Grid manager seeks multi-state system, touts GHG benefit

Source: Anne C. Mulkern, E&E reporter • Posted: Friday, July 15, 2016

Expanding the system that powers California’s grid with utilities beyond the Golden State’s borders would allow for more renewable power and cut greenhouse gas emissions, the grid manager said yesterday.

The California Independent System Operator (CAISO), which manages most of the state’s grid, released a series of reports it said prove the benefits of a multi-state system. They include lower costs for consumers, reducing fossil fuel usage over the long term, and sparing the land and water that are used to build large power plants.

The studies were ordered as part of S.B. 350, which passed last year. It increased to 50 percent the amount of renewable energy that investor-owned utilities in California must make by 2035. The studies released yesterday said that California could meet that mandate with in-state renewable power, but there would be benefits to getting some from other states.

“There’s a pretty compelling, simple message here,” Steve Berberich, CEO of CAISO, said during a phone call with reporters. “The electric industry, and more broadly I think California, is really at a major inflection point right now, with significant changes both on the transmission system but also on the distribution system, as we continue to add distributed generation.”

California can exceed its 50 percent renewable power goal while creating jobs in the green industry, Berberich added. He noted that Iowa can have 85 percent renewable power because it’s linked to other states.

“Regionalizing the grid will allow California to go beyond the 50 percent target,” he said.

CAISO right now is limited by state law to operating just within the state, with one small exception. Valley Electric Association Inc. in Pahrump, Nev., joined because its power lines were crossing with California’s and it made sense, said CAISO spokesman Steven Greenlee. Utilities are members of CAISO.

The Golden State continues to add renewable power capacity. There’s about 4,000 megawatts of locally based generation in the system, Berberich said. That’s growing by as many as 13,000 solar rooftops or 75 MW of capacity each month.

But even as the amount of solar and other green power sources has grown, there has been trouble using it all in the hours that it’s available. There are times during the day when solar generators are told to stop putting power into the system — in the CAISO lingo, they must “curtail” — because there are no buyers available.

CAISO argues that if it joined up with other power authorities across state lines, California could sell its extra solar to other states and buy wind power at night, including from Wyoming and New Mexico.

The initial proposal appears focused on linking with PacifiCorp, which operates as Pacific Power in Oregon, Washington and California and as Rocky Mountain Power in Utah. The studies looked at the effect of that through 2020. It said that over the short term, it would result in more coal power in the ISO grid and more greenhouse gas emissions as a result.

GHG benefits by 2030

They also estimated that by 2030, there would be members from other states and Canada.

In 2030, power could be bought and sold by members of the Western Electricity Coordinating Council (WECC), except for the federal Power Marketing Administrations. WECC includes Alberta and British Columbia in Canada, the northwestern part of Mexico, and all or portions of 14 Western states in between.

In 2030, the study said, “regional ISO resources are committed and dispatched in a coordinated fashion to meet combined energy and operating reserves requirements. … Oversupply from California’s renewables portfolio is more readily absorbed by the regional marketplace.”

The studies said that a bigger market would allow California to hit its 50 percent renewable energy goal “while saving consumers up to $1.5 billion by 2030. That’s partly because of a reduction in electricity rates that would come about because there would be less or no curtailment of renewable power.”

“California can meet the 50 percent goal by building fewer renewable projects because you can get more out of every renewable project you build by avoiding curtailments,” said Keith Casey, vice president of market and infrastructure development at CAISO. “So there’s a significant capital investment savings from that.”

In addition, he said, in planning for California’s future reliability needs, it could rely on resources across a broader region, which would create more savings.

CAISO will need approval from California’s Legislature to make the move. Other regional balancing authorities would need to decide they wanted to link up. The grid manager said it was releasing the data now in preparation for a late July meeting with interested parties to discuss the issue.

There are critics of the proposal. Linking with PacifiCorp means allowing the use of coal. And while CAISO’s studies portrayed that as a short-term factor, that isn’t guaranteed, said Travis Ritchie, attorney with the Sierra Club Environmental Law Program.

“The near term increase in coal dispatch could throw a lifeline to several of PacifiCorp’s numerous coal plants,” Ritchie said in an email. “As those plants get more profitable, it is more likely that PacifiCorp would spend money on upcoming capital costs at the plant that would extend their lives 15-20 years.”

“While we agree that the long term modeling shows a decrease in GHG emissions, which is a good thing, that decrease is primarily due to a downturn in gas plants (still a good thing),” he added. “The problem is that the model does not account for the potential that PacifiCorp may extend the lives of several of its coal plants if they are dispatching more under a regional market.”

If just a few of the coal units are spared from retirement, he said, “the GHG impacts would quickly swamp the overall benefits predicted by the market.”

Casey said the expanded market would result in lower greenhouse gas emissions because of a number of factors. Right now, the cuts are a result of California’s renewables mandate. But if there’s a broader market, more players will come in, he said.

“By having this large seamless platform for entities to transact with renewable resources all over the West, you’re going to see a lot more development of renewables,” Casey said.

He said that competition would push down prices for natural gas and coal and could lead to more retirements of coal plants.

This story also appears in EnergyWire.