Elliot Mainzer paid close attention from his home in Oregon as CAISO ordered rolling blackouts in August. He said he was not totally surprised because the ISO had warned of possible summer shortfalls for months.

Now that he’s in charge, CAISO’s new CEO said he is addressing California’s resource adequacy problems, in collaboration with leaders at the state Public Utilities Commission (CPUC) and Energy Commission (CEC), with a “tremendous sense of urgency” to prevent more blackouts next summer.

“Without question, resource adequacy is job No. 1 for California,” Mainzer told RTO Insider. “We need to make sure we adapt to stay ahead of that reliability curve.”

The world’s fifth largest economy is switching from fossil fuels to wind and solar as mandated by landmark state laws, but the transition has proven problematic, in part because of insufficient storage for renewables. Massive wildfires attributed to climate change plagued the state the past four years, and unprecedented heat waves strained resources across the West in August and September. (See WECC Findings Show Complexity of Heat Wave Event.)

“When I saw what happened back in August, it was not something that had been entirely unanticipated,” Mainzer said. “We know that the resource base is changing dramatically. We know that the climate is changing. California clearly has significant co-dependencies with other regions of the West. And as the resource base has changed, we need to make sure that our planning and procurement and our operations adapt sufficiently rapidly to stay ahead of the reliability curve.

“California has placed itself on the absolute leading edge of energy policy in this country, if not the world,” he said. “In order to achieve the ambitious goals, we all recognize that we need to have a planning and procurement and an operational framework that is up to the task of those public policy goals.”

Roundtrip to California

Mainzer’s move from the Bonneville Power Administration in Portland, Ore., to CAISO headquarters in Folsom, Calif., in late September was a return home of sorts.

He grew up in San Francisco and attended the University of California, Berkeley, as an undergraduate, before traveling for school and work to India, New England, South Africa, Houston and the Pacific Northwest.

Mainzer said he first grew interested in energy, particularly sustainable energy, when he spent a semester abroad in India and saw the massive Sardar Sarovar Dam being built.

Graduate work in business and environmental studies at Yale University led him to South Africa, where he helped the government of President Nelson Mandela understand how the U.S. regulated its electric utilities, lessons South African leaders hoped to apply at home.

At Yale, Mainzer came across a company called Enron, which was buying wind and solar generation in the West. He went to work for the Enron, first in Houston and then in Portland, where he founded its renewables trading desk. He lost his job in late 2001, when the company collapsed after gaming California’s energy market.

Mainzer said he was not involved in Enron’s malfeasance, but the experience left a sour taste.

“I said, ‘That’s about enough private sector for me for a while,’ and I went across the river to BPA,” he said. “Eighteen years later, this opportunity at CAISO opened up. It’s been a great journey.”

Training Ground

Mainzer took over as BPA administrator in 2013. The energy market was changing. Electricity prices were falling fast with fracking and renewables entering the mix. At the same time, the cost of maintaining BPA’s aging infrastructure, including hydroelectric dams dating to the Great Depression, was growing.

BPA’s rates had been rising too, and buyers, particularly the public power entities that the administration supplied, were not happy.

“Our customers were saying to us, ‘Hey, if you guys don’t get your cost structure under control, and you don’t get your rates under control, we’re not sure we’re going to be there for that next round of long-term contracts,’” Mainzer said. “And so I put a tremendous amount of energy, with my staff and my leadership team and in partnership with customers, to really bend our cost curve to get our rates flattened out to a much more sustainable trajectory and to really maintain that role as the long-term provider of choice for those public power customers.”

Their goal was that BPA would “still be a good deal” in a competitive energy market, he said.

Employee safety was another top priority after a series of injuries and fatalities, Mainzer said. “We transformed the safety culture of BPA in deep ways.” In addition, BPA’s 15,000 circuit miles of transmission lines required upgrades for “efficiency and agility.”

The set of challenges was good training for the job at CAISO, he said.

“I’ve always tried in my career to prepare myself and position myself to work in organizations that are highly impactful and, if staffed correctly and oriented correctly, can have a really positive influence,” Mainzer said. “Bonneville was that for the Northwest, and down here in California, the ISO is such a pivotal organization.”

Moving Forward

When former CAISO CEO Steve Berberich reacted testily to the August blackouts, Mainzer said he understood his frustration. California has a complex system in which the CEC forecasts long-term demand, the CPUC orders year-ahead procurement and CAISO allocates the capacity it is given, with limited backstop procurement authority.

Mainzer said he is approaching his new job by listening to others and working closely with the state commissions, while also acknowledging the hard realities ahead.

“My focus has been on coming in and trying to build collaborative and effective working relationships with the leadership of the CPUC and the CEC, getting to know some of their key staff and offering the hand of partnership,” he said.

“For me, just coming in with fresh eyes — given my experience in the Northwest [with] multi-stakeholder challenges — I think it’s just clear California will not succeed and will not have an effective resource adequacy framework if the ISO and the CPUC and the CEC do not have that shared sense of tremendous urgency and focus and collaboration,” he said. “We have to work well together.

“You can’t have a world where you have two or three analytical frameworks for resource adequacy at different stages of the chain,” Mainzer said. “We need to be looking at issues through roughly the same analytical lens.”

Like leaders at the CPUC and CEC, Mainzer said he wants to see the state’s leading-edge resources thrive, including behind-the-meter solar generation, distributed energy resources, demand response and battery storage. But “for those resources to play important roles in the reliability solution, we have to be really objective and rational … about the different behavioral characteristics of those resources and what it takes to enable them to perform [optimally].”

The new CEO said he’s keenly interested in sharing resources across the West through CAISO’s Energy Imbalance Market, including its extended day-ahead market now under development, and perhaps eventually talking about a Western RTO. For now, however, Mainzer said he is focused on the state’s internal needs.

“Failure is not an option,” Mainzer said. “We have got to continue making progress and working effectively together.”