Happy April! We continue to have plenty of updates from the West-Wide Governance Pathways Initiative including the highly anticipated straw proposal, progress on day-ahead market choices, and momentum in Western states on market developments. We are also highlighting a new Rocky Mountain Institute (RMI) report on Western transmission and sharing an update on the FERC rules expected to come out soon.
Happy April! We continue to have plenty of updates from the West-Wide Governance Pathways Initiative, including a new and highly anticipated straw proposal. This month also saw more progress on day-ahead market choices and markets activity in Nevada. On the related topic of Western transmission, we are highlighting a new RMI report and sharing an update on the FERC rule expected to come out soon.
- Leah Rubin Shen, Managing Director at Advanced Energy United
As always, share the newsletter with your friends and colleagues and encourage them to subscribe.
Feedback or suggestions for content? Please reach out to us at westernrto@advancedenergyunited.org.
West-Wide Governance Pathways Initiative Releases
Straw Proposal
Last week, the Pathways Launch Committee released an innovative straw proposaloutlining steps that are designed to lead to an independently-governed RTO in the West that can include California, capitalizing on the reliability and cost savings benefits of sharing resources across the largest possible footprint.
The first step of the proposal will provide more autonomy to the existing Western Energy Imbalance Market (WEIM) governing body, helping to improve near-term uptake of CAISO's day-ahead market offering, the Extended Day-Ahead Market (EDAM).
The second step will establish an independent regional organization to oversee the governance of WEIM and EDAM, while still using CAISO to help run these markets.
This approach builds on the success of CAISO's existing markets, creates the independent governance structure many stakeholders have been seeking, and preserves the authority of policymakers to make decisions for their own states, such as retaining the existing balancing authority responsibilities and California-specific functions of CAISO. While further steps are outside the scope of the Launch Committee's work, the vision is that the new independent entity would offer additional market services over time, up to and including a full RTO.
Multiple statements applauding the proposal from coalition partners were included in this RTO Insider article. You can also read these same statements here and here.
What's next?
Today, from 10 am-12 pm PT, the Pathways Initiative will host its monthly stakeholder meeting that will include an overview presentation of the proposal and a follow-up discussion with stakeholders. The meeting can be joined through this Zoom link. If you are unable to join, additional discussion is expected at the Spring CREPC-WIRAB meeting in Denver, CO, on April 24-26.
The Launch Committee is seeking input from stakeholders on the straw proposal, including how these options compare against the evaluation criteria established early in the Pathways Initiative process. Comments are due by May 8 and may be submitted via email through Comments@WestWidePathwaysInitiative.org.
More Day-Ahead Market Decisions
We're seeing continued momentum on day-ahead market choices with two new entities, Portland General Electric (PGE) and Idaho Power, announcing their interest in joining CAISO's EDAM.
In a press release, Maria Pope, PGE president and CEO, stated, "Joining the CAISO Extended Day-Ahead Market is a significant next step toward an integrated regional system that will deliver cost savings and enhanced reliability for PGE customers. Together with CAISO and multiple stakeholders, PGE worked extensively to help develop this market to lower power costs, increase resilience and access more clean energy sources across the West."
In a letter to CAISO, Idaho Power informed the ISO it is currently leaning towards EDAM as its preferred day-ahead market option, saying, "We are encouraged by the results of the benefits studies and view EDAM as an important solution to increase market benefits that our customers are already experiencing in WEIM. We look forward to continued discussions with CAISO to successfully address these important issues."
In addition, Bonneville Power Administration (BPA) is exploring its options for a day-ahead market. Earlier this month, BPA announced its staff recommendation for day-ahead market participation, indicating their preference for the Southwest Power Pool (SPP) day-ahead market, Markets+. While the fact that BPA is considering joining a day-ahead market at all is a notable development, multiple leaders and advocates throughout the Northwest—including the Governors of Washington and Oregon—urged BPA to think carefully about its decision, noting that the landscape is rapidly changing and that benefits are reduced if the market landscape is fragmented.
Markets Momentum in Nevada
The Nevada Public Utilities Commission (PUCN) is rapidly progressing through a regulatory process designed to ensure NV Energy (NVE) delivers on the state’s policy goal of joining an RTO by 2030, including two workshops on key RTO issues this month.
The second workshop last week had presentations from CAISO, SPP, and the Pathways Initiative detailing the various regional market models and the prospective timelines for each. During both the CAISO and SPP presentations, Commissioners were focused on the additional capital costs associated with NVE’s participation in EDAM or Markets+.
Notably, the Pathways Initiative presentation detailed the multistep plan towards regionalization based on the straw proposal. The presentation indicated NVE’s participation would trigger entry into the first step outlined above, since that step requires a certain threshold of signed implementation agreements outside of the CAISO balancing authority. The Commissioner questions focused on the incremental costs associated with the Pathways Initiative, although it is too early in the process to accurately project costs.
In contrast to Nevada, it is worth noting that despite finally releasing proposed rules on how it will review applications from utilities who wish to join the various regional markets being developed in the West, Colorado has been moving slower in their progress requiring their utilities to join an RTO by 2030.
Pending FERC Transmission Rules Provide Opportunity for Western U.S.
FERC will likely release its much-anticipated transmission planning and cost allocation order in the coming weeks. The order is expected to direct utilities to participate in a long-term, scenario-based regional transmission planning process that expands consideration of the drivers of needed transmission and evaluates a wider range of benefits than are currently considered. A strong order from FERC and strong implementation, encouraged and supported by states, can stimulate much-needed transmission buildout and do so more cost-effectively than the status quo.
RMI just released a new report, States in Sync: The Western win-win transmission opportunity, that shows how better cooperation on transmission can provide an opportunity for the West. The report finds that expanded regional transmission planning could lead to multi-billion-dollar economic opportunities in the region, and that by working together to connect to a regional grid, Western clean energy states can save over 30% on energy costs while meeting clean energy goals.
The Bonneville Power Administration released a much anticipated staff report that tentatively recommends the agency choose SPP’s Markets+ over CAISO’s Extended Day-Ahead Market.
The stakeholder group aims to establish an organization with independent governance to run wholesale power markets for the west, laying the groundwork for a possible regional transmission organization.
Western RTO Newsletter
Were you forwarded this email from a colleague and want to receive future emails? Subscribe here.