Given the development of two different day-ahead markets in the West, there has been a lot of talk and speculation on market seams. While the West already manages a significant number of seams, it does not have a lot of experience managing seams between organized markets. Because of this, Public Generating Pool and Western Power Trading Forum decided to partner together, along with Energy Strategies, to develop information for its members and the stakeholder community on the types of tools used to manage seams in other parts of the country and whether and how those tools may be applied to seams between day-ahead markets in the West. This work is intended to provide a framework for understanding seams and is not intended to convey a position about how the West should proceed in its market development. Ultimately, what we learned is that, while seams issues are manageable and many tools exist to enable greater efficiency across market seams, those tools were developed in the context of fully integrated RTOs and not in the context of day-ahead markets only. Therefore these tools, while instructive, may not necessarily be directly applicable in the context of where the West is currently in its market evolution. The study also highlights several potential seams issues that are outside of the economic seams managed by the RTO toolkits, but that are nonetheless important considerations for the West as we envision a two-market future. Our seams exploration is a starting point for understanding the potential seams and seams issues that we might expect with two day-ahead markets and can serve as a launching point for more detailed discussions as more about the nature of the actual seams become known.
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