By Robert Mullin
GridLiance moved one step closer to joining CAISO as a participating transmission owner after the ISO’s Board of Governors voted Dec. 15 to approve the company’s membership.
The company is seeking to join the ISO after agreeing to purchase Valley Electric Association’s 230-kV transmission network for more than $200 million. (See Valley Electric Approves Sale of 230-kV Network to GridLiance.)
Nevada-based Valley Electric is the ISO’s only transmission-owning member outside California. The cooperative provides power to about 45,000 customers in a 6,800-square-mile service territory along the California-Nevada border.
The transmission assets being transferred include 164 miles of 230-kV lines linking Valley Electric’s base in Pahrump, Nev., with both Las Vegas and the Mead substation — a major delivery point for power wheeled into California. Valley Electric completed the network in 2013 in order to improve reliability for its sprawling but sparsely populated service area.
As part of the deal, GridLiance has said it will reinforce the ISO’s interconnection with Nevada’s Eldorado substation, another major wheeling point into California.
Valley Electric saw the value of its network increase significantly after the co-op joined the ISO in 2013. It will recover about 2.4 times its investment.
Chicago-based GridLiance acknowledged that it is paying top dollar for the assets, saying they will provide the company with a foothold in an area that bridges the California market with the interior West.
“We did pay a premium to enter this relationship,” GridLiance CEO Ed Rahill told the CAISO board ahead of its vote. “And if you think about that, it’s only because our commitment is so many decades into the future that it becomes insignificant.”
Under the agreement, Valley Electric will still operate and maintain the system. The acquisition is not expected to affect the co-op’s distribution system.
“Our relationship with Valley is going to continue as a long-term partnership to help the region and the community through economic development and energy projects that benefit not just Valley but the California ISO and California,” Rahill said.
Valley Electric CEO Thomas Husted said the co-op joined the ISO because it is a “strong proponent” of regionalization.
“The sale of those assets does not change that position,” Husted said. “We will continue to be a load-serving entity and a [participating transmission owner] within the California ISO.”
Husted said the network was built to serve Valley Electric’s load, provide reliability and foster development of renewable assets that will continue to support regionalization.
“That [regionalization] now is growing beyond Valley Electric’s original mission and beyond our charter,” Husted said.
The board’s approval is conditioned on GridLiance executing a transmission control agreement with the ISO and FERC accepting the company’s transmission owner tariff and revenue requirement.
GridLiance would be the 17th transmission owner to join the ISO.
Launched in March 2015 with backing from the Blackstone Group, GridLiance bills itself as the nation’s first competitive transmission company focused on collaborating with public power entities. It made its first two acquisitions — 420 miles of 69-kV and 115-kV lines in Missouri and Oklahoma — a year ago. (See GridLiance Makes First Acquisitions.)
