4o. Energy Markets
Because electricity is difficult to store, it needs to be used as it’s generated. When a utility produces more electricity than its customers will consume, the excess electricity can be sold to neighboring utilities through energy markets. This pooling of generated electricity allows the utilities to operate as one system while reducing costs and increasing reliability.
In the United States, there are 10 main power pools, or energy markets. Energy markets include independent systems operators (ISOs) and regional transmission organizations (RTOs). Benefits to members include:
Shared Transmission
Transmission lines and facilities are shared between the market members. The cost of upkeep and construction are also shared.
Selling Electricity
If a utility generates more electricity than its customers need, the extra generation can be sold to market members.
Buying Electricity
If a utility cannot meet customer demand, extra electricity can be purchased from the market members.