Executive SummaryOur analysis considers several alternative forms of an energy imbalance market (EIM) proposed in the nonmarket areas of the Western Interconnection. The proposed EIM includes two changes in operating practices that independently reduce variability and increase access to responsive resources: balancing authority cooperation and subhourly dispatch. As proposed, the EIM does not consider any form of coordinated unit commitment; however, over time, it is possible that balancing authorities would develop formal or informal plans to coordinate unit commitment. As the penetration of variable generation increases on the power system, additional interest in coordination would likely occur. Several alternative approaches could be used, but consideration of any form of coordinated unit commitment is beyond the scope of our analysis. This report examines the benefits of several possible EIM implementations-both separately and in concert.We calculated the need for flexibility reserve for several EIM footprints. This flexibility reserve requirement was estimated using a National Renewable Energy Laboratory method adapted from the Eastern Wind Integration and Transmission Study and is separate and distinct from contingency reserve requirements. The technique uses statistical analysis of simulated historical wind and solar generation to estimate reserve requirements at periods faster than the dispatch interval (regulation) and slower requirements (additional spin and non-spin reserve resources beyond what is needed to satisfy the contingency reserve requirement) to follow longer unforecasted changes in variable generation output. The additional flexibility reserve requirements are physically similar to, but distinct from, the existing reserves that are already required for regulation and contingencies. Each of these reserves is calculated for each hour of the year to create a dynamic reserve that can be deployed to manage forecasting errors over various time scales. Because this report assumes that contingency reserve obligations do not change with the increased use of variable generation, our discussion focuses on additional flexibility reserve throughout. Therefore, any reference to terms using spin or non-spin apply only to flexibility reserves that can be either spinning or non-spinning resources above and beyond what is needed to satisfy existing contingency reserve obligations.We used wind data developed for the recent Western Wind and Solar Integration Study, which was managed by the National Renewable Energy Laboratory on behalf of the U.S. Department of Energy [1]. Solar data were developed by the National Renewable Energy Laboratory for the Western Electricity Coordinating Council (WECC) Transmission Expansion Planning Policy Committee (TEPPC) 2020 planning case. The scenario is defined by the TEPPC 2020 Planning Case 0, which includes approximately 8% wind and 3% solar penetration in the Western Interconnection. Although this study used the TEPPC database, it is not associated with the TEPPC process....