Energy experts debate bills that would change who manages the state’s power grid
on October 3, 2017
Environmental groups are opposing two assembly bills that are under review by California legislators, claiming the bills would promote the use of fossil fuels in the East Bay and limit consumers’ ability to choose their energy supplier.
Assembly Bill 726 and Assembly Bill 813 would authorize California’s main grid authority, the California Independent System Operator (CAISO), to transition from a government-appointed board to a fully independent board. An independent board would potentially regionalize California’s power governance such that representatives of out-of-state utilities and power plants could join the board.
Currently, the Western power grid connects 14 states, two Canadian provinces, and Northern Mexico, and is managed by 38 different bodies. CAISO oversees the operation of California’s bulk electric power system, transmission lines and electricity market generated by member utilities, such as Oakland-based Pacific Gas & Electric (PG&E). The five members of the board of governors, who each have a three-year tenure, review and approve the annual CAISO budget, shape policies and approve grid planning and market design changes, according to the agency’s website.
Proponents of the bills claim that the fragmented nature of the Western grid’s management is inefficient and a single independent body would be able to draw cleaner, cost-effective electricity across the region. They are pushing for CAISO to take the lead when it comes to managing the Western grid. Opponents, on the other hand, claim that out-of-state influence would promote the use of fossil fuels instead of renewable energy and would limit energy localization efforts.
“Regionalization is a problem because it’s an effort to sort of put California in a regional authority that has not shown a huge interest in renewable energy,” said Al Weinrub, coordinator for the Local Clean Energy Alliance (LCEA), an Oakland-based coalition of Bay Area environmental organizations. “For the perspective of folks who are pushing towards local renewable energy, in particular, it’s even more of a problem.”
Opponents of the bills have previously voiced concerns that a regional authority could result in people buying power from out-of-state utilities that derive most of their electricity from coal-fired plants, namely PacifiCorp, which provides electricity for parts of Utah, Oregon, Wyoming, Washington, Idaho and California.
Weinrub added that having a giant centralized body controlling where electricity comes from effectively stands in the way of creating communities that are able to control their own energy resources. “Our notion is to eliminate the transmission system to be able to create communities that are self-reliant,” said Weinrub.
Weinrub is a proponent of “Community Choice Energy” programs, which allow cities and counties to establish public, non-profit programs to decide where their electricity would come from. For example, they can either buy renewable energy from the market or develop renewable energy resources locally.
“It’s an economic development engine. It’s community resilience. It’s being not dependent on externally-generated electricity, which is subject to disappearance when all sorts of things happen,” said Weinrub
But Ralph Cavanagh, co-director of the energy program at Natural Resources Defense Council (NRDC), who said he was “heavily involved in the legislative process” of the bills, believes that having an independent board would not stand in the way of California’s pro-clean energy policy. He said that CAISO has to ensure that lowest-cost resources are the ones California turns to first, “and these are always renewables because they have the lowest running costs.”
For this reason, he believes that an independent board would result in lower power costs for consumers, less local air pollution, and a more reliable system with fewer blackouts. “Whatever state the board members come from, it doesn’t change the mission of the regional transmission operation, which is about running the power grid under rules that are established in federal law and in the laws of the states that the regional transmission organization serves,“ Cavanagh said.
He also argued that breaking up regional grids to create self-reliant communities would push up electricity costs, degrade reliability, and increase pollution emissions “by preventing communities from sharing resources and taking mutual advantage of low-cost renewable energy sited in remote locations.”
On September 13, the last day of the summer 2017 legislative session, clean energy activists assembled in front of State Senator Nancy Skinner’s office in Oakland, demanding that she votes down the bills.
Jessica Trovar, the coordinator for LCEA as well as member group East Bay Clean Power Alliance, said about 40 activists organized an emergency rally to protest the bills, which she said was added to the legislative session last-minute. She said that while Skinner was in Sacramento attending the session, they were able to speak to one of her staff members and voice their concerns.
“We all shared why we were there, mostly because of the fossil fuel issues with the local refineries, and addressing that we already have a lot of fossil fuel pollution in our communities. What we wanted to do is see more of this local clean energy, so we don’t have any more additional pollution than we already have,” Trovar said.
A representative from Skinner’s office said that the bills had never reached the Senate floor, so the senator never saw the final language of the bill, and added that Skinner is a staunch supporter of not relying on coal.
Assembly Member Christopher Holden (D-Pasadena), who authored the bills and represents the 41st Assembly District, had announced at the end of the session that the bills would be shelved and revisited in January. “It is important to recognize that these bills did not authorize regionalization of the grid. The bills established the next steps for the ISO [Independent System Operator] to follow,” Holden stated in the announcement.
According to Holden, the two bills are essentially the same. But AB 726 is further along. It made it through the assembly’s policy committee, then got pushed back to the rules committee. AB 813 has only made it to the rules committee. In order for a bill to reach the state Senate’s floor for a vote, it has to go through both.
In a phone interview, Holden said that it was “premature” to make any conclusions on the potential impact of the bills because legislators were under time constraints during the last session, so the legislative process has not ended.
Holden said that the initial purpose of the bills was to push utilities to speed up their purchases of renewable energy before temporary federal tax credits for wind and solar plants expire. According to the text of the bills, state estimates showed that buying 4,000 megawatts of renewable energy now, rather than in the year 2020, when tax credits would start decreasing, would save taxpayers $633 million.
“The simple things that we were trying to do with these two bills are accelerated procurement,” said Holden. “There are just too many big issues that got thrown on the back of a little wagon of accelerated procurement of 813 and 726. All of a sudden, the wheels started to wobble and I didn’t want to see either one of the ideas injured in that process. So we held off and we’re going to take it back up again next year.“
Holden said that it is not yet certain what regionalization of the board could entail. He said the board might just include members from a couple of neighboring states that have energy policy ideas similar to California’s, or it could be a bigger change.
But Holden said he did not think regionalizing the board would lead to a greater dependency on fossil fuels. “It’s certainly not the legislature’s intent to spend all this time and energy trying to get to 100 percent renewables to then put ourselves in a situation where we are getting power from outside interests that is coming from coal,” Holden said.
In fact, Cavanagh argued that an independent board would provide a bigger market for renewable energy producers in California to sell their energy, which he said is important because California is currently over-producing renewable energy. “The last thing you want is to be turning off renewable energy in California because there’s too much production to use locally,” said Cavanagh.
Weinrub argued that California could always store this energy for future use, although Cavanagh thinks that would be too expensive.
Weinrub, however, believes that decisions about energy should not be based solely on their costs but also on the benefits they provide to society.
“Regionalization poses a big threat because it takes all the emphasis and the resources and the focus of what we really need to do to survive on the planet,“ said Weinrub.
Holden acknowledged that the future of the bills remains uncertain. “There are a lot of unanswered questions around how all that stuff gets blended together so that there’s peace and harmony in the utility and energy world. Because right now there isn’t. There’s a lot of tension,” said Holden.
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