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Another one of Berkshire Hathaway’s utilities has begun saving millions through participation in an energy imbalance market.
NV Energy, which serves 2.4 million customers in Nevada, commenced participation in the western Energy Imbalance Market (EIM) on December 1, 2015.
“We welcome NV Energy’s entry into the western EIM,” said Steve Berberich, ISO President and CEO. “The real-time energy market is already generating significant cost savings, and NV Energy’s participation is expected to add to those benefits while incorporating more clean energy into the grid.”
In its first 12 months of operation, the real-time market has already produced more than $33 million in cost savings for Berkshire Hathaway’s PacifiCorp, the first EIM participant, and the ISO. Those savings are projected to increase as more utilities join the EIM.
NV Energy President and CEO Paul Caudill said his company’s participation in the EIM aligns with NV Energy’s longstanding commitment to seek opportunities that provide greater value to customers and support renewable energy.
“I am very pleased with the hard work many of my colleagues at NV Energy have done in the past year,” said Caudill. “I am also confident this work will be good for Nevada, as all resulting cost benefits will flow directly to our customers.” With the addition of NV Energy, the EIM expands into Nevada.
The ISO and NV Energy prepared for the utility to join the market for nearly a year, including extensive testing of operations and interfacing in the last two months. The ISO’s state-of-the-art software analyzes western grid needs every five minutes and automatically finds the lowest-cost generation to meet demand.
Millions in Annual Savings
NV Energy will save millions annually. The company’s attributed share of gross benefits is estimated to range from $6 million to $10 million in 2017, and from $8 million to $12 million by 2022.
Berkshire’s PacifiCorp Already Saving Millions
In 2014, when Berkshire Hathaway Energy’s PacifiCorp agreed to become the first participant in the new Energy Imbalance Market, it was touted as a way to balance electricity in-flows and out-flows on a regional basis that would bring millions of dollars in benefits to participating utilities.
About the Energy Imbalance Market
The EIM improves the integration of renewable resources and increases reliability by sharing information between balancing authorities on electricity delivery conditions across the entire EIM region. The only real-time energy market in the Western U.S., advanced ISO market systems automatically balance supply and demand for electricity every fifteen minutes, dispatching the least-cost resources every five minutes.
A 2013 study by the National Renewable Energy Laboratory found that an EIM with participation of all western states could cut electricity production costs by $1.3 billion a year.
© 2015 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.