Sacramento, CA – Consumer Watchdog wrote to California State Senators today warning them that a pending proposal, SB 540 (Becker) to create a Western regional grid could lead to overriding of key state environmental laws, including the Renewal Portfolio Standards (RPS), which sets deadlines for clean energy goals.
“If California’s renewal portfolio standard is invalidated, this is a vote you will be remembered for,” wrote Consumer President Jamie Court, who was excluded from Wednesday’s hearing on the proposal before the Senate Energy Committee. “It should not be taken lightly. Many of the generation of legislators who voted for electricity deregulation regretted it and it haunted many. Consumer Watchdog is calling on every Senator who votes for the Pathways plan to take a pledge to resign from public office if the renewable portfolio standard is invalidated under a legal challenge made because of Pathways. Had those deregulation legislators had to make a similar vow, California would have avoided a huge disaster.” Read the letter here.
“The sovereignty issues that have doomed the Western Regional Transmission Organization (RTO)/Pathways, and prevented it from becoming law, have not gone away, in fact they have become more perilous following the presidential election,” Court wrote, pointing to an analysis of a previous proposal by the Senate Judiciary Committee in 2018.
The Committee stated,“ This change in governance would place control over California’s energy market in the hands of a Western states RTO heavily dominated by coal interests (the largest coal-producing states in the U.S.) and under the direction of the Trump administration. California’s policies for transitioning to renewable energy—and initiatives to develop distributed or decentralized energy resources—would be subject to review and revision by a market authority that is not interested in either.” Trump’s Federal Energy Regulator Commission (FERC) would have greater jurisdiction to strike California’s clean energy laws.
“The question remains to you: ‘Can you trust Trump’s FERC with our environmental laws’” Court stated. “If the answer is no, you need to vote against Pathways. If you vote for it, you should do it soberly with a pledge to resign from public office if our environmental laws are invalidated. You are making a bet on California’s green energy future.”
Court mentioned the motivation for SB 540, noting the bill’s author Senator Josh Becker is from the Silicon Valley: “What has happened is the need for more power due to the inexhaustible hunger of data centers to power AI has caused some people to conveniently forget the Achilles heel of Pathways. … The IBEW unions, after dire warning about sovereignty issues in 2023, are now on board. This follows a huge boon to IBEW electricians nationally to staff data centers and new contracts for the union from PacifiCorp, a principal backer of the Western grid.”
Court wrote that so-called ‘guardrails’ put up by SB 540 were meaningless.
“Under Pathways as envisioned in SB 540, the CAISO remains the transmission grid operator, but it will transfer its right to propose tariffs (the rules for how the markets and the transmission grid operate, called Section 205 filing rights) to a Delaware (DE) corporation, called a Regional Operator (RO). The Delaware RO will control all the tariffs dictating how all electricity markets operate AND how California runs its grid. California would give up its right to demand that its environmental, consumer and health safety laws be followed.”
He noted some of the ways that California environmental law could be overturned by the governance change:
Any market participant or prospective market participant, such as a coal plant owner, can challenge California’s RPS, as a violation of the Interstate Commerce Law and invalidate the RPS law.
It could allow Trump to require CA (and the entire regional market) to subsidize the purchase of coal-fired power throughout the West. If Trump requires coal subsidies in regional markets, as he promised and started to do in 2018, California will be required to buy and use electricity made from coal.
The regional operator could require California help pay for transmission lines in other states in the regional market that support coal and nuclear power plants or are costly and unneeded. In January 2025, PacifiCorp reneged on its promise to shut down its Utah coal plants. California could be required to subsidize their coal power instead of developing its own clean power.
“The so-called ‘guardrails’ in the SB 540 proposal are not safeguards,” Court wrote.” Even if CAISO remains the balancing authority, the Delaware corporation will hold all the cards and possess the authority to make the rules for both the markets and the transmission grid, solely subject to FERC’s jurisdiction. The idea that a statement of corporate governance saying that the DE RO will respect California’s right to set policies will be binding on the RO or prevent market participants who want to challenge California’s environmental laws is laughable. Giving CAISO the power to pull the trigger in 2027 is only delaying the inevitable — CAISO and its free market appointees are big backers of Pathways. And no exit ramp exists if this experiment goes bad – the new Regional Operator – with the Trump FERC — will decide whether California can leave the new unproven system, and how much it will cost California consumers to end the failed experiment.”
Consumer Watchdog asked to participate in the Senate Energy Committee information hearing on Pathways on March 12th, but was denied a seat on a panel, despite being one of the only dissenting voices to the utility/Big Energy establishment.
“The backers of SB 540 don’t want you to know its real motto: ‘More Power For AI, Forget Climate Change,’” said Court.
