The West-Wide Governance Pathways Initiative’s Launch Committee estimates it will cost about $7.1 million to launch the independent regional organization (RO) that eventually will oversee energy markets in the West, staff said during a May 30 presentation, while noting federal funding for the effort is uncertain.

The budget is divided into three categories: preparation, formation and implementation. The estimated total cost for all three phases is about $7.1 million, including a 10% contingency cost, said launch committee member Jim Shetler, general manager of the Balancing Authority of Northern California.

The draft budget runs from Jan.1, 2025, to Dec. 31, 2027, when tariff funding takes effect for the RO. It includes costs for activities like project management, legal services, hiring an executive director and general counsel, and finalizing a draft tariff and service agreements.

However, the committee has yet to receive confirmation on whether the U.S. Department of Energy plans to issue nearly $1 million in funding. Pathways received a commitment under former President Joe Biden’s administration to underwrite the committee’s efforts to establish the RO to oversee CAISO’s Western Energy Imbalance Market (WEIM) and Extended Day-Ahead Market (EDAM). (See Feds Pause $1M Pathways Initiative Funding, Group Leader Says.)

The award was issued through the Pathways Initiative’s philanthropy adviser, Global Impact, which the group’s Launch Committee partnered with earlier in 2024 to secure outside funding for its operations, which so far have been supported by donations — and volunteered staff — from its participants.

President Donald Trump’s administration on Jan. 27 paused all federal grants and loans, according to a memo issued by the White House’s Office of Management and Budget.

“We are still looking to try to engage to see if we can get a DOE grant, but we’re not assuming that that will be the case,” Shetler said.

Instead, the committee seeks donations from stakeholders to support the effort, Shetler added.

“I’ll just let you know I’ve been starting some initial dialog with the utilities that have indicated support for EDAM, and I’m not suggesting the utilities would support all of the $7.2 million, but at least we have started dialog around how we might support that,” Shetler said.

Kathleen Staks, executive director of Western Freedom and the Launch Committee’s co-chair, also provided an update on the RO’s board members, stating that the committee hopes to seat a board by July 2026 and no later than January 2027. (See Pathways Inches Closer to Seating RO Board.)

Per the committee’s draft proposal, the board will have five members, with two additional seats added after FERC approves the tariff changes and RO funding is secured.

The initial board will consist of independent members that will negotiate with CAISO, Staks said. She noted the board “would not yet have any authority over the markets because that authority change does not happen until FERC approves the tariff change.”

The five initial members would serve until the RO tariff goes into effect, and service during this period would not count toward the members’ term limits, according to the committee’s proposal.

The committee has proposed that when the RO is fully implemented and has a seven-member board, two of the seats would be one-year terms; two seats would be two-year terms; and three of the seats would be full, three-year terms.

Staks noted that seating the five-member board in July, as opposed to a smaller board or seating at a later date, “will create a pretty significant increase in our budget.”

But the committee did not want the budget to be a “limiting factor for the important role that this independent body will play as we move forward,” Staks said.

“We decided that we would prioritize having some of these independent board members in place earlier, so that there really is that separation and independence for the negotiations with the CAISO,” Staks said.