and our WEIS participants will not only benefit from this expansion but will also help these utilities meet their goals of making power delivery more affordable and reliable.”
An energy imbalance market is a real-time market in which energy generation from multiple power providers is dispatched at the lowest possible cost to reliably serve the combined customer demand of the region.
Xcel Energy—Colorado currently operates under a JDA that enables sharing generation between Platte River Power Authority, Black Hills Colorado Electric and Colorado Springs Utilities within its Balancing Authority Area. The group explored participation in the Western Energy Imbalance Market operated by the California Independent System Operator as well as the WEIS operated by SPP. Xcel Energy took a step back from joining the Western Energy Imbalance Market last year after one of its energy partners joined the WEIS. After further analysis, the group decided the best interim option was to move into the WEIS due to geographic diversity and existing interconnections. The utilities’ participation in the WEIS will replace the JDA and is expected to bring additional production cost savings to customers.
The three organizations remain committed to evaluating a longer term and broader regional market structure that will ensure system reliability and improve the integration of wind and solar energy on the system. In October, they announced participation in the Western Markets Exploratory Group (WMEG) and are committed to working with the WMEG to evaluate different market options that reduce costs, increase reliability, and help promote their strategies to create a carbon free electricity system. Participants in the WMEG will consider market structures that expand on energy imbalance markets and will evaluate broader market designs for the western region, including a staged approach to new market services, to see if those designs can enhance their ability to provide clean, reliable and low-cost energy service to their customers.
The agreement to join the WEIS still requires approval through appropriate regulatory processes.