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S&P Global: Utilities with 11 million customers eye power market integration in US West

Posted by Zack Hale on Oct 5, 2021

S&P Global summarized the Western utilities exploring further power market integration, citing AEE's Amisha Rai on the need for a Western RTO. Read snippets below.

A new coalition of electricity suppliers in the U.S. West with about 11 million combined customers is exploring further power market integration as the drought-ravaged region seeks to slash greenhouse gas emissions while boosting grid reliability.

The informal group, dubbed the Western Markets Exploratory Group, or WMEG, was announced Oct. 5 by some of the region's top publicly traded and publicly owned utilities. Lawmakers in Colorado and Nevada passed bills this year that require their states' electric utilities to join regional transmission organizations, which are overseen by the Federal Energy Regulatory Commission.

Existing RTOs such as the Midcontinent ISO and PJM Interconnection typically save customers billions of dollars annually by coordinating least-cost generation dispatch across wide geographic footprints. They are also responsible for transmission system planning and operations.

An Oct. 5 news release cautioned that discussions within the informal group are still in the "early stages." But the group is exploring a potential "staged approach" to new market services such as day-ahead energy sales, transmission system expansion, "and other power supply and grid solutions consistent with existing state regulations," according to the release...

Transitioning to a single RTO in the U.S. West would produce about $2 billion in gross annual benefits by 2030 compared to maintaining a status quo approach, according to a U.S. Energy Department-funded study released last month.

"It's nice to see utilities in the West publicly acknowledge the value of regional market expansion," said Amisha Rai, who oversees the trade group Advanced Energy Economy's clean grid strategy in California, Colorado and Nevada. But Rai said power market expansion in the Western U.S. must focus on an RTO approach as the ultimate outcome. "

From our perspective, incrementalism will not get it done," Rai said in an interview. "If we're serious about achieving decarbonization goals, grid reliability needs, and addressing challenges to the system through extreme weather events and other climate change impacts, then we have to get serious about [an] RTO."

Topics: AEE In The News