How power markets in the west could be won

Source: By Kelsey Tamborrino,Politico • Posted: Thursday, July 12, 2018

When Enron’s market manipulation in the early 2000s caused widespread blackouts and power prices to skyrocket in California, it helped kill a FERC effort to expand competitive power markets into the state. California Gov. Jerry Brown, trying to leave his mark in his last year in office, is now laying the groundwork for a power market and transmission organization that would run across seven states, Pro’s Eric Wolff reports. The effort has the tentative support of some FERC commissioners and could advance greens’ agenda to fight climate change by driving down power prices while also greening up the grid.

A bill moving through the state Legislature with Brown’s support would let the California Independent System Operator expand its footprint across the West, but it would need to pass before state lawmakers adjourn Nov. 30. Environmentalists also worry the new market could relinquish some of California’s control over transmission lines to states that are more concerned about maintaining coal and natural gas production jobs than reducing emissions. “Suddenly we would have in the same balancing authority, a whole bunch of at-risk coal plants that California might have to subsidize,” said Matt Friedman, a staff attorney with The Utility Reform Network, a public advocacy group. “We don’t have that at-risk coal [in] California. There’s no mechanism [right now] for FERC to use to force Californians to pay for those plants.”

FERC has long advocated for the expansion of competitive power markets. “The resource mix is making it more advantageous for people to share power over a bigger footprint, and save money and increase reliability, so what’s not to like?” FERC Commissioner Cheryl LaFleur, a Democrat, told Eric. And the enthusiasm surrounding the idea has Regional Transmission Organizations headquartered as far away as Pennsylvania and Arkansas eyeing the region for possible expansion — though setbacks have occurred in some of those efforts, leaving the California Independent System Operator well positioned to expand its reach.