California’s EDAM and the Future of Western Power

The California Independent System Operator (CAISO) is launching the Extended Day-Ahead Market (EDAM) in May 2026, which allows multiple western states to participate in California’s marketplace. This is critical to improving grid reliability, enhancing renewable integration, and reducing overall electricity costs across the Western Interconnection. 

CAISO is the grid operator that covers 80% of California and a small part of Nevada, managing nearly 26,000 miles of transmission lines, facilitating over 28,000 daily market transactions, and serving more than 30 million people. As an independent system operator (ISO), CAISO is a non-profit that does not own any generators but ensures the safety and reliability of bulk power transmission through its wholesale electricity market, ancillary service market, and energy imbalance market. Similar ISOs in the US and Canada include AESO, ERCOT, IESO, PJM, SPP, MISO, NYISO, and ISO-NE, each covering different regions. British Columbia does not have an ISO. Its electricity market remains regulated, with prices set by government agencies. This contrasts with deregulated markets, where prices are determined by supply and demand and often offer lower prices and more choices for consumers.

Before EDAM, CAISO had already launched the Western Energy Imbalance Market (WEIM), which extends beyond CAISO’s territory. Through WEIM, participants in neighboring western states such as Oregon, Washington, Utah, Idaho, and Wyoming were enabled to trade between balancing areas. Regional coordination creates significant benefits by lowering the reserves utilities have to carry, reducing carbon emissions, and enhancing reliability across electricity grids; the market has now surpassed $7.82 billion in cumulative benefits.

Similar to WEIM, EDAM is not restricted to CAISO’s territory. With EDAM, the annual operating savings for the West is estimated to be up to $543 million from reduced power production expenses, a 4.5% decrease from the current level, and an estimated 2.92 million metric tons of annual reduction in CO2 emissions. Earlier in September, California Governor Gavin Newsom signed Assembly Bill 825 into law with other energy-related bills designed to reduce energy costs in the state.