Delaware has approved the certificate of incorporation for the Regional Organization for Western Energy (ROWE), and an executive search firm has been hired to vet candidates for the organization’s initial board, the West-Wide Governance Pathways Initiative’s Launch Committee announced.
ROWE was incorporated Jan. 21, and the committee is preparing the next steps in establishing the organization that will assume governance over CAISO’s energy markets, consultant Sarah Davis said during a Pathways stakeholder meeting Jan. 30. Next up is registering for nonprofit status and submitting the bylaws and conflict-of-interest policy with the Internal Revenue Service.
The Launch Committee’s Formation Board must approve the IRS documents. The Formation Board’s sole purpose is to serve in an administrative role before the initial board takes over, Davis explained. It will approve the initial board’s first five members and hand off its duties to them. (See Pathways Takes Key Step Toward Establishing ROWE.)
“This is a big milestone,” she said.
The committee has hired Lyceum Leadership Consulting to run the selection process for the initial board. Members of the committee’s nine sectors have each selected a representative to serve on the Nominating Committee, which began its work Jan. 23, according to Davis.
The work will be split into two phases. The first phase includes refining the search strategy and developing the role specification for the full seven-member board. The second phase includes conducting the board search with the goal of having the first five members seated by July.
ROWE is the product of California Assembly Bill 825, which implements Pathways’ “Step 2” plan to create an independent organization to oversee CAISO’s Western Energy Imbalance Market and soon-to-be-launched Extended Day-Ahead Market, and authorizes the ISO and California’s investor-owned utilities to join ROWE. (See Newsom Signs Calif. Pathways Bill into Law.)
One goal in establishing ROWE was to remove what some see as a barrier to wider participation in CAISO-run markets by ensuring they are not governed solely by officials and stakeholders in California.
The market governance structure is still being defined by a working group, Davis said.
“The work group has a few objectives,” she explained. “The first is providing clarity for FERC oversight. The second is providing clarity for stakeholder processes. We’re also wanting to set up a structure that we can use for a potential transition to Step 3 at some point in the future.”
Step 3 in Pathways’ plan includes expanding the scope of ROWE’s functions and services.
“We’re also being mindful of the resource commitments for these potential approaches and those constraints,” Davis said.
Some areas will still be under joint authority between CAISO and ROWE, but sole authority over market policy rules will go to ROWE, Adam Schultz, CAISO manager of regional coordination, said during the meeting.
The joint areas are not related to market policy but concern certain overlapping areas such as financial and corporate issues, he clarified.
The Launch Committee seeks between $7 million and $8 million to fund ROWE’s implementation costs over the next two years, Jim Shetler, general manager of the Balancing Authority of Northern California, said during the meeting. The committee is exploring funding primarily through stakeholder contributions, grants and debt financing.
“We’re looking at somewhere around $750,000 to $800,000 in stakeholder contributions that we should have here in the next month or so,” Shetler said.
The committee anticipates an additional $300,000 in grants, Shetler added.
With a balance of about $1.1 million, Shetler said the committee has enough money to continue operations through “[the middle] to third quarter [of] this year.” The committee is working with several banks to fund the remaining portion through debt financing, he said.
