Utah lawmakers take first step to have more say in plans for regional power grid
Utah lawmakers began the process of drafting legislation that could allow them to block the state’s participation in California’s proposed regional electrical grid.
After nearly two hours of testimony Wednesday, members of the Public Utilities, Energy and Technology Interim Committee said they will begin work on a bill to give the Utah Legislature the ability to weigh in on the California proposal to unify and oversee the power grid serving 11 Western states in order to cut electrical costs, improve efficiency and promote renewable energy.
A unified grid, according to the latest studies, would be a big boon for the environment and for California’s economy. But Utah could see increased carbon emissions in the early years of the agreement — and may have to agree to a uniform fee to access it.
California ratepayers stand to save as much as $1.5 billion a year under the proposal — enough to cut the state’s retail power rates by as much as 3 percent, while at the same time meeting or exceeding its goal of obtaining 50 percent of its energy from renewable resources, said Keith Casey, vice president of market and infrastructure development for the California Independent System Operator (CAISO), a nonprofit organization that oversees power distribution in California.
It’s not clear, however, whether Utah will see those same benefits. Studies released earlier this week were specifically requested by the same California legislation that tasked the CAISO with exploring grid regionalization and focused almost exclusively on the impact a regional grid would have on California.
Details regarding the benefits for other participating states remain sketchy. A preliminary study commissioned by the CAISO and PacifiCorp — which operates as Rocky Mountain Power in Utah — determined that the utility could save up to $272 million by 2030 as a participant in the grid. But that study didn’t look at the possible costs of participation.
The lack of detailed information caused some ruffled feathers in Wednesday’s discussion.
“I agree that there are theoretical benefits to grid regionalization,” said Michele Beck, director of the Utah Office of Consumer Services. “Major questions remain as to whether those are net benefits. We have not even begun to complete an assessment of all the costs.”
California’s risks are perhaps more certain. In the event the state fails to convince its neighbors that grid regionalization is a good idea, California could end up with a surplus of 13,000 megawatts of renewable energy by 2025 that would have to be shut down when peak generation exceeds demand, according to the CAISO studies.
“I don’t think it makes societal or economic sense to turn off zero carbon, zero marginal cost power so frequently,” Casey said. Selling that power out of state “allows renewables to flourish in California and out.”
But the best outcome hinges on participation from all 11 western states — California, Utah, Washington, Idaho, Montana, Oregon, Wyoming, Nevada, Colorado, Arizona and New Mexico — and assumes those states develop additional renewable resources on their own. It also assumes the states and their utilities agree to a uniform fee for transmission access.
That has been a sticking point in Utah.
“Utah currently enjoys some of the lowest utility rates in the country,” said Laura Nelson, director of the Governor’s Office of Energy Development “We could see some leveling of energy rates across the region, and some participants have significantly higher rates than we do.”
Nelson said her office was also concerned that participating in the regional grid, as currently proposed, would force Utah to help fund the construction of transmission projects related to other states’ energy policies, and that Utah’s own energy policies could be constrained by the policies of other states.
