A Billion Dollar Milestone for the Western Grid

A celebrated political adage goes something like “a billion here, a billion there, and pretty soon you’re talking real money.” Everyone who is part of the giant 14-state western power grid just learned of a $1 billion reduction in their utility bills, courtesy of a regional initiative called the Energy Imbalance Market (EIM).

The announcement came today from the California Independent System Operator (CAISO), which worked with utilities and regulators across the West to create the EIM in 2014 to reduce electricity costs by giving utility customers more access to inexpensive, renewable (and clean) energy. The CAISO announcement also noted that since the EIM’s inception, it has cut carbon pollution by more than half a million tons throughout the region. That’s the same as avoiding the tailpipe emissions from more than 110,000 passenger cars.

Where did these benefits come from? The Energy Imbalance Market is an ingenious way to minimize the cost of balancing electricity use and generation across a giant grid operating at quite literally light speed; the market chooses the least-cost available power generation across a wide area, minute by minute, to fill gaps created by sudden unexpected reductions in output from other generators.

Since renewable power plants invariably have lower operating costs than fossil plants (because the sunlight and wind are free), the EIM results in both lower bills and reduced pollution. As more and more utilities join the market, the benefits steadily increase. My former colleague Carl Zichella recently chronicled the EIM’s rapid growth since 2014, with twenty-one major utilities now enrolled. This broad acceptance (by diverse constituencies) reflects in part an oversight board of widely respected experts based throughout the western grid.

Western Energy Imbalance Market - Active and Pending Participants
CAISO’s billion-dollar announcement represents an important milestone in a regional journey toward a fully integrated Western grid, in which full coordination of power plant operations and transmission management doubles down on the EIM concept.

Today’s announcement also means there’s more clean electricity flowing into western homes and businesses, and more downward pressure on utility bills. There are many more billions of dollars and millions of tons of emissions reduction yet to come, as additional systemwide coordination accelerates our clean energy transition.

Soon we will indeed be talking real money and pollution reductions.

About the Authors

Ralph Cavanagh

Energy Co-Director, Climate & Clean Energy Program

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