The West-Wide Governance Pathways Initiative has potentially lost a key source of financial backing after the U.S. Department of Energy rejected the group’s application for $800,000 in grants to support its initial operations. 

“The Pathways Initiative did not receive DOE funding in the last round,” Western Freedom Executive Director Kathleen Staks, co-chair of the initiative’s Launch Committee, told RTO Insider in an email April 17. “We plan to share more information and potential next steps during our [April 19] stakeholder call and [will be] happy to answer additional questions at that point.” 

The group applied for the money in January in response to a DOE Funding Opportunity Announcement (FOA), seeking two tranches of $400,000 each to be disbursed over two years. The initiative was launched last July by energy officials from five Western states to develop the framework for an independent RTO that pointedly includes California and builds on CAISO’s Western Energy Imbalance Market (WEIM) and Extended Day-Ahead Market (EDAM). (See Regulators Propose New Independent Western RTO.) 

“This funding is necessary for major Pathways support functions — development of informational materials; outreach to key stakeholders; regular convenings through virtual and in-person gatherings; and facilitation to ensure meaningful participation by those who wish to engage,” the group said in a concept paper included in the grant application. (See Western RTO Group Seeking $800K in DOE Funding.) 

The funding would be “essential to performing outreach to states and groups not yet aware of, or able to participate in, the new nonprofit independent governance entity envisioned by” the initiative’s backers and make it more accessible to a larger set of stakeholders, the paper said. 

Speaking at the Launch Committee’s last monthly update March 15, Jim Shetler, co-chair of the committee’s Priority Administrative Work Group, expressed confidence that Pathways would win the DOE funding. (See Pathways Initiative Discloses Funders, Reiterates Goals.) 

Shetler, general manager of the Balancing Authority of Northern California, said the federal money would likely arrive in June or July, possibly leaving a funding gap in late spring that would likely be covered by the group’s original budget of $570,000 needed to fund Phase 1 of the effort through the end of April. 

It’s now unclear how Phase 2 will be funded. During the March update, Shetler said the initiative had raised about $430,000 from 24 stakeholder donors to cover the initial budget, with more pledges on the way. 

As of April 17, a “pledge summary” spreadsheet maintained by the group showed the list of donors had expanded to 32. It now includes the Interwest Energy Alliance, Western Resource Advocates, Primergy Solar, Solariant Capital, Pattern Energy, Brookfield Renewable Partners, Engie North America and one “individual contributor.” But the spreadsheet shows only pledge ranges, not donors’ specific contributions. 

The denial of federal funding comes just a week after the initiative released its straw proposal for tackling a “stepwise” transition of CAISO’s WEIM and EDAM to independent governance and could represent a setback for the EDAM in its competition for participants with SPP’s Markets+. (See Western RTO Group Floats Independence Plan for EDAM, WEIM.) 

SPP officials, meeting in Denver, declined to comment on the development. 

CAISO spokesperson Anne Gonzales said the ISO would defer comment to the Launch Committee. 

Tom Kleckner contributed to this article from Denver.