A $3 Billion Milestone for the Western Grid

November 16, 2022

After a year of record-breaking heat waves, drought, and flooding, here’s some good news for the western United States: The Western Energy Imbalance Market (WEIM) is positioned to surpass $3 billion in cumulative benefits by the end of 2022, following an all-time quarterly high in benefits.

Helping to reduce greenhouse gas emissions and lower consumer rates, the WEIM optimizes the flow of electricity to deliver the lowest-cost resources across a wide service area. The total benefits in the eight years since the WEIM began operating hit $2.91 billion at the end of the third quarter this year, and more than $1 billion of that total accrued this year alone.

The announcement came two weeks ago from the California Independent System Operator (CAISO) after a record-breaking heat wave this summer in which the WEIM kept the lights on for millions of consumers at a time when many feared blackouts. The extreme heat in much of the western United States led to increased electricity transfers across the region. The ability of generation in regions experiencing cooler weather—such as hydropower in the Pacific Northwest and high-quality solar resources in the Desert Southwest—to provide power to their warmer neighbors showcased the immense benefits the WEIM provides. In addition to the economic benefits, the CAISO also announced that since it began operation, the WEIM has cut more than three-quarters of a million tons of carbon pollution throughout the region. That’s the equivalent of avoiding more than 150,000 homes’ electricity usage for one year.

This emissions-reduction and financial milestone is reflective of an important step toward a fully integrated western grid, a potential future in which the electricity grids of 11 western states could be linked together and provide customers in the region with $2 billion in savings per year, as well as enhanced reliability and reduced greenhouse gas emissions. A fully integrated western grid could build on the structure of the WEIM and offer increased coordination to provide the cleanest, cheapest, and more efficient power to the region, as well as long-term planning for the needs of the electricity system. As the incredible success of the WEIM demonstrates, with more integration, we can cut costs, boost the economy, and continue moving ahead with carbon reductions.