As California works to improve its grid reliability and expand access to renewable power, the benefits of connecting with neighboring markets has been amplified.
On Saturday, Sept. 13, the California Legislature passed legislation that will set the stage for an interstate connection. Assembly Bill 825 will pave the way for the state’s transmission regulators and power providers to engage with neighboring markets under the supervision of a regional transmission organization (RTO) for western states.
The bill is being described as the culmination of a “years-long push” to regionalize the western energy markets. Currently, RTOs oversee wholesale power markets in several parts of the country. For example, the MidContinent Independent System Operator oversees power distribution in the midwestern states. PJM Interconnection serves 67 million customers in more than a dozen Atlantic and Southern states from Delaware to Indiana.
A number of factors, including politics and energy policies, have resulted in a fragmented supervision of energy markets in the west. A new Western RTO would allow those states to better connect and distribute power across state lines, increasing supply, improving reliability and stabilizing prices for consumers.
The legislation reflects the goals of the West-Wide Governance Pathways Initiative, an effort launched in 2023 by several Western states “to develop and form a new and independent entity.”
Specifically, the bill authorizes the California Independent System Operator and the companies whose transmission it manages “to use voluntary energy markets governed by an independent regional organization, provided that specified requirements are satisfied.”
The formation of a Western RTO is expected to support the expansion of renewable energy supplies, improve reliability and lower costs. Assembly members Robert Rivas and Petrie-Norris, co-authors of the bill, project the legislation will save California ratepayers more than $1 billion a year.
California Gov. Gavin Newsome is expected to sign the bill.
About The Author
LAEZMAN is a Los Angeles-based freelance writer who has been covering renewable power for more than 10 years. He may be reached at [email protected].
