CAISO: The Crayon Version

Although interim California Independent System Operator chief executive officer Marcie Edwards comes from an operations background, she has the air of a politician. She says the grid operator isn?t supposed to be a political decision maker but is also well aware that keeping the lights on has as much to do with influencing constituents and keeping them happy as it does with delivering electrons. Unlike her predecessor, Terry Winter, who drew the wrath of some legislators for keeping the lights on at any cost, Edwards is already busy making nice with politicians. She says she?s striving for the simplest way to convey to policy makers complicated engineering and real-time market schematics for electricity delivery. Just after speaking with Circuit this week, Edwards was off to talk to energy legislators at the Capitol. The following day, she convened a ?stakeholder summit? to lay out what is developing with the grid operator beyond market redesign under her new, supposedly temporary reign as interim CEO. Edwards isn?t exactly carrying around a coloring book in her briefcase, yet her idea to communicate with some constituents is what she calls the ?crayon version? of the arcane tasks the grid operator performs; that is, using-lower-common denominator words that the public understands?such as ?new power plants? or ?new transmission lines? instead of ?reliability.? That translation is what the grid operator board has been pleading for. ?Forty percent of what I do is force something into the ?crayon version,?? she said. Edwards comes from a municipal power background as former bulk operations manager of the Los Angeles Department of Water & Power and, more recently, Anaheim general manager. She lands at CAISO at a time when munis have deserted, and are looking to desert, the grid operator?s system for their own control zones. Edwards is in the position of trying to keep more munis from defecting and wooing back the ones who split?as well as welcoming new munis. Munis are suspicious of the grid operator because under CAISO, they are subject to ever-changing tariffs and grid charges and turning over their independence to a single grid operator. Edwards says she understands the problem but doesn?t yet know how it can be fixed. With municipal utilities, such as the Sacramento Municipal Utility District and the Western Area Power Administration, ?long-term certainty is a critical requirement the ISO has to figure out how to meet,? Edwards said. ?It?s difficult to link muni issues with ISO issues. They?re used to a 30-year contract paradigm. They want durability and the ability to predict circumstances?generators do, too.? With more than 50 tariffs filed with the Federal Energy Regulatory Commission?an ever-changing bout of requirements that seems to be never-ending to the grid operator?s clients?munis would rather escape the unstable unification offered by CAISO and go it on their own. Last month, the Western Area Power Administration said it would pull out from CAISO?s control and join with SMUD at the end of the year. SMUD left CAISO in June 2002. To begin to address munis? and generators? need for more certainty, CAISO is talking with FERC on an informal, ?brainstorming? basis about how to create a platform that doesn?t change with great regularity, Edwards said. ?We?re looking into freezing portions of tariffs. These agencies can?t stand repeated change, so we?re looking at a component of a tariff to be frozen? for some period of time, she said. In addition to trying to steady the tariff boat, Edwards is attempting to open the agency to what she calls ?information provisioning??publishing operational and marketing information for which generators have been clamoring. ?Everybody asks all the time?where are the loads going in? What will they be in two years?? she said. ?We want to have an ability to project conditions and likely circumstances, to accumulate and dispense valuable information.? Getting out this information, not just to market participants but to regulators and other agencies, isn?t simple. Some information is protected by federal regulators. Other agencies, such as the California Public Utilities Commission, spend years on what used to be integrated resource planning to provide and predict similar information. In addition to trying to create some stability by settling down tariffs and providing planning information, Edwards wants the grid operator to have a greater role in transmission advocacy. And if timing is everything, the agency just might be able to nab more transmission authority to pave the way to achieving CAISO?s mission?getting the electrons to where they are being used without fear of blackouts. Of course, more transmission means more lines under CAISO control. Some say that makes for a more efficient grid; others say it smacks of empire building. The California Energy Commission (CEC) endeavored to grab the transmission siting mantle from its more traditional owner, the CPUC. But the state administration?s bid to redesign energy agencies, made public two weeks ago ( Circuit , August 6, 2004), would put the CEC under a new agency. Energy advisers in the administration know that new transmission is critical and are just as aware that the CPUC has taken more than its own sweet time to decide on new projects. Edwards swears, however, that the grid operator wants to have its share of input but not be the final decision maker for new transmission projects. ?We know many reasons why transmission hasn?t been built. We don?t take positions, but we want to inform decision makers of potential ramifications of different decisions,? she said. However, Edwards seemed to leave open the possibility that if pressed into service, the grid operator could suffice in case of a decision-making vacuum. ?There?s a critical need for public process,? she said. ?There?s a social and environmental balancing act conducted by those agencies that we don?t necessarily do. We don?t see that as our role.? Clearly, though, Edwards wants to showcase CAISO?s transmission talent?there?s a whole CAISO arm that few have heard of outside the agency that is trying to figure out ways to increase transmission capacity without building those difficult-to-site new lines. ?We?re evaluating technology, fleshing out the ISO?s role. It?s not just keeping the lights on, but advancing transmission and furthering the technology that allows for that,? she explained. ?My challenge is that we need to start narrowing down what we want to be and to whom,? Edwards continued. ?It ties back to information provisioning and the desire for certainty, durability, and predictability.?

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CAISO: The Crayon Version

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