{"id":25638,"date":"2026-01-12T14:15:43","date_gmt":"2026-01-12T19:15:43","guid":{"rendered":"https:\/\/blogs.edf.org\/climate411\/?p=25638"},"modified":"2026-01-12T14:15:44","modified_gmt":"2026-01-12T19:15:44","slug":"western-electricity-markets-going-further-together","status":"publish","type":"post","link":"https:\/\/blogs.edf.org\/climate411\/2026\/01\/12\/western-electricity-markets-going-further-together\/","title":{"rendered":"Western Electricity Markets: Going Further, Together"},"content":{"rendered":"\n

\u201cIf you want to go fast, go alone but if you want to go far, go together.\u201d This perfectly captures the journey to standing up a West-wide electricity market. After years of collaboration, Western states are now closer than ever to a true regional electricity market that can deliver cleaner, cheaper and more reliable power. <\/p>\n\n\n\n

Background<\/strong><\/h3>\n\n\n\n

In September 2025, Governor Newsom signed AB 825<\/a> into law, creating a path to a regional electricity market governed by an independent board made up of members from across the West. It is a major step forward in a decade-long effort to integrate energy systems across western states and improve regional coordination.<\/p>\n\n\n\n

In December 2025, the Pathways <\/a>launch committee adopted a series of corporate documents to enshrine the Regional Organization for Western Energy <\/em>(ROWE), the new oversight body that will run the market envisioned in AB 825. Included in these documents were the ROWE\u2019s bylaws, which contain a suite of public-interest provisions<\/a> to ensure that the market will be the most transparent of any organized market in the country. To understand how far the West has come, it\u2019s helpful to reflect on how it all started.<\/p>\n\n\n\n

Electricity markets and the Western grid<\/strong><\/h3>\n\n\n\n

Unlike much of the United States, the electric grid across western states is not managed by a single market operator, commonly known as a Regional Transmission Operator (RTO) or Independent System Operator (ISO). Instead, 37 individual balancing authorities<\/a> match electricity generation to demand in their jurisdiction and build the infrastructure to both supply and deliver that power. Each of these entities is responsible for balancing grid supply with demand,  how much transmission infrastructure gets built and who they contract to buy and sell power from.<\/p>\n\n\n\n

The fragmented nature of the Western grid creates significant inefficiencies, increasing the cost of sourcing and delivering power throughout the region, making it harder and more costly to deliver power where it is needed in moments of grid stress. A regional electricity market can alleviate these inefficiencies by increasing coordination and reducing the cost of trading power across utility boundaries, enabling better coordination and data-sharing, and ultimately enabling entities to trade power more cheaply across the West. The geographic footprint of these balancing authorities is large enough that trades amongst them would enable an electric grid that is \u201clarger than the weather\u201d \u2014 meaning an extreme event in one balancing authority would not impact several others. A robust market to trade electricity could help out specific areas when there is an extreme weather event. And with the effects of climate change becoming more real, these extreme weather events are only more likely to occur in the coming years.  <\/p>\n\n\n\n

To help facilitate real-time trades of electricity amongst the different balancing authorities, the West created the Western Energy Imbalance Market (WEIM). Launched in 2014 and currently operated by the California Independent System Operator (CAISO), the WEIM is a real-time energy market. By pooling resources regionally, WEIM allows participants to access the cheapest energy available in real time, which is valuable during events when localized shortages occur. WEIM has been an all-around success since its inception, growing to include over 20 balancing authorities covering about 79% of the load in the Western Interconnection and delivering an estimated $7.4 billion in gross benefits<\/a>.<\/p>\n\n\n\n

CAISO is in the process of building on WEIM\u2019s success by establishing an Extended Day-Ahead Market<\/a> (EDAM), a forward-looking market where energy trading is done a day in advance and generation is committed to meet forecasted demand for the following day. This kind of early commitment can reduce prices, enhance reliability, and support more integration of renewable energy onto the grid. Analyses of the EDAM demonstrate major benefits<\/a> across the entire Western grid, in California<\/a> as a whole, and to individual utilities including PNM<\/a>, NVE<\/a>, PacifiCorp<\/a>.<\/p>\n\n\n\n

For deeper dives on the cost and reliability upside, including savings for utilities that join EDAM and the value of a unified West\u2011wide market, see our recent posts:<\/p>\n\n\n\n