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Rocky Mountain Power wants to sign Utah on to a multistate power grid that some fear could make California king

First Published      Last Updated May 10 2016 11:05 pm

Regional grid » Proponents say the deal would save customers millions of dollars; Herbert and other leaders worry about fees, ceding local control to California.

Rocky Mountain Power believes it has finally found a way to get Utah customers the cheap renewable energy they've been asking for, but local leaders are concerned that the deal would give California authority over Utah and 10 other Western states.

The utility is exploring the creation of a regional grid management system that would redistribute electricity in 11 Western U.S. states, a deal that Rocky Mountain Power says would lower customers' costs and give them greater access to renewable energy.

Local critics, including Utah Gov. Gary Herbert, are skeptical. They argue that, barring radical change, the agreement would benefit California at the expense of Utah independence.

The grid's presumptive manager — the California Independent System Operator (CAISO), an independent nonprofit that oversees electrical transmission in California — is led by a board of governors appointed by California's governor and Legislature.

"While it is clear that California's energy agencies and the CAISO are ambitiously pursuing a path for PacifiCorp's participation in a new regional transmission organization, it is not clear whether such a development would be in Utah's best interest," Herbert wrote in a March 2 letter to California Gov. Jerry Brown.

A 2015 study commissioned by CAISO and PacifiCorp — which operates as Rocky Mountain Power in Utah, Wyoming and Idaho and as Pacific Power in Oregon, Washington and California — says that a regional grid would save PacifiCorp customers as much as $272 million by 2030.

But there are costs that aren't being considered, said Michele Beck, director of the Utah Office of Consumer Services.

"The study made it sound like we would be stupid not to go out and get those benefits," she said. "Well, no, it's not. It's not smart to talk about benefits when we aren't sure of the costs."

California is solar power country, so much so that some afternoons, the state's solar arrays generate more electricity than residents use. But those same arrays don't generate enough power later in the day, when demand peaks, forcing the state to continue to rely on nonrenewable resources.

In late 2014, PacifiCorp and CAISO entered into an agreement, called the Joint Energy Imbalance Market, to address this situation. Partners in the market — currently CAISO, all of PacifiCorp and Nevada's NV Energy — can buy and sell power across their systems in real time. When California has a surplus of solar power, it might sell it on the cheap to Utah, which has peak demand at about the same time solar power production surges on the coast.

In its first eight months of operation, the energy market generated an estimated $21 million in savings for PacifiCorp customers, according to a 2015 study commissioned by PacifiCorp and CAISO.

Encouraged by those results, power companies in Washington and Arizona have pledged to join the energy market this year. Portland General Electric intends to sign on by October 2017, and Idaho Power has committed to join in October 2018, according to Oscar Hidalgo, CAISO's director of communications.

And PacifiCorp and CAISO believe there is even greater potential for cost savings in full grid integration, which would allow participating utilities to plan for peaks in supply and demand by concentrating transmission oversight in a single entity — most likely CAISO, because it's the only entity in the West set up to assume such a position, Hidalgo said.

According to the 2015 study, PacifiCorp customers stand to save a combined $200 million to $272 million by the year 2030 on a regional grid system. Customers of CAISO stand to save between $203 million and $894 million in the same period.

A Westwide grid would also allow California to trade its solar power for electricity from turbines in Wyoming and hydropower from Oregon and Washington. Under recent state legislation, California is required to obtain at least 50 percent of its energy from renewable resources by the year 2030 — a goal the state isn't sure it can meet on its own.

"We think that for us, [regional grid integration] is the most appropriate way to reach our renewable mandate," Hidalgo said. "It would be very challenging to meet 50 percent without a regional grid."

The bill that called for more renewable energy also directed CAISO to get a formal proposal for a regional grid to lawmakers by the end of 2017 so the grid integration process can begin in 2018.

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