By Hudson Sangree

The formation of a Western energy market and who might control it were contentious topics of discussion at the fall joint meeting of the Committee on Regional Electric Power Cooperation (CREPC) and Western Interconnection Regional Advisory Body (WIRAB) near Phoenix last week.

Panelists also took on the topic of who will succeed Peak Reliability in the Western Interconnection as the company winds down its operations by the end of 2019. Both CAISO and SPP are vying for Peak’s reliability coordinator (RC) business, with CAISO poised to take on customers representing more than 70% of the region’s load. BC Hydro is also moving ahead with plans to set up an RC covering its own territory in British Columbia, Canada. (See CAISO RC Wins Most of the West.)

Peak CEO Marie Jordan said a major worry is that key employees will leave the organization before it hands off its responsibilities to its successors.

“As we’re going down this journey, and we’re closing the doors, slippage will be very hard to manage,” Jordan said.

In July, Peak made the stunning announcement that it would end its role as an RC and withdraw from an effort to develop a regional electricity market competing with CAISO. (See Peak Reliability to Wind Down Operations.) The Vancouver, Wash.-based company said it expected to shut its doors as early as Dec. 31, 2019, after transitioning its customers to other RCs. It was feedback from those customers commenting on Peak’s budget discussions that prompted the move to cease operations, Jordan has said.

In a panel Friday on RC services in the Western Interconnection, SPP and CAISO executives contended their organizations are best suited to provide RC in the West after Peak ends operations. Eric Schmitt, CAISO’s vice president of operations, said the ISO was already used to working with its western neighbors through its Energy Imbalance Market and other functions, while Bruce Rew, SPP vice president of operations, said the RTO had transitioned RC services before and could “make sure the lights stay on.”

The three-day meeting in Mesa, Ariz., addressed a dozen subjects including the reliance on natural gas for electricity generation in the West, cybersecurity for the grid, and customer-choice programs that are attracting large electricity loads away from investor-owned utilities.

On Thursday, wholesale market expansion in the West provoked a lively discussion among panelists, who debated the merits of CAISO leading a Western RTO — or whether an Eastern RTO such as PJM should tackle the job.

PJM has continued to express interest in developing an organized market in the Western Interconnection despite the downfall of Peak, its initial partner in the effort. (See Western Regionalization ‘No-brainer,’ PJM CEO Says.)

Petar Ristanovic, CAISO’s vice president of technology, said the ISO was most competent to form a Western RTO and questioned what “Eastern entities” could bring to the West at a time when California is trying to reach its goal of relying on 100% renewable and other zero-carbon energy sources by 2045. Eastern states, he said, are still trying to make the transition from coal to natural gas that California went through years ago.

Today, California is dealing with the “ongoing onslaught of intermittent renewables,” such as wind and solar, and looking to a future that includes the possibility of millions of electric vehicles charging at night. In addition to traditional morning and evening peak demand, “Who knows, we may get three peaks,” Ristanovic said.

Therese Hampton, executive director of the Pacific Northwest’s Public Generating Pool, an association of 10 consumer-owned electric utilities in Washington and Oregon, said CAISO had started as a single-state entity while other organized electric markets, including PJM, were formed as multistate organizations.

She said a Western RTO would need a governance structure that was independent of California’s political leaders, unlike CAISO, and large enough to include a diversity of interests and representatives from multiple states.

Her organization, she said, recently supported California’s AB 813. The bill, which failed to get a full floor vote in August, would have started the process of turning CAISO into a multistate entity by creating a governing board independent of the governor and legislature. (See Can Calif. Go All Green Without a Western RTO?)

Scott Miller, executive director of the Western Power Trading Forum, echoed her sentiments. Why, he asked, would Western states join a CAISO-led RTO if CAISO’s governance structure wasn’t altered, thus putting them “under the control of political elements in Sacramento”?

“You’d be foolish to do such a thing,” he said.