CAISO intends in 2022 to focus on long-term transmission planning, connecting storage to its grid and extending the real-time Western Energy Imbalance Market (WEIM) to a day-ahead market amid a push for greater Western regionalization.

“We’re going to turn the corner into ’22, and it is going to be a big year,” CEO Elliot Mainzer told the Board of Governors at its year-end meeting Dec. 17. “We are ready to go on the enhanced day-ahead market and all our other initiatives.”

CAISO must also keep competing with SPP, which is pushing West with its RTO and Western Energy Imbalance Service, and managing the Northwest Power Pool’s Western Resource Adequacy Program.

SPP’s recently unveiled Markets+ program could challenge CAISO’s proposed extended day-ahead market (EDAM).

“It’s a conceptual bundle of services proposed by SPP that would centralize day-ahead and real-time unit commitment and dispatch, provide hurdle-free transmission service across its footprint and pave the way for the reliable integration of a rapidly growing fleet of renewable generation,” the RTO says on its website.

“For utilities that see value in these services but who aren’t ready to pursue full membership in a regional transmission organization at this time, Markets+ provides a voluntary, incremental opportunity to realize significant benefits.”

SPP has scheduled a series of stakeholder meetings to discuss the new offering in Denver, Phoenix and Portland, Ore., during the first half of 2022.

WEIM and EDAM

CAISO is hoping the EDAM will give it an advantage and is wasting no time getting started this year.

Three newly established EDAM working groups will meet Monday and continue through Thursday to discuss resource sufficiency, transmission commitment, greenhouse gas accounting and other topics. CAISO’s goal is to complete EDAM market design by the end of 2022, implement and test it in 2023 and go live in early 2024.

“Amidst a dynamic and competitive environment for market services, we are fully committed to positioning EDAM as the next major step in West-wide market integration,” Mainzer said in his December report to the board.

CAISO revived the EDAM effort last year after putting it on hold following the energy emergencies of summer 2020. An online forum to relaunch EDAM in October drew 600 attendees. (See CAISO Promotes EDAM Effort in Forum.)

The level of interest was a sign of the growing demand for Western regionalization, Mainzer said at the time.

“I have never seen or felt a greater sense of interest and urgency on this topic,” he said.

Last year, FERC Chairman Richard Glick called for the establishment of one or more Western RTOs, and Nevada and Colorado passed laws ordering their transmission-owning utilities to join an RTO by 2030. (See Glick Says West Should ‘Finish the Job’ on RTO and FERC Commissioners Opine on Western RTO.)

A coalition of Western utilities formed the Western Markets Exploratory Group last summer to examine working together on transmission expansion, day-ahead energy sales and other market services, while leaving open the possibility of forming or joining a Western RTO. (See Western Utilities to Explore Market Options.)

EDAM seeks to build on the WEIM’s record of financial success and steady expansion. The WEIM has produced more than $1.7 billion in benefits for its participants since 2014. By 2023 it expects to have 22 members representing 84% of load in the Western Interconnection.

Establishing trust between California-run CAISO and the rest of the West remains a work in progress.

Toward that end, the CAISO board approved a power-sharing plan with the WEIM Governing Body in August. A joint meeting of the two bodies Dec. 16 was the first held under the new rules. (See CAISO Agrees to Share More Power with EIM.)

CAISO is also working on issues that have bothered some WEIM participants, including its resource sufficiency test and temporary wheel-through rules. (See CAISO Reevaluating WEIM Resource Sufficiency Test and FERC OKs CAISO Wheel-through Restrictions.)

“This past year raised difficult issues with respect to resource sufficiency and the prioritization of service to loads, exports and wheel-throughs,” Mainzer said in his report. “Both these issues are vitally important to our partners throughout the West and key to the trust that is the foundation of regional markets.”

The board and Governing Body are expected to vote on a revised resource sufficiency evaluation proposal in February. CAISO plans to address wheel-throughs in a separate stakeholder initiative.

Transmission Planning

Another major CAISO effort this year involves new, long-term transmission planning to meet the state’s goal of serving retail customers with 100% clean energy by 2045, as required by Senate Bill 100, signed by Gov. Jerry Brown in 2018.

The ISO intends to develop an extended 20-year transmission outlook working with the California Public Utilities Commission (CPUC), which prepares statewide integrated resource plans, and the California Energy Commission (CEC), which produces long-term energy demand forecasts.

The CPUC’s IRP envisions connecting 18 to 22 GW of new renewable generation and importing 1 to 3 GW of out-of-state wind power to meet the state’s interim 2031 energy goals.

“These procurement portfolios require significant in-state and out-of-state transmission investments,” the CPUC’s Public Advocate’s Office said in written comments responding to a July 27 stakeholder call.

