Calling the California ISO's transformation into a regional grid operator for the Western U.S. "the most important opportunity before us to achieve California's renewable energy, climate and clean energy ambition," a director of the Natural Resources Defense Council's energy program made an impassioned plea on April 5 for state lawmakers to "issue an invitation" for the ISO "to be joined by anyone who wishes, anywhere in the West, to move in the direction of a transition toward a fully integrated Western grid, with all the associated reliability, economic and pollution reduction benefits."
An ISO-commissioned study last July identified widespread operational, environmental and economic benefits from merging the ISO with the transmission assets of Berkshire Hathaway Energy subsidiary PacifiCorp by 2020, and ultimately expanding the regional grid's footprint across all 38 balancing authorities in the Western Electricity Coordinating Council by 2030. In order for that to happen, California must first pass a bill allowing the ISO to reorganize its governing board into an independent entity, rather than one appointed by California's governor and confirmed by the state Senate.
So far, however, lawmakers have balked, delaying action both this session and last session, over concerns ranging from the forfeit of state authority to whether the "regionalization" of the grid might work against California's emissions reduction and renewable energy targets.
Speaking at the Energy Times' "Renewables Rush" conference in San Francisco, NRDC's Ralph Cavanagh said the ISO's current "last-resort" curtailments of renewable generation, the result of this spring's energy glut and negative prices, were the "blinking yellow light on the dashboard of the California ISO," and were "the most vivid indication" of "grid Balkanization." Citing a recent ISO forecast that it may need to cut as much as 8,000 MW of the approximately 10,000 MW of wholesale solar capacity on its grid to manage midday oversupply this spring, Cavanagh cautioned, "We are curtailing 80% of it during some hours. We should not be doing that. We should be pushing that renewable energy out across the Western system."
Last week, Cavanagh was joined by representatives of the Solar Energy Industry Association, SunPower Corp., the Union of Concerned Scientists, the Independent Energy Producers Association and other groups in signing a letter to Gov. Jerry Brown, Assembly Speaker Anthony Rendon and Senate President Pro Tempore Kevin De Leon encouraging legislative action. "Doing so will expand our clean energy markets and grow our clean-tech sector, while also improving reliability and reducing costs for electricity customers across the West," they wrote. "It will also save Californians billions of dollars over the next two decades in reduced electricity bills."
But Edward Randolph, director of the California Public Utilities Commission's energy division, was reluctant to endorse the idea during a panel discussion at the Energy Times event. "There clearly could be some benefits, from a cost perspective and integration of resource perspective, to have more regional diversity," said Randolph, adding, "Some question, 'Are we getting most of the benefits from the [energy imbalance market], and should we stop there?'" Moreover, the CPUC energy division director expressed concern over relinquishing California's "resource choices" to the FERC. "The more regional we get, the more FERC is going to pay attention to our resource choices," he said.
NRDC's Cavanagh, however, countered that just the opposite was the case. "If you are worried about Donald Trump's FERC, and you probably have some reason to be, [leading] with a target that has California written on its back is the best way I know of to invite unwelcome inference. Moving to a regional system is the best way I know to deter unwelcome interference." But he said the issue actually was moot "since FERC has no jurisdiction over generation." While conceding there were "many things to worry about" in transitioning to a regional grid, Cavanagh argued, "worrying about FERC interference is not something that should be holding us back."