More green energy and lower prices are in store for California consumers, thanks to a recent agreement between the California Independent System Operator (California ISO) and PacifiCorp to implement an energy imbalance market by October 2014.

An energy imbalance market (EIM) allows PacifiCorp to balance electricity supply and demand by accessing the lowest cost power available anywhere in the ISO. The California ISO spans most of California and a small portion of Mexico.

Previously, PacifiCorp was unable to access power in all parts of its footprint (parts of Oregon, Washington, California, Utah, Wyoming and Idaho) let alone outside areas. Now, the utility can seek the cheapest generation from power plants across California and five other states. The larger geographic area translates into cheaper rates as electricity is dispatched more efficiently, congestion is reduced and the need for duplicate generation and transmission lines is avoided.

More generation choices also mean the grid can manage larger amounts of green energy like wind and solar, which have variable outputs that endanger the stability of the power grid. Instead of scrambling to keep up with weather changes using only one utility?s power plants, an EIM allows utilities to buy power in other places when the sun isn?t shining or the wind isn?t blowing. Likewise, the imbalance market allows a utility to sell excess power when an abundance of green energy is available.

History shows EIM?s leave both sides better off. The Southwest Power Pool, an energy imbalance market operated in Kansas, Oklahoma and six surrounding states, produced hundreds of millions of dollars in net benefits for consumers in the last six years. According to AWEA Manager of Transmission Policy Michael Gogg, implementing an Energy Imbalance Market across the Western U.S. will yield around $1.5 billion in net benefits over its first ten years.

By allowing participating utilities to share the generation they hold in reserve, it is easier and cheaper to continuously balance variable green energy and customer loads. This reduces the need for expensive construction of new plants, which translates into cheaper and greener electricity for consumers across the west coast.