SAN DIEGO — Key backers of the West-Wide Governance Pathways Initiative told state energy officials Oct. 24 they’re confident California lawmakers next year will pass a bill needed to relax state oversight on CAISO’s markets and establish the “regional organization” (RO) envisioned by the initiative. 

“I think we’re feeling pretty optimistic, given the coalition that we have through the [Pathways] Launch Committee,” committee Co-Chair Kathleen Staks, executive director of Western Freedom, said during a panel discussion at the fall joint meeting of the Committee on Regional Electric Power Cooperation and Western Interconnection Regional Advisory Body (CREPC-WIRAB).   

That coalition includes labor, public power entities and environmental groups, Staks said, each of which opposed previous efforts to pass legislation to bring independent governance to CAISO. She noted that Pathways supporters in California have begun discussions with legislative staff who likely would contribute to crafting the bill, which would implement the group’s “Step 2” proposal. (See Pathways Initiative Releases ‘Step 2’ Proposal for Western ‘RO’.) 

Launch Committee member Jim Shetler, general manager of the Balancing Authority of Northern California, recounted a meeting supporters had three months ago with a senior legislative staffer.  

“He sat down and he looked across the table and said, ‘This is different. You guys are normally in opposition to each other on this issue. You’re together, pulling for the same thing.’ And I think that’s one of the key differences that we look at where we’re going,” Shetler said. 

Wyoming Commissioner Mary Throne asked Staks and Shetler whether Pathways has any “contingency planning” if the legislature either rejects the bill or “modifies it to such an extent that it doesn’t achieve the objectives that you’re seeking.” 

“We can create a new organization today, but for us to be able to get the take advantage of the market constructs that the CAISO currently operates and to use the CAISO markets and keep those going, we have to have this legislation that enables the CAISO to move those services over [to the RO], so it’s a critical part of the process,” Staks said. 

Shetler offered a blunter assessment. 

“I won’t sugarcoat it: The legislation is absolutely necessary for us to move forward,” he said. “We need that in order to make this happen. If it doesn’t pass or if legislation is created that makes the proposal non-workable, we will have to regroup.” 

“I think we’re feeling cautiously optimistic about our chances to get this done the way it needs to get done,” Staks said. 

‘Hope and Intent’

Arizona Corporation Commissioner and panel moderator Kevin Thompson asked whether the bill will be a rehash of a previous bill attempting to “regionalize” CAISO or be something different. 

Shetler said the bill’s language will depend on the content of a final Step 2 proposal, which he said is 99% complete. 

“We want to see that final proposal to make sure we understand what the legislation should look like. My anticipation is probably by very early next year, we will have language drafted,” he said. 

Shetler noted the California Assembly and Senate will begin their next sessions in January, with bills to be submitted in the early part of the year. After reviews by the policy and fiscal committees in the house of origin, the bill would move to floor of that house for a vote, then transferred to the other house for the “same routine.” 

Shetler said it’s the “hope and intent” of Pathways supporters that, by August or September of 2025, they will have a final bill that “can be voted on and that can be signed by the governor.” 

“My hope and sincere belief is about this time next year, we’ll have a piece of legislation that will allow us to move forward,” he said.