Bonneville pushes for northwest imbalance market

OREANDA-NEWS. March 18, 2015. Bonneville Power Administration officials are keen on working with other Pacific northwest utilities to keep momentum building for a regional energy imbalance market that has suffered two recent setbacks.

Bonneville and other members of the Northwest Power Pool's market assessment and coordination committee have been developing an imbalance market since 2012 to be based on a security-constrained economic dispatch (SCED) model under an independent operator.

Last month, the committee representing balancing area and scheduling coordinators with almost 26GW of installed capacity said it was unable to choose an independent operator to oversee the market.

That was followed by Washington state utility Puget Sound Energy's decision to join the California-led energy imbalance market in 2016 rather than wait for the proposed northwest market to develop.

What some viewed as a blow to the group's progress, Bonneville administrator Elliot Mainzer said he hopes will strengthen the will of Pacific northwest utilities to move forward.

Mainzer said the group should pursue "incremental progress on what may end up being some transition steps before we figure out what the longer-term path around SCED firms up to be."

Mainzer suggested interim steps might include automating the 15-minute market and finding ways to capture value from diverse resources across northwest balancing authorities.

"Folks want to keep some momentum going, keep driving this and maintain some cohesion," Mainzer said yesterday during a public meeting with customers and stakeholders in Portland.

The group is working to make a declaratory filing at the Federal Energy Regulatory Commission (FERC) in mid-April. Assuming FERC responds in about six months and allowing additional time for follow-up and reply, project manager Mark Symonds said Bonneville's decision on whether to commit to the new northwest market could come in late 2015 or early 2016.

The northwest pool has estimated cost savings from the new market at \\$70mn-\\$80mn/yr, with a range as low as \\$17mn/yr to \\$125mn/yr.

Start-up costs are estimated between \\$11mn-\\$23mn, with annual costs between \\$3.6mn-\\$6mn.

Some pool members are concerned that costs of operating the market will exceed savings significantly. Mainzer said Bonneville is continuing to talk to the Southwest Power Pool about its costs to serve as the market operator.

Using five-minute dispatch with SCED should reduce production costs by reducing the amount of flexible reserves being held to balance the region's abundant intermittent resources. Bonneville expects to be able to increase its revenue when its federal hydro capacity is released.

Regional fragmentation and delay are among the risks to SCED savings, Bonneville said.

The northwest pool committee includes Bonneville, British Columbia's BC Hydro, Seattle City Light, Portland General Electric and others.