CAISO EDAM Accelerates Toward May Launch as APS Projects $110M in Annual Savings
The California Independent System Operator (CAISO) is finalizing preparations for the May 2026 launch of its Extended Day-Ahead Market (EDAM). A critical February analysis validated EDAM's dominance over the rival SPP Markets+ platform, projecting that Arizona Public Service (APS) will save $110 million annually by joining the CAISO structure. This cements CAISO's gravity across the Western Interconnection as utilities seek to share solar surpluses and battery capacity efficiently.
Executive Impact — C&I Buyers
- →Flattening the Duck Curve: As EDAM links California's massive midday solar surplus with neighboring states (like Arizona and Nevada), commercial buyers across the broader West will see depressed day-ahead wholesale prices during daytime hours as excess generation is exported rather than curtailed.
- →Rising Evening Spreads: While midday gets cheaper, analysts warn CAISO price spreads will increase significantly (projected $240-$270/MWh by 2030) as evening ramp-up requirements collide with new data center load across the West. Battery-backed C&I facilities will command massive premiums for discharging during these hours.
- →West-Wide Price Cap Rescinded: FERC recently rescinded the legacy West-wide wholesale electric price cap instituted during the 2000-2001 energy crisis. Without this hard ceiling, buyers exposed to real-time index pricing in the broader Western grid face renewed tail-risk during regional heatwaves.
The Battle for the West is Over
For the past three years, a quiet but intense turf war has waged across the Western United States. Unlike the East, the West (outside California) operates without a unified Regional Transmission Organization (RTO).
Two competing platforms emerged to optimize the day-ahead buying and selling of power between independent utilities: CAISO's EDAM (an extension of its successful real-time WEIM platform) and the Southwest Power Pool's (SPP) Markets+.
The February 2026 analysis regarding Arizona Public Service (APS) effectively calls the winner. By projecting $110 million in annual savings for APS under EDAM versus its SPP alternative, the mathematical reality of California's massive market footprint proved impossible to ignore. Because California generates so much excess, cheap solar during the day, neighboring utilities save massive amounts of money buying from CAISO rather than running their own gas plants.
How EDAM Works and Why it Matters
Currently, independent Western utilities must arrange for the next day's power deliveries across rigid, high-friction transmission borders. Starting in May 2026, EDAM allows scheduling coordinators across a vast geographical footprint (from the Pacific Northwest down through the Desert Southwest) to submit bids and offers into a centralized algorithmic market managed by CAISO.
This software will automatically find the absolute cheapest combination of generation across multiple states to serve tomorrow's load, factoring in transmission constraints. This maximizes the utilization of renewable energy that would otherwise be curtailed (thrown away) and reduces the need to burn fossil fuels.
The FERC Deregulation Signal
In parallel with the EDAM launch, the Federal Energy Regulatory Commission (FERC) made a historical move in February 2026 by formally rescinding the "West-wide wholesale electric price cap."
This cap, a relic of the infamous 2000-2001 California energy crisis (characterized by Enron's market manipulation), was deemed unnecessary. FERC argued that the transparency provided by these new organized day-ahead mechanisms (EDAM and Markets+) offers sufficient market monitoring capabilities to prevent a repeat of 2001. However, removing the hard cap places a renewed emphasis on active risk management for unregulated commercial buyers throughout the WECC footprint.
California Commercial Buyer Strategy playbook
- Exploit the Midday Trough: If your C&I facility in California, Arizona, or Nevada can shift heavy industrial processes (pumping, crushing, cooling) to the 10:00 AM - 3:00 PM window, EDAM will ensure that daytime index blocks become significantly cheaper than flat around-the-clock (ATC) blocks.
- Battery Incentives (SGIP): The State of California continues to push the Self-Generation Incentive Program (SGIP) precisely because the grid desperately needs load-shifting. Installing Battery Energy Storage Systems (BESS) allows you to charge during EDAM's cheap daytime exports and discharge during the expensive evening ramp.
- Demand Response Automation: A recent CAISO demonstration proved that AI data centers can respond to grid signals in under 20 milliseconds. As EDAM increases regional coordination, automated Demand Response (Auto-DR) programs will become highly lucrative for flexible loads in the West.
Connected Analysis
If your Western commercial facilities are struggling with high Time-of-Use (TOU) rates, review our analysis of the Recent SCE Commercial Rate Adjustments and learn how to optimize your operations using Behind-The-Meter Storage Technologies.
Source: California Independent System Operator (CAISO) Market Announcements; Federal Energy Regulatory Commission (FERC); APS Market Benefit Analysis.