Courtesy of Arizona Public Service

Courtesy of Arizona Public Service

APS employees are constantly monitoring energy prices in the regional wholesale market to find the best deals.

Arizona is quietly joining a growing energy market that’s expected to eventually save customers of the state’s largest utility millions of dollars.

This weekend, Arizona Public Service (APS) entered the Energy Imbalance Market (EIM), which is operated by the California Independent System Operator and also includes utilities in Nevada, Utah and the Pacific Northwest.

The EIM allows utilities across the region to buy power from each other in close to real time increments of five minutes.

For example, on a cool, temperate summer day in the Pacific Northwest, energy demand might be down. Meanwhile, Phoenix could be in the triple digits with customers cranking up their air conditioners. Brad Albert, who is director of resource management at APS, said that creates an opportunity for APS to buy cheap surplus power.

“That diversity across the regional footprint is really what can drive significant cost savings,” Albert said. “We can then utilize that to offset what might be more expensive generating units that we would have otherwise had to use.”

APS is already buying and selling power across the region, but until now the utility could only buy an hour in advance. This new market allows APS to more closely align these transactions with actual customer demand.

A study by the utility estimates participating in the EIM could ultimately save $7 to $18 million dollars a year.

Albert says the EIM also helps utilities better manage the variability of renewable energy sources. For instance, when a cloud passes over a solar farm, the output can drop quickly.

“The EIM is a great tool to have to enable us to balance our supply and demand situation with all the other entities in the region to manage those ups and downs,” Albert said.

APS joined the market at midnight on Friday, along with Puget Sound Energy in Seattle.