Transmission developers power forward in West as move to single market inches along
Planners and developers across the West are going as far and fast as they can toward regionalization.
Transmission planning and development all over the West is fast and furious — by transmission development standards. And yet, at the center of the activity, there is a frustrated waiting for efforts to organize the region into a single market.
The Western Interconnection covers 14 states and extends from Canada to Mexico and from the Pacific Coast to the Great Plains. Many utilities and power providers argue its 136,000 miles of synchronized transmission and 38 balancing authorities (BAs) could serve its more than 80 million electricity customers through a single organized electricity market.
The system’s 265,000 MW of installed generation capacity accounts for 20% of U.S.-Canada nameplate power, 70% of the region’s solar and 40% of its hydro. Yet the system has only one U.S. wholesale electricity market, the state-wide California Independent System Operator (CAISO).
CAISO’s proposal to expand across the West is being stymied by California political resistance. The system operator’s plan would unify Western BAs by opening its marketplace to them. Some stakeholders say that would introduce complications if it opened the state’s system to federal regulation, especially with the current administration. However, a new study argues that federal oversight would not compromise California’s nation-leading push for renewables.
EIM moving forward
In the midst of the push for regionalization, CAISO’s Energy Imbalance Market (EIM) is gaining momentum faster than advocates expected. EIMs allow BAs to exchange energy to meet real time supply-demand mismatches rather than starting up peaker plants. From two participants in 2014, it has grown to four BAs, with seven more scheduled to join in the next three years.
Transmission developers in the region are moving ahead. And the advantages of regional planning and competitive markets are changing once fiercely independent Western load serving entities’ (LSEs) attitudes.
“There is a lot of creative thinking and a lot of movement right now because of where this all could go,” Julia Prochnik, director of Western renewable grid planning for the Natural Resources Defense Council (NRDC), told Utility Dive, referring to the emergence of a regionalized market.
But the political pushback against the CAISO expansion proposal has left some BAs and transmission planners waiting for a full-fledged regional wholesale power market before moving further, she said.
Other utilities and transmission developers in the West, however, are hedging their bets with projects and initiatives that could be beneficial with or without regionalization of the Western power market.
They include lines that allow the exchange of low-cost Wyoming and New Mexico wind and low-cost California, Arizona and Nevada solar. TransCanyon Energy transmission planner Bob Smith said such projects “may be cost-effective without a regional system. But, he added, “regionalization would make benefits bigger because the market would allow us to optimize the resources’ use.”
Modernized system operations, the EIM, improved exchange of inter-regional planning data, and the allying of individual utilities are already delivering benefits to customers. It has “opened the eyes of Western balancing authorities who, a decade ago, wanted to be independent,” NRDC’s Prochnik said.
If CAISO or another system operator is finally able to begin building the legislative and policy structure for the long-awaited Western region reliability authority and power market, it will find scaffolding in place.
