By Hudson Sangree

FOLSOM, Calif. — As he prepares to leave CAISO this summer, CEO Steve Berberich said a regional transmission organization is essential for maximizing renewable energy use across the West, but that it won’t coalesce under the ISO unless California lawmakers admit other states to its Board of Governors.

California’s governor appoints the five members of CAISO’s board, and the State Senate confirms the appointments. The idea that heavily Democratic California could dictate energy policy to the more conservative states of the Interior West has proven the major obstacle to forming an RTO under CAISO. Similarly, California politicians don’t like the idea of sharing authority over the ISO with coal-burning states such as Arizona and Wyoming.

Asked if he could foresee one or more Western RTOs forming in the future, Berberich replied, “I think it’s an imperative.”

In an interview with RTO Insider at CAISO’s suburban Sacramento headquarters last week, Berberich addressed the question of Western regionalization and talked about his impending retirement from the ISO.

CAISO’s Western Energy Imbalance Market allows real-time trading across state lines, and a proposal to expand it to a day-ahead market could enhance its value, Berberich said. But whether the regionalization effort can move beyond the EIM is problematic, he said.

“There is some desire of those in the West to have an RTO, and I fully respect the fact that some of the out-of-state people are certainly not interested in joining the California ISO’s RTO because of our governance,” he said. “I believe that it’s in California’s best interest to have a regional RTO, and that it be this RTO that is extended. However, I believe that the possibility does exist that other RTOs will form in the West eventually.”

Rocky Mountain states, for instance, could band together, leaving out the West’s coastal states, he said.

“It’s absolutely essential for high levels of renewables to have a regional grid,” Berberich said. “And I take note [that] … Iowa sometimes can meet 100% of its load with its wind fleet. Why? Because they’re part of MISO, and because MISO is such a giant footprint, they can absorb that kind of movement. In Europe, they run the day-ahead market across the entire continent, and they leverage each other’s assets. That’s how you have to do it.”

Although California could go it alone, it could achieve lower energy costs and higher carbon reductions in an RTO with other states, he said. (See Can Calif. Go All Green Without a Western RTO?)

That will only happen if other states are represented on the CAISO board, Berberich said. Even states with similar carbon-reduction and renewable-energy goals, such as Oregon and Washington, won’t join a CAISO RTO without a say in its governance, he said.

“If this ISO is to become the Western RTO, the governance has to change,” Berberich said.

That will be a tough sell in the State Capitol. Lawmakers have already rejected efforts to alter CAISO’s governance structure, most recently with a bill that languished in 2018. (See Western RTO Proponents Vow to Keep Trying.)

“Ultimately, I respect that the policymakers downtown in Sacramento are going to have to make this decision,” Berberich said. “It won’t be ours to make.”

‘The Right Time’

Berberich, 56, a Missouri native, earned business degrees from the University of Tulsa and worked in finance, technology and utilities, including a stint at the former TXU Corp. when it entered the newly deregulated Texas energy market in the early 2000s.

He came to CAISO 15 years ago, serving as vice president of technology, chief financial officer and chief operating officer before taking the helm as president and CEO nine years ago. Berberich earned nearly $1.5 million in 2017 according to CAISO’s Form 990 filing as a nonprofit organization with the Internal Revenue Service.

The ISO announced his plans to retire early this summer on Feb. 19. (See CAISO CEO Steve Berberich Retiring.)

The announcement came soon after the retirements of two other CAISO leaders in January. Keith Casey, vice president of market and infrastructure development, and Nancy Traweek, executive director of system operations, both retired after more than two decades at the ISO. (See CAISO Announces Leadership Changes.)

The series of high-level retirements are coincidental, each driven by personal circumstances, Berberich said.

“I think it’s the right time for me,” he said, explaining that CEOs and the organizations they lead both need a change every decade or so.

Berberich said he and his wife are planning to move to Dallas to be near their grandchildren. He said he’s not done working but hasn’t decided his next move yet.

The ISO has begun a nationwide search for his successor.

Restoring Trust

Recounting his accomplishments as CEO, Berberich said, “First and foremost, it’s showing the world how you can operate a grid with large amounts of renewables on it and do it in such a way that it’s reliable and efficient and effective — and I think we’ve done that.”

Peaks of wind and solar on CAISO’s system have reached more than 70% and total renewables serving demand topped out at more than 80% on May 15, 2019.

“I can remember when people were concerned about 20% renewables on the grid,” Berberich said. He looked at the board in CAISO’s control room last Tuesday around noon and said, “Right now we’re at 54% on the grid.”

Challenges lie ahead, he said, including serving peak and residual-peak load as the sun sets and solar goes offline, he said. CAISO planners predict potential shortfalls starting in 2021. (See CAISO, CPUC Warn of ‘Reliability Emergency’.)

And whether electric vehicles will absorb excess solar energy during the day or exacerbate California’s peak evening demand remains in doubt. (See EVs Could Soak up Solar or Exacerbate ‘Duck Curve’.)

“EVs are either a marriage made in heaven or a marriage made in hell,” he said.

Another major accomplishment, Berberich said, is the restoration of trust following California’s energy crisis of 2000-2001 and the creation of the EIM, which is on track to have significant participation from entities in every Western state by 2023.

“The EIM has shown that we have established credibility and trust in the region, which was sorely damaged during the energy crisis, and I think being able to turn that around completely to the fact that they would trust us to participate in our market is a big change,” Berberich said.

He said he’s melancholy about leaving CAISO and hopes to be remembered by its staff as a good leader.

“The proudest thing I have here is the people and the culture that we’ve been able to develop at the ISO to embrace the changes facing us,” he said. “We have an amazing group of people here, and I’m just simply humbled to have been able to be part of that.”