Although about 70% of the electricity in the U.S. moves through organized power markets operated by regional transmission operators (RTOs) and independent system operators (ISOs), about one-third of the electricity demand is served outside of RTOs and ISOs, primarily in the Southeast and the West (Figure 1). Some utilities outside RTOs/ISOs are part of energy imbalance markets (EIMs), which allow utilities in these regions to participate in real-time trading with other participants overseen by a market monitor. In an EIM, an RTO or ISO handles market operations, but the utilizes retain control. Both operational EIMs[1] in the U.S. are located in the West.
In recent years, there has been an increased focus on setting up an RTO or EIM in the unserved parts of the West and the Southeast because they can offer many benefits to the regions that they serve. For example, RTOs/ISOs can plan regional transmission to realize a more efficient outcome to accommodate future grid needs. RTOs also allow independent power producers, new technologies, and customers to participate equally and are relatively transparent to stakeholders. In the Southeast specifically, which has some of the highest electricity costs in the country, there have been some studies exploring the benefits that an RTO model may bring, and more recently, an organized market called the Southeast Energy Exchange Market (SEEM) has been proposed.