California could keep the lights on by expanding grid across the West, report finds

Expanding California’s electricity grid to cooperate with neighboring states would bolster reliability and affordability while reducing carbon emissions, researchers at the U.S. Department of Energy concluded in a new report.

The report released Monday said California would both maintain jurisdiction over energy rates and stay on track to meet its clean energy goals as nearby states such as Arizona, Colorado, Nevada, New Mexico, Oregon and Washington strive to meet theirs.

State lawmakers requested the report last year, and will consider a bill this year that could turn California Independent System Operator (ISO) into a grid operator across the wider region. A similar legislative effort failed in 2018 following opposition from labor and environmental groups.

“We have specific and pragmatic experience over the course of almost a decade and some very stressed operating conditions that shows Western energy collaboration is key,” said Elliot Mainzer, CEO and president of CAISO. “We’re all looking for ways to meet our clean energy goals in a reliable, affordable and equitable fashion. That objective is much more commonly shared today.”

After years of considering this question, the legislature directed the CAISO to compile relevant research on the effects of greater regional cooperation. The resulting report comes as lawmakers consider legislation (Assembly Bill 538) that would allow the operator to expand transmission and energy market facilitation across the West.

If the grid were a network of roads carrying electricity between communities, transmission lines would be highways. Experts have long argued additional and more efficient power lines across state borders are needed to supply California with 100% clean energy by 2045 as the ISO predicted electricity demand to nearly double.

Heavier reliance on renewables in recent years has already increased interdependence among Western states but also given rise to lapses in reliability during periods of high demand. Californians have experienced that grid strain firsthand in recent years, including during last September’s record heatwave amid threats of rolling blackouts.

In a regional grid, transmission operators outside California would transfer operation of their transmission system to a single body responsible for short-term power reliability across participating states. That includes the ability to order power plants to produce more or less, like air traffic controllers of renewable electricity.

After reviewing more than three dozen technical, policy and legal studies on this question, researchers at the National Renewable Energy Laboratory commissioned by the CAISO highlighted a range of benefits to a region-wide grid.

Annual operating costs for regional electricity distribution would drop by more than 8%, according to the report. One highlighted study estimated that carbon emissions related to California load for 2030 fell 6.7%–7.5% with a West-wide regional operation.

In addition to cost, the report said a regional system would help states resist extreme weather events. If California were experiencing a heat wave, a regional operator could more easily move excess wind and solar power from states with high production and low demand to California.

Vice president of policy at Advanced Energy United Amisha Rai, part of a group of clean energy companies and environmental organizations supporting regionalization, said California risks being left behind if lawmakers don’t act quickly.

“I hope that decision makers and stakeholders take these findings seriously and really use them as a sort of guidance on how to approach this conversation,” Rai said. “We’re going to see an expanded grid in the West. The question is whether California can help lead the way.”

What a regional grid operator looks like, however, remains unclear. The bill proposes expanding CAISO, which the report said would require changes to its governance structure. The report also suggests creating a new regional transmission operator down the road.

“There’s a lot of utilities around the West, and they all have their own interests so they’re not just going to sign on the bottom line,” sais Rob Gramlich, president of power sector consulting firm Grid Strategies. “But it’s my perception that a lot of important conversations are being held up by the delay in passing this legislation.”

The bill appears likely to receive at least some of the opposition it drew in 2018 from a coalition of groups that included the powerful Building & Construction Trades Council and Sierra Club, which warned that California could lose jobs and control of its energy and climate policies.

In a statement, the Trades Council President Andrew Meredith said the move would outsource construction jobs and lead to a loss of influence by California ratepayers. On the topic of jobs, the report pointed to likely increases in job growth with lower electricity costs but did not reference construction job impacts.

“Instead of focusing on regionalization efforts, we encourage the author and colleagues to help us get more renewable energy projects permitted in our own borders, where labor and environmental standards are strong,” Meredith said. “Embracing regionalization is akin to California saying ‘We can’t build these renewable projects on our own.’”

The bill on regionalizing California’s grid, AB 538, is not yet scheduled for a hearing in the assembly committee on utilities and energy.