California state lawmakers on Feb. 20 introduced a much-anticipated bill to implement “Step 2” of the West-Wide Governance Pathways Initiative, marking a significant step toward the creation of a new independent “regional organization” (RO) to oversee governance of CAISO’s Western Energy Imbalance Market and Extended Day-Ahead Market.
California Democratic Sens. Henry Stern and Josh Becker introduced SB 540, also known as the Pathways Initiative, saying in a news release that the bill “establishes an innovative framework for regional energy cooperation while preserving California’s authority over key aspects of its electricity system and climate goals.”
The bill language will become public Feb. 21.
“As we move toward achieving California’s 100% clean energy goals, we must look at all possible solutions to reduce costs, improve reliability and cut emissions,” Becker said in the news release. “Pathways strikes that balance by unlocking the benefits of a regional energy market while safeguarding California’s critical public policy priorities. It offers a win-win scenario for California — achieving cleaner energy, more reliable power and real savings for ratepayers.”
The Pathways bill would allow CAISO and California utilities to enter energy markets governed by a new RO if the RO meets certain criteria. CAISO would maintain its role as a California-governed balancing authority “so that California and CAISO retain control over procurement, environmental, reliability and other public policies,” according to a fact sheet.
The bill aims to expand CAISO’s Western energy markets and allow stakeholders to tap into a wider market of electricity resources while ensuring California does not have influence over participating states’ public policies. It strives to solve governance issues that have hampered similar market initiatives in the past.
“SB 540 will ensure that we reach our climate goals in the most cost effective and reliable manner possible by tapping into a much wider set of Western resources — lowering energy bills, improving grid reliability and reducing pollution in front-line communities, while also retaining control of our procurement, environmental, reliability and other public policies,” the fact sheet stated.
The Pathways news release included comments from several backers of the bill who expressed their support.
“Enhanced coordination among Western states will bring benefits to Californians and increase the amount of clean, affordable electricity for the region,” Victoria Rome, California government affairs director at the Natural Resources Defense Council, said. “SB 540 takes the next important step toward a more resilient and reliable clean energy future for all westerners.”
Leah Rubin Shen, managing director for the West at Advanced Energy United, said in a separate statement that the bill “lays out a forward-thinking strategy for regional energy collaboration that will help contain costs for California ratepayers while keeping the lights on. The Pathways Launch Committee has worked hard to ensure that all stakeholders have a seat at the table, state interests are preserved, and the reliability and cost-saving benefits of sharing resources across the West can be fully leveraged.”
