California's Independent System Operator (Cal ISO) is looking to become a regional leader in the energy market. In 2015, SB 350, the Clean Energy and Pollution Reduction Act of 2015 made Cal ISO into "a regional organization to promote the development of regional electricity markets in the Western states," the law states.
"This evolution could occur through additional transmission owners joining the ISO with any necessary approvals from their own state or local regulatory authorities. Such expansion of the California ISO will require that its current bylaws and corporate governance structure be amended and that the new structure be approved by the California Legislature," the law continues.
And now the Senate is considering AB 813, which would "authorize the ISO to develop and submit to the Energy Commission a governance proposal that complies with those requirements; require the Energy Commission, in consultation with the PUC (Public Utilities Commission) and state board, to review the proposal for compliance with the bill’s requirements; and, if the Energy Commission determines that the proposal meets those requirements and if a transmission owner from outside California that is not a participating transmission owner as of January 1, 2019, has entered into an agreement with the ISO indicating an intent to become a participating transmission owner, would authorize the ISO to proceed to implement the proposal."
This means integrating all California electrical transmission facility owners, retail sellers of electricity and local publicly owned electric utilities to be regulated by the Federal Energy Regulatory Commission and overseen by Cal ISO.
"A regional energy market would allow entities from outside California to join the ISO power grid as full Participating Transmission Owners (PTOs). The market would create a coordinated electricity system across the West, using the ISO’s infrastructure to develop one clean, reliable and efficient Western states grid. This market would find the lowest-cost energy, typically renewable, through a larger geographic footprint with expanded resources," says Cal ISO's fast facts page.
"A multi-state, regional electric market would provide environmental and economic benefits to California and the West, and yield significant cost savings to the state's electricity ratepayers," a news release said of Cal ISO's energy market study.
One of those environmental impacts could be reaching the state's renewable-energy goals.
The California Alliance for Community Energy opposes the bill because "CAISO regionalization is about changing the governance of CAISO. Rather than being governed by a California-appointed board, California would become a minority party in a large Regional Transmission Organization (RTO), an industry-run authority directly regulated by the federal government via the Federal Energy Regulatory Commission (FERC)."
The Southern California Public Power Authority (SCPPA) suggests a cost-benefit analysis before the bill becomes law.
"There are simply too many unknown components and variables – which, even if known, would be still difficult to control," SCPPA says. "The greater regional market touting advocates cannot feasibly measure California customer and ratepayer impacts without fully understanding these interactions."
