Colorado utilities could cut costs 5% by joining an RTO, PUC finds, as Western market momentum builds
The report comes as states and utilities across the West are considering options for forming one or more organized power markets to help them reduce costs, meet their energy goals and improve grid reliability.
Utilities in Colorado and Nevada are required to join an organized wholesale market by 2030 while states like Arizona and Oregon are exploring the issue. The California Independent System Operator (CAISO) and the Southwest Power Pool (SPP) are developing potential day-ahead markets for Western utilities that would build on energy imbalance markets (EIM) that are used to balance real-time shifts in electric supply and demand.
In part, Colorado’s interest in organized power markets is driven by its goal to cut carbon emissions from its generating fleet by 80% by the end of this decade and to eliminate such emissions by 2050.
The PUC’s report echoes the findings of a study released this summer that was prepared by Energy Strategies for utility regulators across the West.
The commission’s report found any type of organized market — an EIM, a day-ahead market or an RTO — would produce savings compared to the status quo of bilateral trades between utilities. However, the savings increase with higher levels of market integration, with an RTO producing the most benefits with the largest market footprint possible.