David Bobzien, the director of the Nevada Governor’s Office of Energy, summed up the key takeaway from the Western Interconnection Regional Electricity Dialogue (WIRED) initiative in one word.

“Coordination, coordination, coordination,” Bobzien told listeners on a webinar hosted by the Committee for Regional Electric Power Cooperation and Western Interconnection Regional Advisory Board (CREPC-WIRAB) Friday.

A participant in the WIRED effort, Bobzien was referring to the initiative’s conclusion that Western states must step up collaboration on grid planning to accomplish their increasingly ambitious policy targets — even if their goals don’t always align.

The initiative was conceived last year to develop recommendations to Western governors on how to improve regional coordination in three key areas: transmission planning and development, resource adequacy and greenhouse gas accounting. Final draft reports for each topic area were issued this month.

“All three areas of the WIRED initiative … are really front-and-center, important issues for us right now in Oregon, as both policy and the market are rapidly driving the clean energy transition in our state,” said WIRED participant Kristen Sheeran, energy and climate change policy adviser to Oregon Gov. Kate Brown. “And as Oregon makes that transition, we want to continue to do so in ways that complement the efforts of our other Western states.”

Bobzien said he advised his boss, Nevada Gov. Steve Sisolak, that grid coordination would be “the most complicated, wonky energy policy issue you will face as governor,” but also one in which he could make the most impact.

“And you can make that impact by working and continuing in the conversation with your fellow governors across the West,” he said.

Bobzien pointed out that even states without strong clean energy policies are home to investor-owned utilities that “are making similar commitments on carbon reduction” as the most aggressive states.

The WIRED initiative is a collaboration between Colorado State University’s Center for a New Energy Economy (CNEE) and the Western Electric Industry Leaders (WEIL) Group, which comprises utility executives from 10 U.S. states and one Canadian province.

WEIL Steering Committee member Jim Shetler, general manager of the Balancing Authority of Northern California, said WEIL members last year became concerned about the way generation and transmission operations could be affected by the “ever increasing” number of individual state energy policies with different criteria for renewable portfolio standards and greenhouse gas accounting.

“We recognize that the physics governing the grid don’t necessarily respect state boundaries, and so we have to plan for that,” Shetler said.

Former Colorado Gov. Bill Ritter, now CNEE director, said he was invited to speak at a 2019 WEIL meeting after several states had passed climate and clean energy measures. He recounted that WEIL members asked him how states could improve their policy coordination and how governors could make decisions more collaboratively.

“I said, ‘That’s really not going to probably happen,’” Ritter said. “In some conversations, you might get some agreement among Western governors, but to have states all agree on the same renewable portfolio standard or agree on the same climate targets — that’s not going to happen.”

But Ritter said that conversation then turned to what steps the industry could take to “move us toward greater regionalization and collaboration.”

He accompanied utility CEOs at talks with governors about the “benefits of a regional conversation,” something the state leaders said they were ready to convene.

“We made an agreement with both the governors’ offices and the utilities that we did not have a preordained conclusion here about a regional market, about expanding something or tying into another thing,” Ritter said.

Tricky Transmission Planning

Those discussions gave rise to WIRED.

“We know that there will be further incorporation of renewable resources across the Western grid, and as pointed out by the Western Flexibility Assessment, if we don’t address some of these issues, we’re going to have some challenges in the 2030s and beyond,” Bobzien said.

Published by the Western Interstate Energy Board in December 2019, the assessment found that Western states must improve policy coordination to meet the flexibility needs of the Western Interconnection as states advance on their clean energy targets over the next 15 years.

Bobzien, who took part in the WIRED working group studying transmission planning, said transmission development must be linked to resource planning because the two are “very tightly” intertwined.

He also noted that cost allocation is the “trickiest” aspect of transmission planning. “Trying to figure out cost allocation nirvana is going to be important over time.”

The final draft report from the transmission working group lays out several recommendations for governors to consider in their directions to state agencies, utilities and planning entities, including:

• creating a mechanism to better coordinate development of integrated resource plans “informed by potential transmission implications and requirements” and ensuring those needs are addressed in relevant transmission planning processes;
• establishing a format for information sharing;
• supporting coordinated study processes and timelines;
• creating a decision-making framework that includes principles for fairly allocating costs for new projects; and
• setting financial incentives that recognize and support the long-term nature of transmission investments.

The working group also advised governors to pledge that their states will evaluate their current resource planning processes “to help ensure implementation of resource planning and transmission needs identified in a formal multistate process.”

