Making Sense of Potential Western ISO Governance Structures: The Role of the States

Issue Brief
November 30, 2016

The benefits of creating a regional power grid operator among Western states are clear. Expanding the grid across state lines will save consumers billions of dollars, facilitate integration of high levels of wind and solar power, reduce the cost of satisfying environmental regulations and foster healthy competition in the power sector.

As several Western states consider formation of a regional grid operator, a key challenge has emerged: What role should states have in the governance of the regional grid operator?  How will the role of the Federal Energy Regulatory Commission change?

These issue briefs explore topics related to western regionalization. One brief examines the tools states have at their disposal to influence regional grid operations, drawing lessons examples from elsewhere in the country. The conclusion: There is no single answer, and states should consider the entire toolbox of mechanisms in determining whether they have adequate representation and protection.

The second Issue Brief explores what will happen regarding FERC’s role when it comes to western states that are vertically integrated (in other words, states in which utilities generally own all of generation, transmission and distribution assets and provide monopoly electric service to their customers). Specifically, what will be the impact of joining an ISO on states ability to influence and review their utilities investments in transmission infrastructure?