The federal government has put on hold nearly $1 million in funding toward the development of a new independent Western “regional organization” (RO) to oversee CAISO’s Western Energy Imbalance Market (WEIM) and Extended Day-Ahead Market (EDAM), the West-Wide Governance Pathways Initiative’s Launch Committee said Feb. 27.
The funding status is unknown because of a communication pause from the U.S. Department of Energy, according to a committee presentation.
“Given some of the cuts and uncertainty with the federal government, that funding is currently on hold,” Kathleen Staks, executive director of Western Freedom and the Launch Committee’s co-chair, said during the stakeholder meeting.
However, the Launch Committee does not expect the uncertainty of federal funding to slow down its work significantly. The current political environment has impacted some partners of the Pathways Initiative, “and we are sensitive to that. But directly for the work that we’re doing, we think we’re going to be able to continue to move forward,” Staks said.
Pathways received nearly $1 million from the DOE under former President Joe Biden’s administration in November to underwrite the committee’s efforts to establish an RO to oversee CAISO’s WEIM and EDAM.
The award was issued through the Pathways Initiative’s philanthropy adviser Global Impact, which the group’s Launch Committee partnered with earlier in 2024 to secure outside funding for its operations, which so far have been supported by donations — and volunteered staff — from its participants.
President Donald Trump’s administration on Jan. 27 paused all federal grants and loans, according to a memo issued by the White House’s Office and Management and Budget.
“With or without that DOE funding, the RO is going to need additional funding,” Staks noted.
Setting up an independent RO comes with several costs, including legal review of various documents, seating a board and ongoing facilitation costs, among other things, she said.
Staks said the committee hopes to have a draft budget to share with stakeholders by spring. She recognized that “all of our work thus far has been funded by a variety of stakeholders, and we are extremely grateful for that support and commitment.”
The Launch Committee’s success also hinges on the California bill to implement the Pathways “Step 2” plan to transform CAISO’s governance. Lawmakers introduced the bill in the state Legislature on Feb. 20. The proposed legislation sets conditions under which CAISO and California investor-owned utilities can participate in energy markets governed by an independent RO.
The Launch Committee is also working to finalize corporate documents, including registering as a nonprofit organization and refining the nominating committee process used to seat the RO board. The entire process to establish the RO will be marked by an extensive stakeholder process and negotiations between various parties, Staks noted.
The Pathways bill states that CAISO can join the RO-governed market on or after Jan. 1, 2027, which the Launch Committee believes “will not be too early,” according to Staks.