While Bobzien said it was important for the West to improve coordination around transmission planning, he also counseled to avoid “stepping on toes.” The goal at this point is to continue the conversation around collaboration, he said.

“No matter what your policy is … you are in the same boat as the rest of the West,” Bobzien said.

‘Big and Critical’

Speaking for the WIRED resource adequacy working group, Sheeran said “it’s important to note that different states are at different starting places when it comes to resource adequacy.”

Oregon’s Sheeran said she joined the working group because RA has “already emerged as a really big and critical issue” in the state.

“And this was even before the potential for rolling blackouts across the West this summer sort of greatly elevated the profile of this issue and fixed more eyes on this working group,” Sheeran said.

The group first set out to agree on a rough definition of resource adequacy, she said. It arrived at “a forward-looking planning framework to identify future resource needs, considering transmission deliverability, resource capabilities and limitations, [and] planning for uncertainties,” such as generation and transmission outages and variability in demand.

“There are many definitions of resource adequacy out there, and the goal wasn’t to elevate this one above others,” she said.

But the working group did start from the assumption that some kind of regional RA program would be beneficial for the West from a cost, reliability and policy perspective. With that in mind, the group recommended that governors issue a multistate declaration recognizing those benefits while working together to support:

• establishment of a regionwide framework “of sufficient transparency, granularity and quality” that evaluates sub-regional RA and “provides information helpful for ‘unlocking’ regional diversity benefits and investment cost savings”;
• advancement of regional or sub-regional RA programs and industry-driven RA programs; and
• creation of state-driven RA programs that can be “harmonized” with regional or sub-regional RA frameworks or a regional RA assessment framework.

Asked whether the recommendations would have an impact on the Northwest Power Pool’s current RA effort, Sheeran said, “We want to ensure this work is supportive and complementary to that effort.”

Another questioner asked how the recommendations could guide Oregon in developing a state-level RA program.

“I don’t think we’re looking for a state-level program,” Sheeran responded, noting the state is instead looking to participate in regional and sub-regional efforts and trying not to get “further out ahead of our neighbors.”

Lauren McCloy, senior policy adviser to Washington Gov. Jay Inslee, said the efforts of the GHG accounting working group were driven by the need to determine a more uniform way to identify the clean energy attributes of resources despite differences among states’ clean energy programs.

McCloy said the group also wanted to support or maintain compatibility with other economic sectors subject to clean energy standards (CES) and also account for the potential increase in electric load from decarbonization of those sectors.

“We want to make sure we’re enabling achievement of state policy goals,” McCloy said.

The GHG working group urges Western governors “to align and harmonize” GHG accounting methods across states “where possible.” The accounting methodologies don’t have to be identical, but they should be consistent, Sheeran noted.

The group also recommends creating attribute-based systems — which are designed to prevent double-counting of clean energy attributes in different programs — for compliance with RPS and CES programs and renewable and non-emitting fuel type accounting. It also advises states to work collectively and with the Western Renewable Energy Generation Information System (WREGIS) “to consider whether a regional, attribute-based system may be developed for emissions accounting.”

The group additionally recommends that any market design “should reflect or support state policy where appropriate and should not undermine state policy objectives.” Relatedly, “state policy should be informed by market design to avoid unintended consequences that could undermine the operation of wholesale electricity markets.”

No Missteps

Ritter lauded the efforts of the working groups, saying, “This was a broad group of stakeholders that worked very hard to get to a place of consensus.”

He said the goal of the initiative is “to get some agreement on what the process would look like” for engaging in further discussion and collaboration among Western states. WIRED participants are now asking governors and WEIL participants to take time to review the final draft reports.

The group hopes to have something formal to present to the Western Governors’ Association meeting next May.

Ritter acknowledged that “we don’t know what shape that takes, whether it’s a memorandum of understanding or a Western governors’ resolution or some other thing.” The document would help governors decide whether they want to participate in the next part of the process, which would “really be about fulfilling the recommendations and doing a more substantive bit of work on these kinds of issues” and getting “deeper into regionalization.”

“There was no foregone conclusion about a regional market, but it’s also not excluded as one of the possibilities,” Ritter said. “But in watching what has happened to these discussions before about regional markets, one thing you don’t want is the discussion to be undermined by a false step, or misstep, or politics, or a lack of a discussion about governance that had broad participation from all of the states and all of the stakeholders.”