Legislation boosting RPS in California could expand California ISO footprint

California ISO

Legislation approved in California this month to boost the state’s renewable portfolio standard to 50 percent by 2030 contains a provision requiring the California ISO to prepare to become a regional grid operator.

The legislation, SB 350, which Gov. Edmund Brown Jr. is expected to sign, calls for the California ISO to prepare governance modifications to aid the transition to a regional grid operator, such as entering into compacts with states within the Western Electricity Coordinating Council (WECC), allowing the California ISO to be similar to PJM Interconnection and ISO New England.

Currently, the California ISO board is appointed by the governor and confirmed by the state senate.

California ISO has experience with a governance change, having modified the governance of its energy imbalance market as utilities in other states have joined or committed to join the EIM.

That change in governance for the EIM, which was approved by the California ISO board Sept. 17, took quite a while, and sources said similar changes to the California ISO itself would take several years. For one thing, lawmakers that crafted the legislation included allowing the legislature to have final say on any plan to expand the California ISO’s reach.

Any measure that goes through the California ISO board would go back to the Legislature for lawmakers’ approval, a California ISO spokesperson told TransmissionHub. The legislation creates a path for the California ISO to move toward becoming a multi-state ISO, and the California ISO has been working on a regional market to address the state’s ambitious clean energy goals, the California ISO spokesperson said.

In a statement outlining the benefits of a regional market, the California ISO said such a market “would coordinate electricity systems across the West, using [the Cal-] ISO’s infrastructure to develop one clean, reliable and more efficient western grid. The western regional energy market would be designed to increase renewable energy supply, while creating disincentives to send coal-generated energy to California.”

A regional market would adhere to California’s cap-and-trade laws on energy entering the state, the California ISO said.

That last element may address concerns of renewable power groups, who have expressed anxiety about coal-fired generation from some states being sent to California under a broad regional market.

A wider energy market in the West operated by the California ISO also would include a broader mix of renewable resources across the region and provide benefits by allowing the export of unused renewable power throughout the region, the California ISO said.

When PacifiCorp joined the EIM, it expressed an interest in having California ISO expand its grid operations beyond the state, and since then, the concept of a broader California ISO footprint has been debated.

The Bonneville Power Administration is aware of SB 350’s passage and has been monitoring its progress through the Legislature, a BPA spokesperson told TransmissionHub Sept. 23.

“At this time, BPA does not have a formal position on SB 350,” he said. “We continue to be engaged in regional discussions related to the interconnected Western electric grid,” after having worked with PacifiCorp to enable participation in the EIM, the BPA spokesperson said.

Officials with the Northwest Power Pool, which has been working on its own form of a regional market with participation by utilities in the region, and WECC were not available to provide comments to TransmissionHub by press time. Regulators in neighboring Nevada have not discussed the issue at an open meeting, and commissioners at the Nevada Public Utilities Commission and a few other states were not available to comment on the plan.

The Solar Energy Industries Association supports the concept of a larger California ISO, as there can be benefits from broader integration of renewable resources in the region, Sean Gallagher, vice president of state affairs for SEIA, told TransmissionHub Sept. 22. SEIA will work with California ISO stakeholders to expand the California ISO reach, but it will take some time to reach a conclusion, Gallagher said.

SEIA also praised the legislation for boosting the RPS to 50 percent, which may drive more transmission development to aid integration of renewable resources, Gallagher said.

Conversely, if net metering provisions are adopted and California enhances rooftop solar and distributed energy resources, there may be less need for transmission to move power from renewable resources long distances, he said.

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