- PacifiCorp, the vertically-integrated Western utility owned by Warren Buffett's Berkshire Hathaway Inc., is considering joining the grid operated by California Independent System Operator (CAISO).
- PacifiCorp and CAISO have signed a memorandum of understanding indicating that the utility will study the feasibility of becoming a transmission-owning member of the California grid. Bloomberg Business reports that joining the grid would see CAISO take operational control of PacifiCorp's 16,300 miles of transmission lines, expanding the grid operator's territory by nearly 40%.
- If PacifiCorp does join the grid operator's system, it would fully open up the California energy market to PacifiCorp's generation, including large amounts of cheap renewables, principally wind and hydropower.
PacifiCorp is no stranger to working with CAISO. Last year, the utility partnered with the grid operator to create an Energy Imbalance Market, which hopes to ease renewables integration by allowing utilities to trade energy from a significantly larger area to balance out supply and demand fluctuations. Results of the market were largely positive after its first few months, but FERC is now investigating it over price fluctuations, something the market operators promise they will fix.
Full integration into CAISO's grid would represent a significant opportunity for PacifiCorp to export its low-cost renewable generation to the California market, and help the state toward its goal of sourcing 33% of its electricity from renewable sources by 2020. Last year, the utility reported that it owned more than 1,000 MW of wind generation and plans to expand its portfolio further. It also owns more than 1,000 MW of hydroelectric power. CAISO operation of PacifiCorp's transmission system would remove barriers to integrating the renewable energy into the California system.
If those low-priced renewable resources are granted easier access to the California market through integration with CAISO, independent power producers in the state could take a hit. Gas-fired power plant operators in the state have already complained that the influx of wind and solar onto the state's grid has affected their bottom lines, Bloomberg reports.
CAISO and PacifiCorp will conduct analyses on the costs and benefits associated with full participation over the next few months, a press release indicated. The announcement does not affect the utility's participation in the Energy Imbalance Market.
PacifiCorp is made up of three companies. Pacific Power delivers electricity to customers in Oregon, Washington and Northern California. Rocky Mountain Power delivers electricity to Utah, Wyoming and Idaho, and PacifiCorp Transmission develops transmission projects. Together, the companies serve more than 1.8 million customers.