Stakeholders in Arizona and other western states are actively discussing how to expand the current voluntary Energy Imbalance Market (EIM) to an Extended Day-Ahead Market (EDAM)—a move that would significantly increase the emissions reductions and cost-savings that the current EIM is already generating.
The EDAM concept is similar to the EIM in that it is voluntary, provides additional incremental benefits, and uses existing infrastructure. Rather than replace the EIM, EDAM would serve as an additional market service that would realize additional energy reductions and cost savings by optimizing dispatch from limited real-time trading to almost 100% of the Western energy market.
Two of Arizona’s largest utilities, Arizona Public Service and Salt River Project, are participants in the Western Energy Imbalance Market, and have already seen the benefits that participating in a regional energy market can generate. APS Vice President for Resource Management Brad Albert agrees, saying, "This evolution of the wholesale market can have even more benefits by optimizing transactions on a day-ahead basis and more cost-effectively integrating higher levels of renewables." According to a 2016 study, “a full regional marketplace could potentially deliver savings of $1.5 billion per year from optimized dispatch, shared transmission costs and reduced reserve needs.”
Before EDAM can be realized, however, important governance, transmission, and sufficiency issues must be resolved. For example, with respect to transmission, APS’s Brad Albert has acknowledged issues around transmission capacity and compensation, saying, "We're trying to move something complicated ahead because it will benefit our customers, but it will not be easy."
While we are unlikely to see EDAM in the near future, it is encouraging that stakeholders are actively working on innovative solutions to these critical components, and participants appear optimistic that they can ultimately be resolved.