April 30, 2026, the successful launch of the Day-Ahead Market Enhancements (DAME) and the Extended Day-Ahead Market (EDAM). This transition represents the most significant shift in Western grid operations since the start of the Energy Imbalance Market (EIM), moving from a siloed approach to a co-optimized, multi-state day-ahead market. ZGlobal, as a scheduling coordinator for about 10,000 MW of load and resources in the western interconnection, participated in the successful launch. Our gratitude to CAISO Staff that have successfully met this challenge.
The “Day One” EDAM footprint covers California and the core PacifiCorp territories, creating a linkage between Intermountain wind/solar and California load.
• Active (Live Today): CAISO, PACE, PACW (Full price convergence and diversity benefits).
• Pending (Late 2026): PGE (Adding significant Northwest hydro/wind flexibility)
• Committed (2027-2028): BANC, IID, LADWP, PNM, NV Energy (Expansion of the market into the Desert Southwest)
The new market architecture fundamentally changes how resources are compensated and how transmission is priced.
• Price Convergence: Early data show LMPs in PacifiCorp and CAISO are converging during non-congested hours, as the $0/MWh transmission cost allows the most efficient resource to clear regardless of location.
• Transmission Access: Resources in PacifiCorp do not pay the CAISO Transmission Access Charge (TAC) or Wheeling Access Charges. Costs are recovered through the EDAM Access Charge (EAC), which is assessed to load, not generators.
• The Diversity Benefit: By pooling uncertainty across the West, the CAISO reduced total reserve requirements by approximately 15% (~600-800 MW) on Day One, lowering costs for all participants.
The EDAM/DAME has launched new market products where the market now procures two distinct capacity products (each in the upward and downward direction) designed to manage load and intermittent resources’ forecast uncertainty, mitigate the difference between cleared day-ahead market supply and demand and real-world needs, and protect against potential grid reliability events.
Reliability Capacity (RC) protects against uncertainty that threatens system reliability as a result of large net-load forecast errors emanating from renewable energy resource performance shortfalls or overperformance and unexpected load deviation from forecast.
Imbalance Reserve Capacity (IR) manages expected, routine forecast error and settlement period granularity differences between day-ahead and intra-day markets.
The addition of the two new products, RC and IR (where an appended letter U signifies Up and D signifies Down), monetizes the capacity needed for addressing the resource and load uncertainty, reduces the need to use ancillary services needed for grid reliability as substitutes for economic balancing, and makes the pricing for those services more transparent.
Here are my three favorite features:
- Existing CAISO Resources: No longer is there “free” Residual Unit Commitment (RUC) capacity. You can now bid into IR and RC categories. Even $0/MWh bids are clearing at positive prices due to opportunity cost co-optimization. Resources can now submit Economic Bids up to a $55/MWh cap for Reliability Capacity and up to a $250/MWh cap for Imbalance Reserves. These revenues are an added component to the resource’s revenue stack. These products do not change Resource Adequacy (RA) obligations. If your RA resource is on outage, you must still provide “RA Substitute” capacity to meet your obligation, or face RAAIM-like (Resource Adequacy Availability Incentive Mechanism) penalties.
- EDAM Resources (PacifiCorp): CAISO and PacifiCorp ratepayers enjoy access to a larger market. The resource’s competitiveness is determined by its marginal cost plus a greenhouse gas (GHG) price adder, without the burden of pancaked transmission tolls.
- Market Transfer: When a resource submits its bid in the Day-Ahead Market, the CAISO optimizer treats the transmission between PacifiCorp and California as having a $0/MWh usage fee. We don’t have to go out and “buy” a transmission path. If your bid is lower than the LMP (after accounting for losses and GHG), the market will automatically “schedule” the transmission. All resources get paid the LMP at the generator bus, and the loads pay the LMP at their load aggregation point (LAP). When energy moves between PacifiCorp and ISO, the “rent” collected from that price difference is used to offset transmission costs for the utilities involved. This ensures transmission is fully utilized and incentivized to keep those interties healthy and available.
By monetizing 15- and 60-minute flexibility through Imbalance Reserves and Reliability Capacity, the market is finally providing price signals necessary to integrate renewables at scale. The transition from bidding energy to bidding flexibility is the hidden benefit behind EDAM/DAME. By compensating resources for 15- and 60-minute readiness, the market ensures that renewable integration is handled through competitive pricing rather than manual intervention.