CAISO and PacifiCorp to Explore Adding Firm as Transmission Owner
The California Independent System Operator (CAISO) and Portland, Ore.-based utility PacifiCorp announced on April 14 that they had signed a memorandum of understanding to explore the possibility of PacifiCorp joining the ISO as a participating transmission owner.
The move would be a big one for both entities. PacifiCorp, a subsidiary of Berkshire Hathaway Energy (BHE), operates one of the largest grids in the western U.S., serving territory in Oregon, Washington, Idaho, Utah, Wyoming, and a small portion of northern California. Joining CAISO, which covers about 80% of California, would expand the ISO's footprint by nearly 40%.
PacifiCorp would be CAISO's 17th transmission owner and would hand over operational control of its grid to the ISO. The combined systems would serve roughly 32 million customers.
"PacifiCorp and the ISO are well-positioned to strengthen our existing partnership in order to benefit customers, support clean energy goals and enhance service throughout the West and Pacific Northwest," said PacifiCorp CEO Pat Reiten.
"PacifiCorp customers will enjoy the same benefits of economies of scale that the competitive marketplace creates, just as the customers of all ISO full members have been earning."
PacifiCorp said its subsidiaries Pacific Power and Rocky Mountain Power would continue to serve their retail customers as they are doing currently.
One benefit for CAISO and California would be access to the substantial renewable generation in the Pacific Northwest. PacifiCorp operates one of the country's largest wind turbine fleets in addition to significant hydro, solar, and geothermal resources. The move would also increase CAISO's ability to balance renewables across its system.
"The addition of PacifiCorp to the ISO would allow larger amounts of wind and solar power to be more seamlessly integrated into the ISO's transmission network, which will help achieve our clean energy vision, lower costs, and maintain grid reliability," Robert B. Weisenmiller, chair of the California Energy Commission, said.
"This paves the way for an efficient, regional approach to clean power that will help meet Governor Brown's goal of at least 50 percent renewable energy by 2030," said Mary D. Nichols, Chairman of the California Air Resources Board. "Climate change doesn't respect jurisdictional boundaries, and by working together, we can reduce air pollution and carbon pollution more cost-effectively."
Not everyone is likely to welcome the proposal, however. Some merchant generators operating traditional resources have expressed concern that the influx of cheap renewable energy could hurt their revenues.
The move comes despite a somewhat rocky start to the Energy Imbalance Market (EIM) that PacifiCorp and CAISO launched last November. Though area utilities Pacific Energy and NV Energy (another BHE subsidiary) have moved to join the EIM, the Federal Energy Regulatory Commission (FERC) has expressed some concern with the project after it experienced price spikes this past winter.
In March, FERC rejected a proposal from CAISO to offer a 12-month transition period for new entrants and waive related pricing parameters. FERC is investigating the circumstances that led to the price spikes and held a technical conference on the issue this month.
A comprehensive costs-and-benefits study on the proposal is currently underway and is expected to be completed and made public later this summer. Should PacifiCorp decide to pursue joining CAISO following the study, a full stakeholder and regulatory review and input process would follow.
-Thomas W. Overton, JD is a POWER associate editor (@thomas_overton, @POWERmagazine).
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