ORIGINAL REPORTING: California's dream of a regional power market (deferred again)

California's dream of a regional power market faces the risks of a Trump FERC; Can a proposed regional plan’s protections for state policy be trumped by federal authority?

Herman K. Trabish, March 20, 2018 (Utility Dive)

Editor’s note: AB 813 did not get out of committee in the recently completed California legislative session. Supporters say it will be brought back in January and argue the state’s new 100% by 2045 zero emissions goal cannot be reached without a regional grid.

Opponents of the California grid operator’s ambition to expand its market across the West fear the state's energy and environmental priorities could collide with a conflicting White House agenda. Supporters, including several environmental advocates, say it would expose California to no more risk of federal control than what the California Independent System Operator (CAISO) is now subject to. Some stakeholders have suggested a middle ground is available through an expansion of the voluntary CAISO energy imbalance market (EIM), which now serves portions of eight states and is rapidly adding to its six utility participants. EIM-member utilities outside California support the CAISO effort. A regional power grid market could generate $1 billion to $1.5 billion in annual benefits to California ratepayers, recent studies for CAISO have found. It could also, by 2030, provide between 9,900 jobs and 19,400 jobs throughout the West, reduce California greenhouse gas (GHG) emissions 8% to 10%, and reduce Western region GHG emissions 3% to 4%.

click to enlarge

Opponents are skeptical of the forecasted benefits and argue regionalization would make California’s hard-won climate goals vulnerable to other states’ dirtier power mixes and make California vulnerable to the authority of the Trump-appointed Federal Energy Regulatory Commission (FERC). Proponents respond California is now subject to limited FERC control and argue provisions in the new version of AB 813 — legislation to expand the grid — will protect CAISO independence. Currently, the California grid operator oversees 26,000 miles of transmission and a $10 billion-plus annual market that delivers 80% of the state’s electricity. Opponents are concerned that expandiing it into an integrated western states transmission system and marketplace moves protections of California climate and environmental values away from the governor-appointed, state Senate-confirmed CAISO board. Proponents say the increased availability of low-cost renewables in the regional market would expand the impact of the market forces that are already driving Old Energy out… click here for more

click to enlarge

Tweet