CAISO plans to release the first findings of its new 20-year transmission outlook in early 2022, Mainzer told the board in December.

The 20-year effort is meant to run in parallel with CAISO’s normal 10-year transmission planning process. It will consider the CEC’s long-term demand forecasts, including the impacts of increased electrification in the transportation and building sectors. Connecting resources still in development — such as offshore wind, energy storage and utility-scale solar — also is part of the agenda. (See CAISO Launches 20-year Transmission Planning Process.)

One big difference is that CAISO’s 10-year process looks at in-state needs, but clean energy goals may require more interregional planning and collaboration, which the longer-term process will address, Jeff Billinton, director of transmission infrastructure planning, said at a kickoff meeting in May. He cited the TransWest Express Transmission Project, intended to bring Wyoming wind to California, as one example.

“This planning process is using SB 100 resource portfolios and other inputs to characterize the longer-term architecture of the ISO high-voltage transmission system. It will evaluate onshore, offshore and interregional transmission solutions,” Mainzer said in his report. “The 20-year outlook is designed to provide an overarching transmission planning roadmap to guide interconnection queuing, resource planning, network upgrades and resource procurement in the years ahead.

“At the same time, the ISO has been conducting a stakeholder process to explore foundational reforms to transmission queuing procedures given that we now have over 250 GW of requests for service in our transmission queue, which is an unsustainable situation for all concerned,” he said.

RA and Batteries

CAISO, the CPUC and CEC face another year of dealing with resource adequacy problems following the energy emergencies of summer 2020 and a close scrape on July 9 when major transmission pathways between the Pacific Northwest and California were derated because of a massive wildfire. (See CAISO Declares Emergency as Fire Derates Major Tx Lines.)

The addition to the grid of approximately 2,250 MW of batteries since summer 2020 should help meet summer evening peaks, the time when CAISO’s grid has been most strained. California’s dependence on solar power and imports made the state vulnerable to Western heat waves that drive air-conditioning demand after sunset.

CAISO previously estimated the state will need at least 12 GW of battery storage to meet its clean-energy goals.

In December, the CPUC adopted measures aimed at securing up to 3 GW of additional capacity through supply- and demand-side programs to prevent shortages in extreme heat waves in the summers of 2022 and 2023.

The measures included ordering the state’s three big investor-owned utilities — Pacific Gas and Electric, Southern California Edison and San Diego Gas & Electric — to accelerate procurement of battery storage. The commission projected shortfalls of 2 to 3 GW this summer but noted that PG&E, SCE and SDG&E have already procured 1 GW in response to earlier commission decisions.

Since late 2019, the CPUC has directed the state’s IOUs to collectively procure more than 17 GW of additional capacity, including a June order for 11.5 GW of new resources to come online between 2023 and 2026.

Acting on a July emergency proclamation by Gov. Gavin Newsom, the CEC approved a plan in September under which batteries capable of providing at least two hours of discharge by the end of October 2022 can be licensed and connected to the grid in far less time than it would normally take.

The proclamation ordered CAISO, the CPUC and CEC to “work with the state’s load-serving entities on accelerating plans for the construction, procurement and rapid deployment of new clean energy and storage projects to mitigate the risk of capacity shortages and increase the availability of carbon-free energy at all times of day.”

It cited severe drought as an exacerbating circumstance. Two extremely dry winters in the past two years in California dried up major reservoirs so that hydropower plants had to reduce or cease production. The power plant at Lake Oroville, one of the state’s largest reservoirs and hydroelectric generators, shut down in August because of falling lake levels.

Winter storms in December generated snowpack in the Sierra Nevada that was about 160% of average for the month, but more is needed during the rest of the winter to alleviate drought conditions. Sierra snowpack supplies water for residential and agricultural use throughout the state’s dry summer months.

WECC’s Western Assessment of Resource Adequacy warned of impending shortages through 2025, including as a result of drought. (See WECC Warns West Heading for Resource Shortfalls by 2025.)

Greater dependence on variable resources such as wind and solar could mean none of WECC’s five subregions will “be able to eliminate the hours at risk for loss of load even if they build all planned resource additions and import power,” the regional entity warned.

WECC examined RA under several scenarios including a “drought case” in which the Glen Canyon and Hoover dams on the Colorado River ceased hydroelectric production because of low water levels.

In August, the U.S. Bureau of Reclamation for the first time declared a water shortage for Lake Mead, behind Hoover Dam, in response to a historic drought impacting the entire Colorado River Basin. (See Feds Invoke First-ever Colorado River Water Restrictions.)

WECC said “entities may have many more options to address resource adequacy issues in the five- to 10-year time frame than in the near term” but urged quick action.

“If the current long-term issues are not addressed immediately, they may be insurmountable when they become near-term issues,” WECC said.