ORIGINAL REPORTING: Western Regionalization Plan B: Utilities take an interim step to expand the grid

Western Regionalization Plan B: Utilities take an interim step to expand the grid; California lawmakers rejected the CAISO expansion so western participants are instead looking to evolve the energy imbalance market.

Herman K. Trabish, Oct. 30, 2018 (Utility Dive)

Editor’s note: The CA ISO continues to work with regional stakeholders to expand the day-head market.

California lawmakers in August rejected Assembly Bill 813, which would have expanded the California Independent System Operator (CAISO) by including other Western state representatives into its governance. California lawmakers were concerned this might compromise the state's clean energy goals. Policymakers and utility leaders in California, Washington, Oregon, Nevada and Arizona remain committed to developing some kind of regional cooperation and are discussing an expansion of CAISO's real time energy imbalance market (EIM) to its day-ahead operations. "Cautiousness in the West about these things makes evolution better than revolution," former California Public Utilities Commissioner Mike Florio, a leader in the new regionalization effort, told Utility Dive. While policymakers have struggled with regionalization, the EIM "has been quietly churning out savings and expanding collaboration and trust between participants," Florio said. "Now may be the time to expand the EIM to the day-ahead market, which has probably always been a more natural Plan B."

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The existing EIM is a real-time energy market in which Western utilities and CAISO exchange resources to meet demand that was not scheduled in the day-ahead market. Having real time visibility into supplies across an eight-state region allows participating utilities to balance fluctuations in supply and demand at a lower cost, according to CAISO. It also allows avoiding the costs of curtailment. Participants have saved a cumulative $401 million dollars for ratepayers since the EIM launched in 2014. Florio and others in California and across the West believe obstacles that blocked efforts to create a Western regional power market will not stop participants from realizing far more savings in a day-ahead EIM. Savings from increased efficiency in resource dispatch and sharing renewables could potentially multiply significantly since an estimated 95% of the present market volume is day-ahead activity. But reconsideration of existing transmission charges and bilateral contracts will be necessary to make the day-ahead EIM a reality. click here for more

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