JUICE: Sailing to Grid Regionalization

11 Jun 2019

The announcement by California’s transmission operator that it will become the regional coordinator, not only in its territory, but across big parts of the western grid beginning July 1 generated few headlines. However, the California Independent System Operator becoming the new high wires reliability cop on the beat from Northern Mexico to Canada is a big deal.

The latest move is another significant step towards CAISO becoming a regional grid operator. Taking over the reliability coordination services from Peak Reliability follows the success of CAISO’s continually growing real-time western Energy Imbalance Market, which has created cost savings and improved use of renewables.

CAISO’s slow and steady sail towards an expanded footprint contrasts to previous efforts to become a western grid operator via legislation. It’s a welcome change after last year and the previous year’s attempt by Assembly Utilities & Energy Committee Chair Chris Holden (D-Pasadena) to ram through his regionalization measure, a politically fraught move given the complexities, unknowns and controversy.

Today, CAISO’s expansion is being driven by economics, not politics.

When announcing its new regional coordinator role as “RC West” last week, CAISO said it will bring at least a 50 percent savings in the cost of grid reliability services. As additional entities join, more savings are anticipated as the costs are spread over larger numbers of participants.

At the beginning of July, CAISO will handle coordinating and protecting the grids of 16 balancing authorities in place of Peak Reliability. In November, the number of participants is expected to rise to 40 after an expected 24 more balancing authorities join RC West. Together, they will represent nearly 90 percent of the electricity in the western interconnection.

The projected savings compared to Peak Reliability’s are attributed to CAISO’s ability to leverage “efficiencies from existing control room technologies, management staff and other necessary infrastructure,” the grid operator stated.

The cost savings are expected in spite of increased staffing to coordinate system restorations and outages and day-ahead operational and real-time assessments for its balancing areas, as well as ensuring compliance with national and regional reliability standards.

There are expected to be up to 55 new staff. That includes three regional coordination operators on day and night shifts, each with a section of the footprint–Northwest, California and Southwest/Rocky Mountain. There also will be an expansion of operations engineering staff to support outage coordination and day-ahead operations planning analyses and real-time operation shifts.

Looking at the bigger scheme of things, CAISO’s transition to a western grid is eased by the changing energy landscape. That includes the diminishing threat of coal-fired generation from cheaper and less polluting natural gas as California and other states move towards a carbon-lite economy. In addition, renewable mandates are becoming the norm across the West.

In late April, for example, Nevada’s governor signed into law legislation mandating that half the Silver State’s electricity is to come from wind, solar and other clean power by 2030.

“As efforts to increase regional grid coordination continue to grow and states and utilities become more comfortable with the CAISO’s operations, the prospects for a region-wide RTO will continue to grow,” said Carl Zichella, NRDC director of western transmission and a proponent of grid regionalization. He said that states now representing “the overwhelming majority of the region’s electrical load” are committing to a cost-effective clean energy future, which “make[s] formation of a regional ISO an increasing inevitability.”

Elizabeth McCarthy

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