What California's launch of an extended day-ahead market means for the western US

**Dan Testa** (0:02)
Hello and welcome to Energy Evolution, the podcast where we aim to understand the ups and downs of the energy transition in all its facets.
I'm Dan Testa. In this episode, we're going to be getting into the weeds of it regarding power markets in the Western US. Specifically, we're gonna be talking about the recent launch of an Extended Day Ahead Market by California's grid operator, known as the California Independent System Operator, or CAISO. Now, that's the first of several acronyms you're gonna be hearing on this episode, so buckle up. The launch of California's Extended Day Ahead Market, or EDAM, is the latest development in the, well, I guess I'd call it an evolution, of regional power markets in the Western US across both organized, competitive markets and unorganized territories. Every day, power market participants in the Western US., so think municipal and investor-owned utilities, along with federal agencies and grid operators, all have to determine how much electricity they need for the following day and where it's gonna come from.
Think about the West. It's a huge region. There's major solar resources, wind and hydroelectric, among other forms of capacity. The EDAM establishes a marketplace where these power providers in the West can coordinate to find the cheapest electricity depending on grid conditions and restraints. But it's worth noting these market expansions are not just happening in California.
So how does this work and what does this mean for grid reliability, emissions, rate payers and power traders? Joining us today to address that will be Elliott Mainzer, President and CEO of KAIZO. We'll also be hearing from Scott Miller. He's Executive Director of the Western Power Trading Forum. They were interviewed by Kassia Micek, a reporter for S&P Global Energy, Platts who covers Western Power Markets and who joins us now. Hey, Kassia, welcome.

**Kassia Micek** (1:59)
Hey, Dan. Thanks for having me.

**Dan Testa** (2:01)
Okay. So to start, can you help us understand the significance of the launch of California's EDAM on May 1st?
How did this develop? Presumably these types of market changes don't happen overnight.

**Kassia Micek** (2:14)
No, they certainly do not. This has been years in the making. So to really understand the Western market expansion going on right now, you need to look back to 2014 when KAISO launched its voluntary real-time electricity market. That's known as the Western Energy Imbalance Market or WEIM. The WEIM automatically finds low-cost energy to serve real-time consumer demand across the West. This is for entities outside of the KAISO footprint.
It also improves the integration of renewable resources across the region, which leads to a cleaner, greener grid according to operators.
The WEIM now includes 24 balancing authorities across 12 Western states, representing 80% of the demand for electricity in the Western interconnection. So now building on the benefits of the WEIM, EDAM is a voluntary day-ahead electricity market designed to deliver benefits to balancing areas and utilities across the West. It will optimize the use of existing transmission and resources in the day-ahead market, where the vast majority of energy trading occurs. The new market should enable improved situational awareness across balancing authority areas, enhance reliability and lower greenhouse gas emissions.

**Dan Testa** (3:33)
And the California ISO is not the only power market in the West launching an expansion, is that right?

**Kassia Micek** (3:39)
Correct. Competition will heat up in 2027 as the Southwest Power Pool expands its day-ahead offerings to entities across the Western US. This will build upon SPP's real-time market that launched in 2021
And so entities across the West are looking into both KAISO's and SPP's extended day-ahead offerings to decide which of these markets best serve their needs. KAISO's EDAM launched May 1st with Pacific Core as the first participant.
Additional entities plan to join EDAM in the coming months and years. To learn more about EDAM, I spoke with KAISO President and CEO Elliott Mainzer. He started off by discussing the new markets launch.

**Elliott Mainzer** (4:21)
The EDAM launch went exceptionally well. I was honored to actually be at the Control Center and in our EDAM implementation room at midnight during the cutover.
Honestly, just remarkable to watch our technical teams working after so many years of work and programming and design to successfully migrate all that infrastructure under the new platform to sync the real time and day ahead markets and then begin operating into the new paradigm. It was just a remarkable moment and just really glad, fun to be live with this new market. Very exciting moment.

**Kassia Micek** (4:51)
And so now we're several weeks into the EDAM market. And so how have these first few weeks looked?

**Elliott Mainzer** (4:59)
I think the first few weeks have gone really well. We knew as with any major endeavor of this sort, that there would be some learnings and certainly we had some connectivity and data transfer and some of the basic fine tuning issues. But in general, the market has been operating very well. We've been seeing, I think, a good price formation, I think rational pricing both in the morning and the evenings, in the middle of the day. We've been able to see some new patterns breaking out between Pacific or East and Pacific or West and the California ISO.