A meeting to hash out an upcoming Oregon study on RTO membership took some philosophical twists Monday as discussion turned to how the state’s participation might fit into other developments in the West and whether incrementalism might be the best approach to unifying the region’s grid operations.

In kicking off the first meeting of the state’s RTO Advisory Committee, Adam Schultz, electricity and markets policy lead at the Oregon Department of Energy (ODOE), clarified that the study that Senate Bill 589 requires from the department by year-end is not expected to provide recommendations on whether the state should compel utilities to join an RTO. (See Oregon Study to Examine Benefits, Risks of RTO Participation.)

The objective, according to Schultz, is “to gather and synthesize the range of perspectives on the benefits, costs, opportunities, challenges and risks of RTO formation that exists among a diverse range of Oregon stakeholders to inform the state legislature and other interested parties.”

The Advisory Committee includes representatives from the state’s three investor-owned utilities (Portland General Electric, PacifiCorp and Idaho Power), consumer-owned utilities, independent power producers, the legislature, the governor’s office, organized labor, and environmental and social justice groups.

During Monday’s meeting, committee members from the electricity sector appeared to lean in support of RTO membership, a view that even extended to consumer-owned power providers.

“There’s a lot of talk about RTOs and organized markets across the region. We’re participating in many of those and are excited about the opportunities that it can create,” said Frank Lawson, general manager of the Eugene Water and Electric Board. “I would say that we’re generally favorable of the idea, and we also know that the details matter.”

Robert Echenrode, CEO of Umatilla Electric Cooperative in Eastern Oregon, said his utility’s interest in an RTO stems from its “rather significant load” and the potential for renewable energy growth in the region.

“We’re very interested in both sides of the RTO equation. We anticipate a net benefit,” Echenrode said.

“I’d say our view is that we favor market development, but markets done right,” said Fred Heutte, NW Energy Coalition (NWEC) senior policy associate. “Of course, there’s a lot of different issues and perspectives underneath that cliche.”

Ben Kujala, director of power planning at the Northwest Power and Conservation Council, pointed to the “transformative” energy policies taking shape in the West — particularly in California — that “are really going to change the way” the system and markets work. He wondered how Oregon can best position itself to mitigate any risks that might arise from those changes.

“I think one of the things you always have to keep in mind in any report looking at something like this is … is [the development of an RTO] an incremental change to the current state — or would the current state be better going forward?” Kujala said.

Mike Goetz, general counsel for the Oregon Citizens’ Utility Board, said the study should examine other efforts already underway in the West to inform the possible shape of an RTO. He pointed specifically to the Northwest Power Pool’s (NWPP) Western Resource Adequacy Program effort and CAISO’s proposed extension of its day-ahead market into the Western Energy Imbalance Market (WEIM). (See RA Program will Require Restructuring of NWPP.)

“I know there’s folks out there that kind of see a resource adequacy program and extended day-ahead market as steppingstones towards potentially getting into a more regionalized approach that leverages geographic and resource diversity,” Goetz said. “Maybe taking a step back and looking at what those programs can offer … could set our region up best to form an RTO that really gets the most bang for his buck.”

All-in vs. Incrementalism

An RTO shouldn’t be expected to solve every problem in the region, according to Sarah Edmonds, director of transmission services at Portland General Electric.

“There are some things that make sense to embed in the market, particularly those items that respond best to the economic signals of supply and demand, but there are some more difficult things that have made sense in other places to do out of market,” Edmonds said.

“Whether it’s an RTO or something less than,” she continued, a market solution could potentially complement “foundational RA requirements.” RA information could be then fed into an RTO’s optimization process to provide economic solutions in the day-ahead and real-time time frames.

“So I see it more as not the provider of RA, necessarily, but as maybe a more efficient engine that RA can be connected to,” she said.

Ravi Aggarwal, a manager with the Bonneville Power Administration, said that while multiple studies look at the benefit of a West-wide RTO, none has examined the potential for a market consisting of only Northwest entities.

“I think we need to think about a more staged and incremental approach, if you think that the chances of success are perhaps higher,” Aggrawal said.

Aggarwal said the Northwest’s “three-legged stool” of regional planning, RA and markets is already being served by Northern Grid, NWPP and the WEIM, respectively.

“I think that incremental approach makes you learn from your mistakes and refine it before you go on,” he said. “So all I’m advising is that as you guys are providing input to the legislators, think about ‘all-in’ versus an incremental approach, and look at the pros and cons of it, and see the benefits in doing one versus the other.”

Spencer Gray, executive director of the Northwest & Intermountain Power Producers Coalition, said his members would likely disagree with Aggarwal’s view on strength of the Northwest’s planning platform, contending that it does not go “beyond the plans” of incumbent utilities.

“You might find a diversity of views on what incrementalism means — what is satisfactory incrementalism versus a re-entrenchment of the status quo,” Gray said.

NWEC’s Heutte cautioned that an incremental approach to regionalization might not move quickly enough for Oregon to achieve its decarbonization goals. Under the current structure, the state doesn’t benefit from the “full range of diversity” of Western energy resources, he said. Furthermore, it’s becoming increasingly complicated for grid operators to manage the “expanding list” of storage resources that are becoming more diverse in scale, location, type and performance.

“And to me, that’s the advantage of moving forward to full market. That full market would be able to take the greatest advantage of the resource diversity to decarbonize the system, and to make it more reliable,” Heutte said.