APS Begins Participation in Flexible, Regional Market to Save Customers Money


Energy Imbalance Market enables APS to operate more efficiently, better integrate renewables

PHOENIX – On Oct. 1, three energy traders from Arizona Public Service Co. sat in front of 24 computer screens and successfully completed their first transaction as a participant in the western regional Energy Imbalance Market (EIM). While doing business with other utilities isn’t new for APS, the EIM enables the company to buy and sell power in increments as small as five minutes, garnering efficiencies that are not possible with traditional hour-ahead trading practices. APS expects this difference in trading efficiency could result in savings between $7 million and $18 million a year for customers.

“Participating in a market that enables APS to buy and sell power closer to when electricity is consumed will result in meaningful economic savings to customers through lower production costs and better integration of renewable resources like solar,” said Tammy McLeod, Vice President of Resource Management for APS. “We are always looking for ways to operate more efficiently and cost-effectively and we believe the EIM provides us that opportunity.”

The EIM enables utilities across the western region to buy and sell energy more efficiently, significantly lowering the cost of keeping the lights on. While APS’s power plants will continue to be the first and primary source of energy to meet APS customer demand, the difference between participating in the EIM over the traditional, less flexible energy markets is that the EIM automatically finds the most efficient energy resources available if APS decides to buy or sell power in the marketplace. EIM’s real-time market capabilities will help APS respond quickly to variable renewable energy production and better incorporate renewable resources by automatically adjusting to intermittency.

“Any proven technology that allows us to be innovative and flexible in the way we power our customers’ lives – while cutting costs – is important to Arizona’s energy future,” said McLeod. “Our decision to participate in the EIM is another example of how we’re providing our customers with a cleaner, stronger and smarter system to meet their changing energy needs.”

The California Independent System Operator (ISO) and PacifiCorp launched the regional EIM on Nov. 1, 2014. Since then, participants have realized combined benefits of over $88 million.

“Participants in the EIM have seen considerable benefits since the market was launched in 2014,” said Steve Berberich, President and CEO of the ISO. “Broader utility participation across the West means increased access to diverse resources which translates into benefits for customers.”

Currently, the EIM automatically dispatches least-cost energy in real time in California, Oregon, Washington, Nevada, Utah, Idaho and Wyoming. Portland General Electric is scheduled to join the EIM in 2017 followed by Idaho Power in 2018. Today’s announcement marks the third and fourth entities to join the EIM (Puget Sound Energy also launched its EIM participation on Oct. 1), extending its reach across eight states.


Three of APS’s power traders at work on the company’s Marketing and Trading floor.

APS serves about 2.7 million people in 11 of Arizona’s 15 counties, and is the Southwest’s foremost producer of clean, safe and reliable electricity. Using a balanced energy mix that is nearly 50 percent carbon-free, APS has one of the country’s most substantial renewable energy portfolios, and owns and operates the Palo Verde Nuclear Generating Station, the country’s top power producer and largest producer of carbon-free energy.  The company is also a proven leader in introducing technology and services that offer customers choice and control over their energy consumption.  With headquarters in Phoenix, APS is the principal subsidiary of Pinnacle West Capital Corp. (NYSE: PNW).

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