Dive Brief:
- California ISO has made significant concessions to transmission owners wary of joining a regionalized market, addressing concerns that the state with the largest economy in the country would dominate priorities, RTO Insider reports.
- A new set of proposed governance rules for the ISO's effort to organize 38 independent power providing systems includes provisions to "protect and preserve state authority," including over procurement policy and resource planning.
- The ISO's changes would help to address concerns from transmission owners wary of joining a California-dominated market, and who were also considering joining another Western initiative, the Mountain West Transmission Group.
Dive Insight:
New governance documents for a proposal to regionalize the California ISO would add protections for state sovereignty, but observers say there are limits to what governance can achieve given recent court decisions.
Issued earlier this month, CAISO said its new governance documents "will include binding provisions to protect and preserve state authority over matters regulated by the states themselves, including
procurement policy and resource planning." Also preserved would be sate authority on some issues the ISO typically is not involved in, including retail ratemaking and the issuing of certificates of public convenience and necessity ,"for utilities within their jurisdiction, and resource or transmission siting within their state."
The new guidance seeks to assuage fears of some transmission owners who saw the expanded market as potentially dominated by California concerns. RTO Insider notes the new proposal would also seat members on a nine-member transitional committee. Instead of the previously-planned five seats tapped by members from California, the RTO would put in place a nominations process.
"The proposal appears to genuinely making an effort to preserve state sovereignty,” Michele Beck, director of the Utah Office of Consumer Services, told RTO Insider. “But there’s a limit to what you can do in any proposal.”
Once concern is the Hughes v. Talen Energy case decided by the U.S. Supreme Court earlier this year, with Justices ruling 8-0 that a Maryland power plant subsidy had overstepped into regional markets.
California's plan to expand the ISO is also facing pressure from other transmission owners looking to form their own market. Mountain West would include Western Area Power Administration’s Loveland Area Projects and Colorado River Storage Project.
WAPA's large network was part of the draw for owners wary of California's influence, leading to the proposed governance changes.
