NV Energy Can Join Energy Imbalance Market with Conditions

(BRK.A), (BRK.B)

Last week the Federal Energy Regulatory Commission (FERC) granted Berkshire Hathaway’s NV Energy permission to enter the western Energy Imbalance Market (EIM), a move that will save NV Energy millions a year.

However, the authorization comes with conditions.

FERC wrote in their November 19, 2015 order, “…we will allow the Berkshire EIM Sellers to participate in the EIM at market-based rates on the condition that: (1) the Berkshire EIM Sellers offer their units that are participating in the EIM into the EIM at or below each unit’s Default Energy Bid, as defined below; and (2) the Berkshire EIM Sellers facilitate CAISO’s enforcement of all internal transmission constraints in the PacifiCorp and NV Energy balancing authority areas.”

Financially binding participation in the real-time market will commence on December 1, 2015.

With the entry of NV Energy, the EIM will cover almost all of Nevada, Utah and Wyoming, along with California and some of Washington, Oregon and Idaho.

The Savings Add Up

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.

The predicted benefits for PacifiCorp have proven to be true, and the California Independent Service Operator (CAISO) has been able to quantify the benefits for the year so far were over $33 million.

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.

© 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.