State Officials Discussing Structure for Regional Grid Operator

State officials met to discuss the considerations for the development of a governance structure for a regional grid operator, which would manage the flow of electricity over a large interstate area.

The California Energy Commission and the Governor’s Office hosted Friday’s workshop, which was held at the California Environmental Protection Agency in Sacramento. Nearly 300 people attended the workshop, either in person or remotely by phone or web conference. The workshop provided a public opportunity to discuss various governance proposals that would transform the California Independent System Operator (California ISO) into a regional grid operator.

“In that transformation, it needs to respect California’s climate policies,” Energy Commission Chair Robert Weisenmiller said.

Senate Bill 350 provides for the evolution of the California ISO into a regional organization, but its governance structure would need to be modified. Transforming California ISO into a regional grid operation organization would help promote the development of regional electricity markets in the Western states. Such regional electricity markets may provide significant economic and environmental benefits, which will be explored in other SB 350 related forums.

The western Energy Imbalance Market is providing significant economic and environmental benefits. Earlier this week, the California ISO reported that the cost benefits of (EIM) were $18.9 million during the first three months of 2016, for total benefits of $64.6 million since launching in 2014.

The evolution into a regional grid operator could occur through additional transmission owners joining California ISO after approvals from their own state or local regulatory authorities. Government and industry leaders and other stakeholders in the western United States are looking at establishing a regional grid operator by expanding California ISO. PacifiCorp has signed a letter of intent to join the California ISO. Such an 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.

State officials said the conversation about a regional grid is an important one, especially as more renewable energy is being incorporated onto the grid.

“We’re in a tremendously transformative moment in the electricity sector,” said Energy Commissioner Karen Douglas.

The workshop included a background on the California ISO’s governance and corporate framework, white papers on regional ISO governance concepts, and a roundtable discussion on governance concepts.

Stakeholders are asked to submit written comments by May 20. More information about the workshop, including documents and presentations, can be found here.

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California Energy Commission

The California Energy Commission is the state's primary energy policy and planning agency created by the Legislature in 1974.
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