Special CUB Conference Preview – Californication: What Do ISOs And EIMs Have To Offer The Northwest
Posted on August 23, 2016 by Amelia Lamb
Tags, Conference & Events
As we reported on the CUB blog in July, PacifiCorp and the California Independent System Operator (CAISO) have proposed allowing PacifiCorp to join CAISO and reformulating it as a western regional transmission organization. Earlier this summer CAISO issued a governance proposal for the new regional ISO. CUB submitted comments criticizing the proposal, pointing out that there is no mechanism in the plan to ensure that residential customers have a place at the table, and consequently no guarantee that any savings the regional system creates will be fairly distributed. But what is the big deal anyway? Why is the CAISO expansion so contentious and what are its implications?
Established in 1998 and regulated by the Federal Energy Regulatory Commission, CAISO runs the transmission system and dispatches generation to meet load. Managing roughly 80% of California’s electricity flow, it is one of the largest ISOs in the world. PacifiCorp recently began participating in CAISO’s Energy Imbalance Market (EIM) which allows multiple power producers to sell energy to each other in real time and make more efficient use of their generating assets.
In contrast to California, the electrical system in Oregon and the Pacific Northwest is divided, with transmission lines owned and operated by individual utility companies. In fact, CAISO is the only ISO operating in the western region of the US. By joining CAISO, PacifiCorp would allow CAISO to control its transmission lines and dispatch its generating units. In theory, the larger footprint with more generating resources will allow for increased efficiency and reduce costs. At the same time, each of the six states that PacifiCorp serves will give up some control and oversight of the utility as CAISO decisions will be made by a new Regional ISO Board through a stakeholder process. The ultimate question is whether the benefits are real and whether they are great enough to offset the loss of regulatory oversight.
As more utilities are increasingly integrating intermittent resources such as wind and solar power, the prospect of savings from joining a regional transmission system has become more and more attractive, and the potential scope of such a system is massive, reaching north through British Columbia and Alberta, and east through Montana, Wyoming, Colorado, and New Mexico. NV Energy, Puget Sound Energy, and Arizona Public Service have already begun testing coordinated operations in preparation to join the market in October.
PacifiCorp is now looking to become the first non-California utility to become a full member of CAISO which introduces much more complexity in terms of governance and ensuring that transmission abides by regulatory law across state lines, and fairly allocating any savings that result. This is where Oregon utility customers come in (or rather, where they should be brought to the table).
Thankfully, California Governor Edmund G. Brown Jr. recently issued a directive to the CA Legislature not to rush legislation through the summer short session that would provide the framework for a regional governance structure. Unfortunately, the Governor’s announcement only pushed the timeline back to January 2017, which is quickly approaching.
In the midst of these rapid changes, the sixth annual CUB Policy Conference, The Future Starts Now, will broach the subject of CAISO’s regional expansion process with a breakout panel titled “Californication: What Do ISOs And EIMs Have To Offer The Northwest?” Contributing to the conversation will be Scott Corwin, Executive Director of the Public Power Council; Sarah Edmonds, Vice President & Legal Counsel at PacifiCorp Transmission; Ruchi Sadhir, Energy Policy Advisor to the Governor, State of Oregon; and Cameron Yourkowski, Senior Policy Manager at Renewable Northwest. Our moderator on this panel will be Jaime McGovern, Senior Economist at CUB.
“Californication” is just one of six breakout panels at the CUB Conference this year, all of which we expect will produce dynamic idea sharing and sharp debate. We’re previewing all six panels on the CUB blog over the next couple of months, so stay tuned for more information as October approaches. In the meantime, you can view the full agenda and register for the conference at cubpolicycenter.org/conference, and follow conference news on Twitter at #CUBCon16.
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12/27/16 | 0 Comments | Special CUB Conference Preview – Californication: What Do ISOs And EIMs Have To Offer The Northwest