Climate action and expansion of renewable energy is currently being held back by the inefficient patchwork of how transmission grids are managed across the west. In order to meet the ambitious climate and clean energy targets of California’s landmark programs, we need to take clean energy to scale. California lawmakers face a major choice in the coming days: give the California Independent System Operator (CAISO) a chance to become a full-fledged western regional grid operator or keep the balkanized, polluting grid management system, currently in place.
Opponents raise the fear that this change would allow other states or the federal government to increase influence on California’s energy future, and that the change will somehow harm disadvantaged communities in California. These claims are not supported by the evidence. NRDC would not be working with a broad coalition to support this bill (AB 813), if any of that were true.
The California Independent System Operator (CAISO) is the manager of most of California’s transmission grid, over which electricity flows to our homes and businesses. A Senate committee tomorrow will be considering a bill to allow the CAISO to work with our neighbors in the west to oversee transition to a full integration of the western grid.
Other climate leaders in the west are eager to work with California on a regional electrical system that supports their clean energy resources and provides affordable access to ours. By helping each other out in this way, California can take better advantage of the region’s clean energy. For example, instead of running gas plants here to take up the slack when the sun goes down when California needs to meet its evening peak energy use, renewable power from other states could take up the slack. This makes for a cleaner, cheaper, and faster transition to a decarbonized energy future and will help California to meet our climate goals.
Below is NRDC’s response to questions being raised by opponents of regionalization. California stands to benefit enormously by coordinating with our neighbors in an energy market that facilitates clean energy.
- Would western grid integration undermine California’s clean energy laws and policies?
No. An expanded California Independent System Operator (CAISO), covering more of the West, like all organizations doing business in California, would be bound by California laws. No state clean energy requirements would be eliminated. ISOs are policy takers, not policy makers. They must comply with the policy choices of the states they serve. AB 813 addresses this concern by requiring the withdrawal of California utilities if the expanded CAISO fails to observe state policies.
- Would western grid integration mean more reliance on out-of-state renewable resources and less renewable production in California, diverting investment that would benefit disadvantaged communities?
No. Electricity markets are a two-way street. California could import low-cost renewable energy when it is plentiful elsewhere and sell our excess to other states, helping manage costs, especially important to low income communities. State studies recently concluded that access to lower-cost surplus renewable energy from around the West creates an economic magnifier effect that will reduce electricity bills for all Californians
- Would western grid integration eliminate CAISO’s accountability to the California legislature and risk attacks on state policies?
No. Like any other organization in California, a Regional System Operator must obey all California laws. Grid integration allows for sharing of regional energy reserves, avoiding the need for duplicative power generation. And AB 813 retains California’s right to withdraw our utilities from a regional transmission organization, as the ultimate measure of accountability.
- Would western grid integration increase the likelihood of federal preemption challenges to California’s energy procurement and resource planning policies?
No. The risk of federal preemption to California’s policies is not affected by expansion, as legal analyses from Yale University’s Environmental Protection Clinic and prominent California legal experts have shown. California’s ISO is already subject to federal regulation, and enhanced grid integration will not change the nature or scope of that oversight.
- Can regional transmission organizations (RTOs) ignore state recommendations?
No. States have an influential voice in RTO decisions. When there are disagreements, they can petition for review by FERC and the courts. Most disagreements elsewhere in the nation, including a well-publicized pricing debate in the Northeast, have involved capacity market issues, which consistent western state policies and AB 813 would prevent from ever arising.
- Would a regional transmission operator supersede state resource adequacy standards and undermine traditional state authority to establish rules to determine long-term needs and how renewable generation, demand response, and energy efficiency can meet those needs?
No. Every western state insists on maintaining its right to set its own resource adequacy standards. Grid integration will leave resource adequacy decisions up to the states participating in a regional transmission organization. AB 813’s criteria for allowing a California utility to join a regional system underscore this point.
- Are there other alternatives that would make regional integration unnecessary?
- Expanding the Energy Imbalance Market (EIM)
This is already under consideration by the ISO and is not an argument against ISO expansion or a substitute for it, because the EIM by itself does not reduce the severe western grid fragmentation that is the source of much of the unnecessary costs, pollution, and reliability risks.
- Coordination with the Bonneville Power Administration (BPA)?
This coordination has occurred for years and continues to improve. It does not substitute for or argue against western grid integration, which facilitates more robust coordination with all western utilities.
- Taking steps to enable greater exports of surplus in-state renewable generation?
This is a core benefit of regional expansion. The best way to increase export opportunities is to consolidate the 38 balancing areas (BAs) in the West and eliminate the piling up of transmission access charges each one currently levies on every energy transaction. An expanded ISO would accomplish this. Short of expansion, little additional capacity can be wrung from a grid that is congested by a welter of bilateral deals reserving transmission rights, as Western Electricity Coordinating Council (WECC studies) have previously shown. Expansion allows operators to use the grid more to its full capacity, reducing the need for additional transmission lines.
- Work with other western BAs to reduce barriers to exporting excess power produced by in-state renewable resources?
This is not an alternative to regional grid integration but one of the reasons it is needed. We already coordinate with all western BAs on reliability (including those in western Canada and northern Baja California, Mexico) and the constraints in the system are relatively well known, constantly studied, and understood. The EIM and the expansion of the ISO were proposed in part to address the barrier issues. ISO expansion is the most effective way to reduce barriers and help us meet climate goals in a cost-effective way as the SB 350 studies and system analysis have shown.