CAISO and the Regional System Operator

CAISO and the Regional System Operator
21 July 2016

The California Independent System Operator

(CAISO) operates California’s wholesale transmission grid for “participating transmission owners,” oversees an organized and competitive energy market, and manages large-scale infrastructure planning efforts to ensure grid reliability (“keep the lights on”). PacifiCorp is currently investigating the possibility of partnering with CAISO to create a regional system operator, including an organized energy market.

Should PacifiCorp Partner with CAISO to Create a Regional System Operator?

Should PacifiCorp partner with CAISO? And what would that look like for Utah’s utility ratepayers and independent generation resources? As you might imagine, joining forces to modify utility operations on this scale comes with both costs and benefits. CAISO and PacifiCorp are currently deep in the process of analyzing costs and benefits.

Some potential benefits of regionalization include the following:

  • Coordinated operation of a the electric system over a broad geographic footprint increases the efficiency of the transmission system and electric generation dispatch – in other words, with more resources and transmission options shared across a broader footprint, an independent system operator can pick the lowest cost, most available options, reducing costs for ratepayers.
  • Similarly, with access to a broader array of coordinated energy resources available for dispatch, a single utility need not build out its own generation capacity as much as it would need to if it were operating on its own – once again, reducing costs for ratepayers.
  • Regionalization of our transmission system facilitates renewable energy integration at lower cost, advancing renewable technologies while reducing greenhouse gas emissions.
  • Organized grid operation enhances the coordination and reliability of the Western grid.

On the other hand, many of the concerns with regionalization have to do with governance: how will the new system operator be organized and governed once it is no longer California-specific? Will it be truly independent? How do we make sure all of the other participating states and interests have sufficient representation? We also want to ensure that the actual benefits of joining a regional organization outweigh the incremental costs and that the benefits of regionalization accrue to ratepayers. This analysis has yet to be done.

This is a critical issue that Utah Clean Energy is heavily engaged in. Stay tuned for more information as this work unfolds.