California’s power grid operator, PacifiCorp win OK for Western market

The California Independent System Operator, which runs power markets and long-distance transmission lines for most of the state, has won approval from federal regulators to start a real-time electricity market for several Western states.

The Federal Energy Regulatory Commission conditionally approved Cal-ISO’s request Thursday to start a regional market. Billionaire investor Warren Buffett’s PacifiCorp power utility, which filed to be included in the market, will be the first participant in the new Western system. FERC will allow the two operations to open an Energy Imbalance Market on Oct 1.

The system would allow utilities and generators across six Western states, from California to Wyoming, to trade electricity more efficiently.

“It will broaden the energy market and allow authorities access to more secure, efficient dispatches,” said Steve Berberich, Cal-ISO’s chief executive. “By allowing PacifiCorp access, California authorities will have increased interplay with energy authorities in other Western states.”

PacifiCorp is the energy authority for Idaho, Wyoming, Utah, Washington and Oregon. Combined with Cal-ISO’s reach to about 80% of California, the two entities will be capable of dispatching about 70,000 megawatts of power, enough to supply more than 50 million homes.

FERC said it is hopeful that the market will be able to better manage the influx of renewable power sources, such as solar and wind-generated electricity, the supply of which is inconsistent.

Currently, 38 energy authorities from Canada to Mexico balance and manage energy fluctuations on their own power grids. The new system is a major first step toward organizing the market and saving consumers money, Berberich said.

A study by Cal-ISO and PacifiCorp of the benefits from an energy imbalance market projected annual consumer benefits of as much as $129 million from economic efficiencies, improved use of renewable power sources and increased reliability.

“The market will also lessen the environmental footprint of the energy system by allowing more renewable in and lowering cost,” Berberich said.

Although consumers won’t see a dramatic drop in energy bills, there will be marginal differences, according to FERC. The market also will help California minimize the cost of electricity, the commission said.

Nevada Energy filed with the FERC to participate in the system and hopes to join next year.

“This is about enhancing reliability and making sure that variable resources growing in the West are better managed,” FERC commissioner Philip Moeller said.