A struggle in the West over access to transmission lines in California during the blazing heat of summer has landed at the desks of federal regulators, with little time left to settle the debate.
The California Independent System Operator filed with the Federal Energy Regulatory Commission changes to its wheel-through policies, hoping for approval by the time summer heat starts to sizzle (see CEM No. 1638). CAISO, which was forced to perform rolling blackouts last August, fears that grid reliability will falter as "wheel-through" power—power traveling through the ISO's system—crowds out needed imports needed for resource adequacy when the system gets tight this summer.
"The proposed interim tariff revisions are necessary to avoid wheeling through self-schedules 'crowding out' both RA imports using the interties and RA capacity from northern California generation that must flow north-to-south on Path 26 to serve load elsewhere in California," CAISO said in a June 2 filing [ER21-1790]. The ISO was responding to protests to the proposal filed by utilities and power sellers in the Desert Southwest and Pacific Northwest.
Arizona utilities and regulators in the state need to be able to access Northwest hydropower, and say that they have already set up supply arrangements for this summer based on the current rules. Arizona utilities and power sellers say CAISO’s proposal gives preference to native load and is discriminatory, while the ISO and others supporting the proposal say it would put native load on an even footing with wheel-throughs. Some warn that the proposal could cause reliability problems in areas outside of California that could reverberate across the West.
The ISO has already launched a stakeholder process to work on a permanent solution—called the External Load Forward Scheduling Rights Process—and proposed an automatic sunset date for the rules for which it seeks approval.
CAISO is unique among ISOs and regional transmission organizations in that other than a few historic exceptions, it does not have a system for advance transmission reservations. Thus, there is nothing that protects its native load when the system is constrained. And wheel-throughs are expected to increase this summer. Another factor that could affect transmission lines this summer is wildfires.
The grid operator proposes that entities scheduling wheel-through power be required to attest they have a firm power-supply contract to serve external load for the entire calendar month, and that they have obtained monthly firm transmission service from the power source to the CAISO border. These would be considered priority wheel-throughs and given equal access to the transmission system with CAISO's native load.
The list of entities that have filed protests to CAISO's proposal is rather lengthy. It includes the Arizona Corporation Commission and most major and smaller utilities in that state; Bonneville Power Administration; Powerex; the Large Public Power Council; Southwest Public Power Agency; Vistra; Public Service Company of New Mexico; Idaho Power; and Portland General Electric. But the protests can involve different issues. For example, the Six Cities group of California cities (Anaheim, Azusa, Banning, Colton, Pasadena and Riverside) mounted a vigorous defense of CAISO's proposal, saying it conforms with FERC's open-access rules, but filed a limited protest against the ISO's request that the changes have an automatic sunset date.
BPA owns 15,000 miles of transmission lines in the Pacific Northwest and operates the northern portion of the Pacific Northwest-Pacific Southwest Intertie, consisting of AC and DC lines that connect the Northwest with the Southwest and the CAISO balancing authority area.
"Bonneville strongly opposes this set of changes," BPA said in its filing to FERC. "The changes are not driven nor made necessary by the heat wave events of summer 2020. The changes are instead being driven by CAISO's speculation that high regional prices will exceed its energy bid caps, increasing demand for wheel-throughs, and potentially impacting the ability of load serving entities in its balancing authority area to import energy at or below its energy bid cap."
Many of the parties filing protests include participants in CAISO's Western Energy Imbalance Market, which raises the question of whether that relationship could be affected by the conflict. Idaho Power, which has 17 hydroelectric facilities, serves 580,000 retail customers and participates in CAISO's real-time market, filed a joint protest with fellow EIM participant Portland General Electric against CAISO's changes.
In a separate FERC docket, NV Energy subsidiaries Nevada Power and Sierra Pacific Power filed a protest against CAISO's proposal [ER21-1816]. The California Public Utilities Commission defended CAISO in that docket, saying, "NV Energy proposes the novel idea that those with firm transmission to the California border must be given priority on CAISO's transmission system not equal to, but above native load."
The Large Public Power Council includes 27 of the largest state- and municipally owned utilities in the nation, including the Los Angeles Department of Water & Power and others in Colorado, the Pacific Northwest and the Desert Southwest. LPPC told the federal agency that the Southwest and the Northwest rely on CAISO transmission service to meet summer and winter loads in those regions.
"The remedial measures settled upon by the ISO were expressly designed to hinder the use of transmission on the CAISO system by LSEs outside California willing to bid higher prices for energy," the LPPC said.
The battle over transmission in the West has created a somewhat dicey and high-stakes situation, with some obvious nervousness in California and other parts of the West about adequate power supplies this summer.