California’s regionally isolated power grid leaves state vulnerable to failure

The Western power grid is going through a major transformation as states and utilities strive to boost reliability and fulfill their clean electricity goals. California legislation that would have been a first step toward enhancing grid collaboration in the West did not advance last month, but that should not stop us from more actively planning for a robust energy future at such a critical juncture.

It was encouraging that the governor in May committed to begin working towards greater regional cooperation in sharing energy and upgrading the transmission network. California leadership is essential to achieve a better-connected power grid that would benefit tens of millions of people across the West.

Without that leadership, California could be left behind.

In a policy brief, the Union of Concerned Scientists laid out the benefits and risks of grid regionalization. Establishing a western grid operator could expand access to renewable energy, reduce overall costs and help to avoid the kind of power outages we’ve seen in the past during periods of extreme heat.

That was the idea behind Assembly Bill 538, authored by Assemblymember Chris Holden, a Pasadena Democrat, which stalled in the Legislature last month. It would have allowed California’s grid operator, CAISO, to transition from a politically appointed leadership into an independent governance structure – a move that would enable it to expand across multiple states as a western regional transmission organization, known as an RTO.

While the proposal has been floated in California before, the need for more regional collaboration has become more urgent as climate change continues to stress the grid and we need to build clean energy infrastructure at an unprecedented rate.

But even without passage of the legislation, this is not the time to slam on the brakes. It’s important to recognize that CAISO isn’t the only game in town anymore. The Southwest Power Pool, an RTO in Arkansas that operates in 17 central U.S. states, is moving quickly to expand its operations into the West. CAISO already collaborates with some western utilities, but these and other utilities are considering joining the Southwest Power Pool because they want to be members of an RTO.

They don’t view CAISO as a pathway to RTO membership unless it changes its governance structure.

If California loses its grid collaborators, energy costs will go up and grid reliability could be jeopardized. To prevent utilities from flocking to the Southwest Power Pool, California needs to make it clear to them that CAISO governance change could still happen, and continued collaboration could eventually lead to membership in an independently governed RTO.

One way to accomplish that is for the governor, legislators and regulators to work together to shape a western RTO that works for California and the rest of the West. If CAISO is ever going to fill that role, it needs a new, independent governance structure that does a better job than existing grid operators of soliciting meaningful participation from a broad range of stakeholders, including underrepresented communities, and enabling states to pursue their policy priorities. Fortunately, a diverse array of state electricity regulators have already provided a set of governance principles as a jumping-off point.

The added benefit of shaping that structure now is that California legislators would likely be much more comfortable passing a bill changing CAISO’s governance if they knew what the new structure would look like. At the same time, California policymakers should work to address concerns over grid regionalization raised by labor groups and the potential impacts on the state’s renewable energy goals.

California should send a clear signal to the rest of the West that it is actively engaged in shaping a western grid operator that will enable states to achieve their clean energy goals while providing more reliable and affordable electricity to consumers. The difficult work of building a western RTO has only just begun, and now is the time for California to continue charging forward.