Brattle Principals Judy Chang and Johannes Pfeifenberger, and
Associate John Tsoukalis have authored a report that analyzes how
different market structures could alter production costs in the
combined service areas of the Mountain West Transmission Group
The Mountain West Transmission Group, made up of ten electricity
service providers in the U.S. Rocky Mountain Region, is exploring
potential participation with an existing regional transmission
organization (RTO) to expand their electricity market operations.
The Mountain West regional market would be the first market of its
kind in the Western Electricity Coordinating Council (WECC),
outside of California. To evaluate the projected market benefits,
the group commissioned Brattle for a preliminary analysis of
partial gross production cost benefits under a regional market or
commission transmission tariff.
The Brattle report, "Production Cost Savings Offered by
Regional Transmission and a Regional Market in the Mountain West
Transmission Group Footprint," specifically analyzes the
potential generation-related variable costs, or production costs,
of serving electricity customers in the Mountain West region under
three different market structures: a bilateral market, a joint
transmission tariff, and a regional market.
The study finds that the Mountain West entities would
collectively experience a significant reduction in production costs
by transitioning to a centralized wholesale power market.
Specifically, Mountain West participants would collectively
experience a reduction in annual production costs of about $88
million per year by moving from the status quo to a regional market
without must-run generation. This compares with a $14 million/year
production cost savings estimate from implementing only a joint
transmission tariff in the Mountain West footprint. The authors
note that additional studies would be needed to assess the benefits
related to resource adequacy and operation reliability, renewable
integration, and regional transmission planning and cost
The full report can be read on the Western Area Power
Administration's (WAPA) website.
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