SPP’s Western Energy Imbalance Service Market (WEIS) provides millions in benefits, more than doubles in size
Southwest Power Pool’s (SPP) 2022 WEIS Benefit of Market Report assesses the benefits that its regional, real-time Western Energy Imbalance Service Market (WEIS) provides participants. Its analysis estimates that the WEIS provided $31.7 million in net benefits to its 12 participating western utilities in 2022 at a benefit-to-cost ratio of 7-to-1. With the April 1 addition to the market of Xcel Energy-Colorado, Platte River Power Authority and Black Hills Colorado Electric, LLC, SPP anticipates the benefits of the WEIS will grow significantly in the future.
SPP’s WEIS is a real-time balancing market that dispatches the lowest-cost available energy generated and made available by multiple power providers to reliably serve the combined demand for electricity across its region. Without the centralized dispatch provided by SPP’s WEIS, participants would either have to serve customers individually using their generation fleets or use hourly energy interchanges that are not optimized.
The WEIS Benefit of the Market Report analyzed 2022 energy-use data to estimate what the cost of wholesale energy would have been without SPP’s market. The study compared this to actual energy costs in the WEIS and found that participants collectively saved $31.7 million in energy-cost reductions, far surpassing their $4.7 million in contractual costs for market participation. The WEIS reduced the cost of wholesale electricity in the region by an average of $1.35 per megawatt-hour over the year.
“This report is another confirmation that the Western Interconnection can gain tremendous value from SPP’s services,” said Antoine Lucas, SPP vice president of markets. “We look forward to continuing to provide value to our WEIS and other contract service participants in 2023.”
Xcel Energy-Colorado, Platte River Power Authority and Black Hills Colorado Electric, LLC announced their intent to join the WEIS in January 2022. Since then, they have been working in collaboration with SPP to prepare their staff and systems to participate in the market. On April 1, following a period of robust testing, their activities in the market became financially binding.
“Our participation in the WEIS gives us the opportunity to create additional value for our customers,” said Kellie Ashcraft, Black Hills Energy’s vice president of Colorado operations. “We’re committed to supporting our customers with the safe and reliable energy they depend on and doing so in a manner that lowers energy costs, enhances service reliability and supports the expansion of renewable energy on our system.”
Over the course of their first week in the market, the utilities have consistently experienced lower energy costs and new opportunities to export and profit from excess generation that would have otherwise gone unused. Together, the areas served by these utilities will almost triple the electrical size of the WEIS. More buyers and sellers mean more available generating resources to choose from. This is expected to increase the chance of further lowering costs and enhancing reliability by ensuring generation is always available to meet demand.
“Joining the SPP WEIS helps support our environmental stewardship and represents our commitment to financial sustainability for our owner communities and their customers while focusing on Platte River’s vision of improving our region’s quality of life through a more efficient and sustainable energy future,” says Jason Frisbie, general manager and CEO of Platte River. “SPP WEIS allows Platte River to reduce costs and balance our energy generation with the real-time power needs of our region, as well as integrate greater amounts of renewable energy.”