The California Independent System Operator, a nonprofit corporation with a board appointed by the governor, on a daily basis controls the wholesale electricity market for 80 percent of California and a slice of Nevada. It has authority to balance power supplies and demands across 26,000 miles of transmission lines. It can move surplus power where it’s generated across the grid it controls to meet peak demand elsewhere.
PacifiCorp, the parent company of Pacific Power, provides power across six states, its 16,300-plus miles of transmission lines spread like a fishing net over Wyoming, Idaho, Utah, Oregon, Washington and Northern California. Bringing the two together means potentially lower costs for consumers for electrical power, whether generated from fossil fuels or renewable sources such as wind, water and solar. A merger could put more renewable power on the grid and drive down the cost to generate that power, according to PacifiCorp and advocates for renewable energy.
“If it happens, it will be a big deal,” said Bob Jenks, executive director of the nonprofit watchdog Citizens’ Utility Board of Oregon. “It would be a very significant change in how resources in the West are allocated and used.”
Marrying PacifiCorp to California’s power grid has potential downsides. It would add another layer to the system that regulates utilities, a layer represented by a mammoth bureaucracy with thousands of employees and a multimillion-dollar budget, said Fred Heutte, senior policy analyst for the Northwest Energy Coalition, a business, consumer and environmental advocacy group. Some states may balk at handing control of their power grids to an organization currently based in Sacramento. On the other hand, California may be reluctant to yield control over its power grid to outsiders.
“I think we’ll have to be able to demonstrate that this bears an interest here for our customers,” said PacifiCorp spokesman Bob Gravely. “We certainly believe there’s a potential for that. At the end of the day we’ll have to make that case.”
Coal power
Amy Hojnowski, senior campaign representative for the Sierra Club Beyond Coal Campaign, said the union, if accomplished, could allow PacifiCorp to bring into California greater amounts of electricity from coal-fired power plants. Ten of the utility’s 74 generating plants are fueled by coal, which provides about 60 percent of its electrical power.
“California, right now, is really set on an irreversible course of trying to rid itself of all coal-fired power,” Hojnowski said. “The ISO (California Independent System Operator) is really pitching this as an opportunity for an increased use of renewables. Potentially, it’s a great opportunity to be more efficient with renewable energy, to rely more on renewables and less on fossil fuels.”
Gravely said the surplus supply of solar-generated electricity that California sometimes generates could be used to reduce the amount of power generated by PacifiCorp’s coal- and natural-gas-fired plants.
The California Independent System Operator is one of nine similar, regional organizations in the U.S. and the only one in the West. It owns no power plants or transmission lines but controls the flow of power across the utility company lines within its jurisdiction. Its purpose, according to the organization’s website and the Federal Energy Regulatory Commission, is to allow equal access to power and, by creating a market for power, lower costs and diversify power sources.
“One way to think of it is as an air traffic control system,” Gravely said. “Airlines own the airplanes but there’s a unified system that dictates where those airplanes take off and land and when.”
Minute markets
In April, PacifiCorp and the California Independent System Operator announced they would study the feasibility of the two coming together. Since November, the two have cooperated in an energy imbalance market, using 5-minute and 15-minute spot market forecasts to smooth out the flow of electricity across their respective girds.
If they agree to further link PacifiCorp’s system to California’s, public utility commissions in six states would need to sign off, along with FERC. In addition, the California Legislature would need to amend its laws to open the system operator governing board to representatives from the other states.
“Part of what’s driving this, is in the West you have 38 special control areas where energy supply and demand are managed and balanced, and not much coordination across those boundaries,” Gravely said. “That worked OK when you turned power plants on and let them run.
“Now, with more wind and more solar, when things are going up and down in a less predictable way, it makes more sense to have joint control.”
He said the study may be complete this year, with a working agreement in place by 2017. Others are skeptical the process would unfold in two years.
“It’s going to take a while to get there, but the general idea of it is pretty clear,” said Heutte of the Northwest Energy Coalition. “There’s very little chance of it being in place in 2017.”
He said the coalition, like the Sierra Club, has not yet taken a position on PacifiCorp joining forces with the California Independent System Operator. However, Carl Zichella, an expert in power grids and energy transmission for the National Resources Defense Council, called the idea a “bold step.”
“This is a very big deal,” he wrote in the NRDC blog, “Switchboard,” in April.
Clean Power Plan
For one, he said Thursday, the proposed arrangement would create incentives to build more windmills and solar farms; it also reduces redundancy in building generation plants and transmission lines.
“What this results in is a much more efficient use of the existing system,” he said. “It helps you understand what you need to build if you want to get the most out of renewables.”
Heutte agreed. In theory, adding PacifiCorp to the California grid adds not only fossil-fuel generating plants, but renewable power, as well. Electricity generated by wind and water in the Pacific Northwest could end up in California during times of peak demand, and solar power could flow from California when it has a surplus.
“With a system like this …, you have things operating in real time,” Zichella said. “You’re able to dispatch the least-cost (power) to meet the need, which is good for renewable energy. In almost every case, it’s dispatched first.”
Finally, PacifiCorp joining the California Independent System Operator could help the states involved meet goals laid out in the proposed Clean Power Plan put forth last year by the U.S. Environmental Protection Agency to reduce by 30 percent the carbon emissions from power plants burning fossil fuels, primarily coal. The plan lists emission targets for each state to reach by 2025, but allows them to work together to meet those goals.
The EPA is scheduled to release final rules later this year. States have another year to submit individual plans, or longer if they band together. Linking generation facilities and transmission lines in six states could lay the groundwork for those states to create a larger plan to reduce carbon dioxide emissions.
“This kind of market facilitates that, but it’s not by itself the answer,” Zichella said. “It’s part of the plumbing that makes a multistate plan viable.”