Written by Allen West, Energy News Energy

While the ongoing effort to expand the West’s power markets is now focused on California, experts say regionalization could follow multiple paths, not all of them through Sacramento.

In most of the Eastern U.S., the electrical grid is organized under regional transmission operators, or RTOs. The West, with the exception of California, is not, and various stakeholder groups have been meeting to resolve that.

Regardless of how these debates play out, many regard a unification of the Western grid as inevitable, with millions of dollars of potential savings to be gained from meeting electrical demands with increasingly cheap renewable energy such as is being produced by rooftop solar collectors in California or the giant wind farms east of the Rockies.

In late April, Xcel Energy withdrew from the Mountain West Transmission Group to pursue benefits of an expanded market for electricity. The announcement surprised even key individuals in the Denver-based utility who had been working with eight other utilities operating in Colorado, Wyoming and New Mexico on potential alignment with the Little Rock-based Southwest Power Pool.

Just how much money is at stake was suggested several days after Xcel’s announcement when the California Independent System Operator—or CAISO—reported that the organization’s Energy Imbalance Market had produced $330 million in savings since it was launched in November 2014. In just the first quarter of 2018, CAISO said, the market had produced $42.08 million in savings for the six participating utilities operating in seven Western States. None are in Colorado. Comparatively little up-front capital investment was required for the limited functions of the imbalance market.

And a report released last week found that regionalization could save California alone more than $1.5 billion in energy costs by 2030.

“Utilities realize we have to do something,” says Jennifer Gardner, staff attorney for Western Resource Advocates, an environmental group that operates in seven Southwestern states. “Regional markets would make a lot of sense. They work in other parts to the country. We need these markets to integrate all of the renewable energy.”

If regional markets have been talked about in the West for well more than a decade, the seriousness of the conversation has accelerated in the last few years. “We are seeing increased movement toward more regionalized markets in some fashion,” says Dr. Laura Nelson, executive director of the Utah Energy Office.

Read the full article, here.

Share This