It's a marathon, not a sprint

California's legislative session is always a marathon, and the Pathways bill is making slow but steady progress. After months of work, SB 540 has cleared two major hurdles, advancing through both of its Senate policy committees. Moving major legislation like this takes persistence and the progress so far is a testament to the broad momentum behind the effort. More on what lies ahead below.

Leah Rubin Shen, Managing Director at Advanced Energy United

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Pathways Initiative Updates

California Legislation

Last week, SB 540 achieved its first milestone win, passing the Senate Energy, Utilities, and Communications committee unanimously. The bill's authors, Senators Becker and Stern, emphasized the urgency of creating a voluntary, independent regional organization (RO) to oversee EDAM and help California access more clean energy, while maintaining control over its own policies.

Yesterday, the bill passed through the Judiciary committee 11 to 0. Amendments adopted in committee to respond to concerns raised by some stakeholders aim to provide additional safeguards to preserve control over resource adequacy planning and reliability standards, guarantee California utilities can withdraw from the regional market without penalty, and address concerns over federal overreach. In response to concerns about federal overreach, including the risk of a hostile FERC under the Trump Administration, it is worth noting that SB 540 has the potential to strengthen both California and the West's position by building a broader, state-driven coalition in support of a market that ensures that participating states retain control over decisions about their energy policies.

Senators Becker and Stern also made commitments to continue to work with stakeholders as the bill moves forward. SB 540 will now move to the Appropriations Committee, where it will be heard sometime in May.

FERC Approves Pathways Step 1 Proposal

Earlier this month, the Federal Energy Regulatory Commission (FERC) approved a key tariff amendment supporting CAISO’s implementation of the “West-wide Governance Pathways Step 1” proposal. As a reminder, this change creates a shared governance approach for the Western Energy Markets (EIM and EDAM) by allowing the CAISO Board of Governors and the Western Energy Markets Governing Body to both submit alternative market proposals to FERC if there is a conflict.

Stakeholder Engagement Updates

The Pathways Initiative Launch Committee held a stakeholder meeting last week. The meeting provided an update on the Formation Board, clarifying that this body will have no decision-making authority and will only be used for the purposes of incorporating the RO. The rest of the meeting was spent on a “Sector Readiness Workshop,” which provided information to participants on how to organize a sector and the role and responsibilities of a sector liaison. If you missed the meeting, you can catch up with the slides and recording.

The next stakeholder meeting will be held on May 30 from 10:30 am to 12 pm PT/11:30 am to 1 pm MT.

ICYMI:

CalCCA and CA Enviro Voters co-hosted a webinar on SB 540 this past month, featuring labor and enviro panelists. You can see the webinar, slides, and follow-up Q&A on CalCCA’s Pathways website.
Advanced Energy United launched a website focused on how SB 540 will benefit distributed energy resources. The website also includes a detailed FAQ that debunks misinformation and highlights the economic, environmental, and reliability impacts SB 540 will provide.
A recent opinion piece in CalMatters by Michael Wara highlights why passing SB 540 is critical for California to lower energy costs and boost reliability by moving to a broader regional market.
Another opinion piece in Capitol Weekly by Marybel Batjer, former President of the CPUC, also highlights why passing SB 540 is essential for addressing California's growing energy challenges, and notes that the bill provides a path forward to reduce energy costs and expand clean energy resources while ensuring California's leadership remains intact.

Updates Around the West

Pacific Northwest

Earlier this month, RTO Insider reported that the Bonneville Power Administration (BPA) received almost 150 comments on its March 6 draft policy, which outlines its likely decision to join SPP's Markets+. A final decision should be made next month.

Although BPA seems extremely likely to move forward with Markets+, this draft decision received strong opposition from federal and state officials from Oregon and Washington, environmental organizations, and other utilities in the area, who argue that joining Markets+ could undermine affordability and reliability and create complex seams between market territories.

Colorado

Xcel Energy (Public Service Company of Colorado) has filed an application to join Markets+ with the Colorado PUC. Intervenors filed answer testimony at the end of April, with more procedural deadlines coming in May. These include a public hearing on May 22, which is an important opportunity to weigh in on how this decision will impact Colorado's clean energy goals and future. For more on what Colorado utilities' market choices could mean for the state, I'm sharing this blog from my colleague Brian Turner.

Useful Resources

SPP has updated its Markets+ webpage to reflect the latest list of participants. As of February 2025, participants include: Arizona Public Service, Bonneville Power Administration, Chelan County PUD, Grant County PUD, Powerex, Salt River Project, Tacoma Power, and Tucson Electric Power.

EDAM has a similar webpage that maintains a list of which utilities are in which stage of commitment. Currently, eight entities have committed or are leaning toward EDAM: Balancing Authority of Northern California, LADWP, PacifiCorp, Portland General Electric, BHE Montana, Idaho Power, NV Energy, and PNM.