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WORLD-GENERATION NOVEMBER/DECEMBER 2016

20

or impair state authority.

Comments from stakeholders are

extensive and are collected in the CEC’s

website,

http://www.energy.ca.gov/sb350/

regional_grid/documents/index.html. In

general, commenters support preserving

state authority through its governance

structure. Mandatory forward capacity

markets were not supported but

stakeholders supported a voluntary capacity

market. Transmission owners would be

allowed to withdraw from the regional grid

operator if they were dissatisfied with it.

The governance plan will become effective

only after it is approved by the governor of

California.

EXPERTS COMMENT ON A

REGIONAL MARKET

At the 8th Annual Climate & Energy

Law Symposium on November 4 in San

Diego, the potential impact of a regional

ISO on the future landscape of California’s

and the west’s electricity production and

movement sparked the following comments

from speakers.

Travis Kavulla, a commissioner of

Montana’s Public Service Commission and

president and chairman of the National

Association of Regulatory Utility

Commissioners, commented on the risks of

curtailing renewables or paying them to not

dispatch when the power is not needed.

Expanding to a regional market avoids this

issue. “It’s a software solution to optimize

billions and billions of dollars invested and

paid for by customers in infrastructure.”

Travis also said that a regional ISO

should bypass supporting public policy and

stick to operating the electricity markets.

States should have protections to decide on

infrastructure capital resource planning, he

argued.

DeAnn Hapner, vice president for FERC

and ISO Relations at Pacific Gas and

Electric, commented that with a regional

grid, “There are costs that will likely impact

customers.” She agreed that integrating

municipal utilities, which have separate

local governances from investor-owned

utilities, into a regional ISO must come into

play.

Kavulla added that the corporate

leadership of publicly owned utilities is

more sensitive to and report to local

markets, whereas investor-owned utilities

build in costs that support state policies

such as subsidizing low-income ratepayers,

energy efficiency programs and energy

research.

Tim Duane, a visiting professor in

Environmental Law at the University of San

Diego School of Law which sponsored the

symposium, made the point that if you have

a more diverse spread of renewables in a

few transmission operators, the need for

resource adequacy will be diminished to

zero and there will be less need for new

resources.

John Anders, lead counsel at the

CAISO, discussed the implications of

moving to a western regional market. He

said the risks of not establishing such a

market mean the costs of operating the

current market may become unreasonable.

He predicted a regional ISO would create

$1 billion to $1.5 billion in economic

benefits and an 8% to 10% reduction of

greenhouse gases in California.

SCE REDEFINES ITS POWER GRID

In September, SCE released a short

report, “The Emerging Clean Energy

Economy” in which it describes how it

plans to modernize and reinforce its

distribution grid. It reports that in 2015,

utility operators performed over 22,000

switching procedures to reconfigure or

isolate portions of distribution circuits. As

more and more customers install

distributed energy resources (DERs) these

operations will become more challenging.

As we have become aware, one-way

power flows from a few large generators

connected at transmission voltage is giving

way to two-way variable flows created by

many small DERs connected to the

distribution system or behind customer

meters. Clusters or concentrations of

distributed resources could quickly

complicate grid operations. Safety and

reliability issues will increase in both

frequency and magnitude unless a modern

grid is created with enhanced capabilities.

SCE sees Distribution System

Operators planning and managing the

modernized plug-and-play grid with

advanced sensors, communications and

automation embedded in the distribution

grid.

DERs will be able to connect to

wholesale markets to sell services under

this new grid and receive compensation for

providing location-specific services. It

could also open up third party markets

where the distribution platform could

enable markets for energy transactions

between customers or marketplaces for new

products and services.

Of course, this comes with a price.

SCE writes that “rate designs and programs

must transition to share the benefits and

costs among customers who deploy DERs

to meet a portion of their energy needs and

those who do not. Rates should account for

the fixed costs of the grid so all customers,

including DER owners, pay for access to the

modernized and reliable grid.”

The new proposed rates, which were

not discussed in this report, will likely lead

to lengthy hearings and debates.

The report is available at www.edison.

com/TransformingtheGrid.

SCE CREATES PILOT

To prepare for this transition, SCE has

been planning a preferred resources pilot

for several years in Orange County which if

successful will be a model for the clean

energy grid of the future throughout its

service territory. The Orange County

multi-year pilot will measure the impact on

the grid of clean energy options – energy

conservation, solar and wind generation

and energy storage. The goal of the pilot is

to determine the correct mix and proper

timing for adding these resources to meet

local customer demand. The area was

chosen for the pilot because of its proximity

to the shuttered San Onofre Nuclear

Generating Station and the presumed needs

of the communities impacted by the

closure.

REDEFINING CALIFORNIA’S

POWER GRID

CONTINUED FROM PAGE 15

CALIFORNIA NEWS