Panel Hears Conflicting Views on Potential CAISO Expansion

After last year’s attempt to ram through legislation to unify the Western grid, the benefits and risks of expanding the California’s grid operator’s footprint were publicly debated by the Assembly Utilities & Energy Committee March 14.

The focus of the panel’s hearing was AB 813 by Assemblymember Chris Holden (D-Pasadena), committee chair. Last year, he unsuccessfully attempted to get the grid regionalization measure quickly passed at the end of the previous session.

Witnesses at this week’s hearing were divided on whether allowing the California Independent System Operator to expand across the West would give the Trump Administration additional tools to attack the Golden State, in particular its low carbon energy laws, policies and practices.

They also offered conflicting views on whether a Western ISO would bolster out-of-state coal power or curb it.

Matt Freedman, attorney with The Utility Reform Network, told the committee that regionalization would increase the risk of federal preemption, make California’s clean energy policies legally vulnerable and result in the state subsidizing coal imports.

He noted that Trump Administration has declared war on California.

“It is naïve to think they would take a pass on going after California clean energy leadership,” he said. “This is not your parents [Federal Energy Regulatory Commission].”

Jan Smutny-Jones, Independent Energy Producers chief executive officer, disagreed. He insisted regionalization would not subject California’s low carbon laws and policies to increased legal risks.

“Regionalization creates the potential to displace fossil fuel power in the West,” he said, adding that states with large coal-fired resources won’t get rid of the polluting fuel because California tells them to, but because there are cheaper electrons.

The Union of Concerned Scientists’ Laura Wisland agreed that coal power traded in a western grid would shrink in response to competition. She added that currently coal power comes into California as an “unspecified” resource. A western grid would make imports transparent, doing away with unidentified resources.

Since grid regionalization has been discussed, governance has been a thorny issue. Currently California’s governor appoints members to CAISO’s board and they’re confirmed by the state Senate. That would no longer be the cause in a western grid, though how that board’s members would be selected has been in flux.

The latest version of AB 813 by Holden would create a western states committee, with three representatives from each state participating in the western grid. It notes that the committee is to provide “input” to the ISO.

For Freedman that raises a red flag, essentially eliminating state control.

Assemblymember Bill Quirk (D-Hayward) did not reject TURN’s position, but noted that California is “an 800 pound gorilla,” given its size and load. Quirk contended that the state can maintain its greenhouse gas goals through 2050, plus protect jobs, if regionalization is done carefully and thoughtfully.

To avoid potential interference with California’s clean energy policies from a hostile federal government and or other states, smaller grid expansions were pitched.

John White, Center for Energy Efficiency & Renewable Technology executive director, urged lawmakers and CAISO to expand with the pro-clean energy states of Oregon, Washington, and Nevada.

Another focus should be to grow in-state participation in the CAISO market by including the Los Angeles Department of Water & Power and other munis.

TURN’s Freedman also called for CAISO to work more closely with the Bonneville Power Administration to increase trades with the hydro-rich utility, which supplies peak needs in its area in winter, when California’s power demand peaks in summer.

The success of CAISO’s real time Energy Imbalance Market was noted repeatedly.

Quirk asked if the EIM could be expanded into the day-ahead market. Mark Rothleder, grid operator vice president of renewable integration, said it could, but because it’s a voluntary market it would not provide the full benefits of a western grid. “There would be more reliable dispatch with regionalization,” he said.

CAISO urged acceptance of a formal expansion of its footprint for several reasons, including because the West’s wires and resources are already integrated. “The whole West is one big machine,” Rothleder noted.

The threat of other balancing authorities stepping in and creating a western grid, including the Southwest Power Pool, was also highlighted by grid officials.

Stepping back, CAISO's Rothleder pointed out that grid regionalization is just one strategy among several to make way for more low carbon electricity.

Witnesses also spared over whether regionalization would promote in-state renewable development and integration and lower costs or advance alternative power imports and raise rates for Californians.

Tony Braun, representing the California Municipal Utilities Association, said its members had different views on grid regionalization. But, he concurred with Freedman that any move to expand CAISO’s footprint should be slow. “It is a one way ticket,” he warned.

At the same time, regardless of a statutory regionalization, CAISO continues to expand. Braun pointed out the success of its growing Energy Imbalance Market and the grid operator’s move announced in January to become a western reliability coordinator . — Elizabeth McCarthy

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Panel Hears Conflicting Views on Potential CAISO Expansion

William J. Kelly

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