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Expansion of CAISO footprint viewed as perfect scenario for 'IT solution'

Expandingthe California ISOfootprint to include more of the western U.S. could bring more systemefficiency and benefits to customers, a Berkshire Hathaway Energy official said.

Duringthe Bloomberg New Energy Finance summit in New York City April 5, JonathanWeisgall, vice president of government relations at Berkshire Hathaway Energy,pointed to the company's MidAmericanEnergy Co. utility in the Midwest as a good example of the benefitsof being a part of a regional transmission organization.

Bynext year, MidAmerican will be at 57% retail sales of wind, he said. If Iowawere a balancing authority of its own, it would be very hard to have that kindpenetration of renewables. But because MidAmerican is part of the , when the utility's 4,000 MW of wind is not blowing, it canbuy into the grid operator's market.

Outwest, home to Berkshire Hathaway Energy's PacifiCorp and NV Energy Inc. utilities, it is a different story, with38 separate balancing authority areas. "To call it Balkanizedis almost to insult Macedonia," Weisgall said. "It's a JacksonPollock painting here with 38 separate bus drivers driving a bus. They're allconnected physically, but they're not connected commercially."

TheBAAs all have hour-ahead markets and have to match supply and demand, do transmissionplanning on their own, and meet NERC requirements. "It's an incrediblyinefficient way to run a bus," Weisgall said.

Formationof the energy imbalance market between the California ISO and PacifiCorp wasdone primarily for more efficient dispatch and customer savings, he said. TheEIM went live in November 2014, with NV Energy joining in December 2015.Weisgall said 14 months of EIM participation has brought more than $40 millionof customer savings, enhanced reliability and more efficient use of renewables.

More are joining the EIM

utilityPuget Sound EnergyInc. and PinnacleWest Capital Corp. utility Arizona Public Service Co. are expected to join the EIMon Oct. 1. Portland GeneralElectric Co. has announced plans to participate in October 2017.IDACORP Inc.subsidiary Idaho PowerCo. on April 6 said it would join the EIM in April 2018.

"Thatbegins to look like an RTO. That's really the next step," Weisgall said.

PacifiCorpand CAISO in April 2015 signed a memorandum of understanding to explore theutility becoming a participating owner within the grid operator's footprint.The move could mean even more efficiency and could bring potential benefits inthe billions, he said.

"California'sgot issues with over-generation of solar, and this is the perfect synergy wherethat over-generation in California that would otherwise be curtailed can bepicked up in a bigger market," Weisgall said. "So this is not rocketscience, it's kind of an IT solution."

CAISOboard member Angelina Galiteva said California can easily meet its 50%-by-2030renewable portfolio standard. "It's a lot easier to meet that goalreliably, affordably and cost-effectively if you integrate and you have a widerregional footprint," she said.

Weisgallsaid the key issue is what's best for customers. "If you candeliver electricity for your customers at a lower cost, that's your goal,"he said. Picking up a megawatt-hour of solar from California that otherwisewould be curtailed is one megawatt that does not need to be dispatched from thePacifiCorp system, Weisgall said.

Galitevasaid integration will mean more regional coordination and regional dispatch,which will pick up the most efficient units, which are usually renewables. Inthe middle of the day, they are the lowest-cost, she said. "Soyou're seeing … probably an accelerated retirement of the more inefficientunits that are actually too costly to run because we've got cleanertechnologies that can replace them very, very efficiently," she said.