Is California's Electric Grid an Island?

That's what a recent article on Vox states. The first sentence of the second paragraph boldly states "The state runs its own energy grid (several grids, actually), so it’s free to decarbonize electricity as it sees fit." Such would be news to the Western Interconnection (WECC), California Energy Commission (CEC), California PUC (CPUC), and the California Independent System Operator (CAISO). It would also be news to the Bonneville Power Administration (BPA) that owns a good share of three interties between the Pacific Northwest (PNW) and California (CA). Not to mention the interties between CA and states in the Southwest. A list of the 81 paths within WECC, with map, may be found here.

So, can CA "...decarbonize electricity as it sees fit"? In a word, no.

Certainly, the CA legislature, CPUC, CEC, CAISO may pass laws and/or establish protocols that affect the amount of carbon emissions from electricity generated and/or consumed within the boundaries of the state. However, wind plants have been built in the PNW to meet the renewable performance standards (RPS) in CA.

CA relies on other states across the West to site renewables that comply with CA RPS. As the amount of renewables sited outside of CA rise, there are impacts on these other power systems. For example, back in 2010, the Pacific Northwest Utilities Conference Committee (PNUCC) issued a report that examined how CA RPS-compliant renewables constructed in the PNW, in conjunction with renewables construction to meet RPS in the PNW, will impact the grid in that region. These are consequences that CA entities need not take into consideration as they set their renewables requirements. However, they arise because, contrary to the Vox piece, CA is anything but autonomous.

Among the consequences in the PNW of renewables built int that region to meet the CA requirements is an increasing need to curtail the operation of those renewables in order to bring output and loads back into balance. As you may recall, BPA curtailed wind projects in the Spring of 2010, 2011, and 2012. It did so again in April 2017. Even when renewables are installed within the CA's borders, there's less demand for the output of renewables and hydro situated in the PNW, which affects power operations in the PNW.

The Federal Energy Regulatory Commission (FERC) issued a ruling in October 2014 on how BPA may allocate the costs associated with curtailing wind to parties using federal transmission. While BPA's need to curtail renewables is dependent on more factors than what actions CA entities do with respect to carbon policy, it should be understood that this is yet another way that CA carbon policy impacts parties not located within CA. To get a flavor for how renewables affect BPA and the PNW power grid, see section 3.7 of a paper published this past March.

So, if CA power is integrated with other systems within WECC, was the author of the Vox piece referring to how prices are established? No. At the wholesale level, there are five "hubs" where wholesale prices are established, Mid-Columbia (Mid-C), California-Oregon Border (COB), Palo Verde, Four Corners, and Mead. Additionally, there is already a functioning energy imbalance market (EIM) with eight entities: Arizona Public Service, CAISO. Idaho Power, NV Energy, PacifiCorp, Portland General Electric, Powerex, and Puget Sound Energy. As a result, not only are wholesale power prices established at these five hubs, prices for EIM are also established more broadly than just within CA.

So, if CA carbon policy impacts entities across WECC, and wholesale power prices are also established in hubs that include, but are not limited to CA, and that's also true of EIM services, just what was the Vox piece about? Power system operation integration.

It's difficult to imagine that parties across the West will anytime soon actually take steps to establish an entity with the authority to operate the integrated grid that already exists across the West. In fact, the aforementioned EIM report states, "Utilities will maintain control over their assets and remain responsible for balancing requirements while sharing in the cost benefits the market produces for participants." Further, it's difficult for this analyst to imagine the circumstances under which the roughly 135 public utilities across the PNW that are part of what's called the Federal Columbia River Power System (FCRPS) would, along with the communities they serve, tell the PNW congressional delegation to allow some other entiity to control FCRPS resources.

Contrary to the title of the Vox piece, "California’s huge energy decision: link its grid to its neighbors, or stay autonomous?" it's at least equally true that everyone else across the West faces the question of whether or not they care to hitch their wagon to California's system operator, CAISO.