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Integrated Western Grid Could Bring Big Savings, Says Study

The expansion of the western electricity grid promises $3.4-9.1 billion in cost reductions the first 20 years, according to a study issued Tuesday by the California Independent System Operator (CAISO), which is considering integrating with Portland, OR-based PacifiCorp.

Commissioned by PacifiCorp, which is part of Berkshire Hathaway’s MidAmerican Energy Holdings Co., Energy and Environmental Economics (E3) examined the proposed integration of the two largest high-voltage transmission grids in the West to create a regional system.

Two years ago the Federal Energy Regulatory Commission approved creating a real-time energy imbalance market (EIM) between PacifiCorp and CAISO (see Daily GPIJuly 8, 2013).

At that time, CAISO CEO Steve Berberich emphasized that the expanded EIM would allow the state grid operator to use renewables and the West's fleet of natural gas-fired generation plants more efficiently.

From the perspective of political leaders in California, broadening CAISO into a regional entity could address climate change issues. A state climate change law (SB 350) signed last week by Gov. Jerry Brown authorizes CAISO to expand beyond its borders (see Daily GPIOct. 8).

A CAISO spokesperson said the E3 study projected that a regional grid operator may help reduce greenhouse gas (GHG) emissions through tighter coordinated planning, reduced curtailment of renewable energy and lower overall costs to build new renewable resources.

California Energy Commission Chairman Robert Weisenmiller said the grid operating integration would bring more "low-environmental impact renewable energy resources" into the western energy mix. It also would reduce GHG emissions and allow wider sharing of solar, wind and other renewables, he said.

Savings have been realized since last November, when PacifiCorp and CAISO started operating the EIM, the study concluded, but full integration "would provide a number of operating, investment and regulatory cost savings, incremental to those achieved by EIM."

The consultant’s study noted that PacifiCorp and CAISO customers would benefit from integration in different ways -- PacifiCorp would realize more operating cost savings in fuel/energy procurement, while CAISO customers would experience more investment savings. Integration would be a positive for California customers seeking to meet a 50% renewable standard by 2030.

In sum, the study said "the quantified benefits for both PacifiCorp and CAISO customers are sufficient to support continued progress toward the integration."

CAISO, PacifiCorp and E3 representatives are planning a joint stakeholder web-based conference call on Friday to discuss the study's results.

Meanwhile, indicative of the growth of renewables in the West, Pacific Gas and Electric Co. said Tuesday it has connected more than 70,000 solar customers to the grid to date this year, versus 45,000 total solar hookups during 2014.

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