Assembly Bill To Create A Multi-State Electric Grid Moves Forward

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Assembly Bill To Create A Multi-State Electric Grid Moves Forward


June 18, 2018

Assembly bill to create a multi-state electric grid moves forward

A bill that would create a regional transmission network to serve the electricity needs of California and other Western states has drawn support from industry leaders but opposition from a watchdog group that says it would boost prices and weaken the state’s move toward clean energy.

Assembly Bill 813, authored by Assemblyman Chris Holden, D-Pasadena, and Assembly members Jim Patterson, R-Fresno, and Bill Quirk, D-Hayward, was introduced in February 2017 and has been amended several times.

Easier access, more energy

AB 813 has been promoted as a network that would allow California’s Independent System Operator to secure energy more easily during peak times. CAISO oversees the state’s massive electrical power grid. An expanded grid, the legislation reasons, could draw upon a large and diverse range of power generation sources — including wind, solar, geothermal and hydropower –and better respond to shifts in energy demand.

Kellie Smith, a spokeswoman for Assemblyman Holden and chief consultant for the Assembly Utilities and Energy Committee, said California’s transmission network and the networks of 13 other Western states are already interconnected. But the sharing of energy has been on a piecemeal basis.

“The other areas are controlled by 37 balancing authorities, and they are all dispatching power on that system,” she said. “We already share some power with those entities. This bill would facilitate an expansion of the ISO so other operators could choose to join in.”

AB 813 would require the formation of a Western states committee that would give each state a voice in rate structures, sharing of resources and other issues related to the expanded network. California would have three members on the panel, Smith said, and the expanded energy network would fall under the control of the Federal Energy Regulatory Commission (FERC) and the Federal Power Act.

Help in meeting clean-energy goals

A 2016 CAISO study shows a multi-state transmission network would help California reach its 50 percent renewable energy goal by 2030 while also saving consumers up to $1.5 billion. It would also reduce greenhouse gas emissions and add jobs in California, the report said.

The American Council on Renewable Energy supports AB 813. In a letter sent to Holden’s office in April, the council said the expanded energy network would help manage the high levels of renewable energy penetration necessary to reach the state’s climate goals, while also helping other states in the region “make the transition to low-carbon generation resources.”

It all sounds good, but Consumer Watchdog isn’t buying it. The organization’s new report, “Betting Against the House,” raises several issues.

The Santa Monica-based group says turning the clock back to “the deregulation-era scheme of a Western wholesale power-trading market” threatens ratepayers with speculative profiteering and a derailment of California’s transition away from fossil fuels.

Under AB 813 California would no longer run its own electricity market, said Liza Tucker, who authored the Watchdog report. Legal challenges and changes in federal policy, she said, could force California to buy dirty power generated in other states by coal-heavy utilities.

“Our power grid is just fine,” she said. “We trade with neighbors based on supply and demand. Of course, we could make it better … but we don’t need to hand control over to the federal government.”

The Federal Power Act gives FERC exclusive power to regulate wholesale prices across state lines. Maryland and New Jersey, which belong to a regional power trading network, have already seen their own energy procurement policies invalidated in court, Tucker said.

“Our control will shift from the California Public Utilities Commission to a new kind of octopus,” she said. “Traders will be betting against us — and consumers will lose.”

The legislation is scheduled to be heard Tuesday, June 19 by the Senate Energy, Utilities and Communications Committee.


Kevin Smith handles business news and editing for the Southern California News Group, which includes 11 newspapers, websites and social media channels. He covers everything from employment, technology and housing to retail, corporate mergers and business-based apps. Kevin often writes stories that highlight the local impact of trends occurring nationwide. And the focus is always to shed light on why those issues matter to readers in Southern California.

Follow Kevin Smith @sgvnbiz

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