The share of variable renewable energy resources such as solar and wind are increasing throughout the world to decarbonize electricity grids and mitigate climate change impacts. Although more immature as a technology and geographically limited, wave energy is an emerging renewable energy alternative that is more predictable than solar and wind, potentially posing fewer challenges related to intermittency. In this study, we investigate the benefits of wave energy in bulk power system operations. Specifically, we integrate varying capacities of wave energy to ten nodes (i.e., substations) along the coasts of Washington, Oregon, and northern California and analyze the benefits in terms of locational marginal prices and power system reliability (i.e., minimizing loss of load) throughout U.S. Western Interconnection under different scenarios. In order to model power system operations in U.S. Western Interconnection, we make use of a reduced order 134-node production cost model created with the Grid Operations (GO) framework. Our results indicate that after an inflection point in added capacity, wave power can significantly reduce wholesale electricity prices, especially in winter months, but the positive impacts remain geographically isolated to coastal regions due to inadequate transmission capacity. If wave power integration occurs with concurrent transmission expansion, economic benefits percolate further inland. We also explored the possible effects of wave power under major transmission contingencies due to wildfires and a historical heat wave event. Even though wave power reduces the frequency of loss of load events and suppresses locational marginal prices, the extent of the benefits depends on factors such as the distance between the affected area and wave power injection, and available transmission capacity. Seasonality in wave power may also reduce its benefits. For example, we find that the benefits of wave power would have been minimal during the August 2020 California heat wave, since wave power is a winter-peaking resource.