APPA-NRECA Expert Confirms Skepticism of Western Energy Imbalance Market

A study performed for APPA and NRECA confirms that those that have been skeptical of the benefits of a proposed energy imbalance market in the Southwest, as is being urged by DOE Secretary Chu and the Western Area Power Administration, have good reason to be skeptical.  According to the study, production cost savings would be extremely modest, in an estimated range of 0.72-1.36%, if that.  Among other observations, the study notes that the government’s preliminary study, performed by the National Renewable Energy Laboratory, underestimates existing economic efficiencies by ignoring bilateral agreements for reserve sharing, economic interchange, power supply, ancillary services and other arrangements.  Alan I. Robbins, a member of Jennings Strouss’ Energy Group, believes that these conclusions fall in line with public power experiences in other RTO regions.

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