September 25, 2023
Backers of Independent Western RTO Seek to Move Quickly
California PUC President Alice Reynolds (left) and Oregon PUC Commissioner Letha Tawney at CAISO's EDAM Forum in Las Vegas
California PUC President Alice Reynolds (left) and Oregon PUC Commissioner Letha Tawney at CAISO's EDAM Forum in Las Vegas | © RTO Insider LLC

LAS VEGAS — The coalition of utility commissioners that this summer proposed the creation of an independent Western RTO is wasting no time getting the project up and running.

That spells good news for CAISO, one of the key beneficiaries of the effort as it seeks to stand up its Extended Day-Ahead Market (EDAM) in the face of increasing competition for participants from SPP’s Markets+ offering.

The group, which includes regulators from Arizona, California, New Mexico, Oregon and Washington, on Tuesday issued a notice inviting a broad range of stakeholders from across the Western U.S. and Canada to “help build” Phase 1 of the effort, which will include “deciding on the form, mission, and scope of an entity with independent, West-wide governance.”

“This effort, the ‘West-Wide Governance Pathway Initiative,’ seeks to build on the benefits of [CAISO’s] Western Energy Imbalance Market (EIM), realize the potential benefits of an extensive footprint for the Extended Day-Ahead Market (EDAM), and enable a path forward for a potential West-wide fully organized market (a Regional Transmission Organization or RTO), should participants in this effort so choose,” the notice said.

The regulators first floated the RTO plan in a July letter just as the growing competition between CAISO and SPP raised the prospect that the West could become divided into two day-ahead markets that eventually would evolve into separate RTOs.

The commissioners’ proposal cited studies showing the West would reap the greatest economic and environmental benefits from a single market — and one that pointedly includes CAISO. The plan seeks to create a workaround for an issue that for years has bogged down CAISO’s attempts to expand into an RTO: its state-run governance.  (See Regulators Propose New Independent Western RTO.)

‘With All Urgency’

In the notice issued Tuesday, the regulators made clear they plan to pursue an aggressive timeline for laying the groundwork for the effort. They seek to “finalize key elements of the independent entity’s governance” by December and to select and seat a founding board by January. The Regulatory Assistance Project will provide “staffing and facilitation” for the initial phase, which will be led by Carl Linvill and Jennifer Gardner, both former members of the WEIM Governing Body.

“Funding derived exclusively from 501(c)(3) sources will support the initial work of this initiative,” the notice said. “This arrangement will be evaluated over time and will likely require supplementation as the workload intensifies. We commit to ensuring that the initiative has access to consultants and advisors on the broad array of topics that may become relevant as the work proceeds.”

The commissioners acknowledged that Phase 1 of the effort “is being facilitated outside of any existing organization or decision-making process and asked stakeholders to provide feedback on a series of questions — outlined in the notice — about how to structure the stakeholder process. Comments are due by Sept. 11.

“I think there’s a lot of work in front of us to make sure that stakeholders are widely engaged, that public power has a seat at the table, [and] that the [investor-owned utilities], the public interest organizations, the consumer advocates are  all invited into that conversation and that it moves with all urgency,” Oregon Public Utility Commissioner Letha Tawney, a signatory of the July letter, said Wednesday in Las Vegas at a forum focused on CAISO’s EDAM.

“We propose a bit of a scope, decisions about a legal entity, a charter, a mission, a founding board. That’s ambitious,” Tawney said. “I’d love to hear, is that sufficient? Is it insufficient? Given how ambitious it is, is something else feasible?”

Speaking at the EDAM forum, California Public Utilities Commission President Alice Reynolds said the July letter was intended to take the problem of CAISO’s governance off the table. The process ahead, she said, will need to examine what an independent entity “needs to look like.”

“How we can build this so that there is an entity to provide the full range of options for regional cooperation, recognizing that we may not ultimately use all of them. Some of us might, some of us might not, but at least we’d have a path to the full range of benefits,” said Reynolds, who also signed the July letter.

“How can we get there as a region and really confront this 500-pound gorilla in the room of governance?” Arizona Corporation Commission member Kevin Thompson said at the forum. “If we could solve that issue, then let’s solve it and move on for the benefit of not only our utilities, but the benefit of our consumers as well.”

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