By tying together multiple independent electrical grids in the West, California could meet its goal of generating 50 percent of its energy from renewable sources and save consumers and businesses up to $1.5 billion a year by 2030, according to a new report.
The report was released by the Folsom-based California Independent System Operator, which manages about 80 percent of the electric grid in California.
The regional grid report was a requirement of Senate Bill 350, the Clean Energy and Pollution Reduction Act of 2015. That legislation requires California to get 50 percent of its energy from renewable sources by 2013.
An integrated regional grid would allow for better use of resources through advanced planning, lower-cost power purchases and cost sharing, said Cal ISO spokeswoman Anne Gonzales. It also could allow costs to be lowered through economies of scale.
The regional energy market that a unified grid could serve could reach as far north as the Canadian provinces of Alberta and British Columbia, as far south as the Mexican state of Baja California and as far east as western South Dakota and the Western tip of Texas.
Other utilities would have to join the proposed western grid, however, which would require the development of a new governance structure.
Not everyone is happy with the concept. “As it is presented, this is an effort to deregulate the grid,” said Liza Tucker, consumer advocate with Consumer Watchdog, a non-profit, non-partisan group based in Santa Monica. “Californians will lose control of their energy future.”
The operators of grids in several western markets have already been working together on energy imbalance markets, which allow different areas to dispatch oversupplies of energy to one another, resulting in lower rates for all users. The energy imbalance agreements have saved millions of dollars per quarter.
However, the energy imbalance market is only a spot market, where grid operators can buy and sell energy to meet demand five and 15 minutes before it is needed by consumers. The proposed western grid would be a contract market for interconnection, and not just a spot market.
So far, the energy imbalance market includes Cal ISO; Portland, Ore.-based PacifiCorp., which operates the grid in parts of Oregon, Washington, Utah, Wyoming and Northern California; and Las Vegas-based NV Energy. Puget Sound Energy of Bellevue, Washington, will join the energy imbalance market in October.
Mark Anderson covers technology, agriculture, banking and finance, venture capital, energy, mining and hospitality for the Sacramento Business Journal.