California’s experimental nonprofit electric transmission gridand wholesale spot power market operations – the Independent SystemOperator (ISO) and Power Exchange (PX), respectively – are clearlyworking toward becoming larger, multi-state regional operations,according to officials who marked the one-year anniversaries ofboth organizations March 31. A proposed new California law (SB 96)would make it easier for the state to enter compacts with otherwestern states to begin to form the regional power operations.

“We are emphasizing getting more participants to join the ISObecause now that we have the infrastructure in place, every newparticipant we can bring on board helps to reduce the gridmanagement charge for everyone,” said Terry Winter, ISO CEO.

The PX has increased to 59 participants from its original 32 ayear earlier, with average daily volumes growing to 517,000 MWh;the ISO handled 167 billion KWh in its first nine months ofoperation, with 42 certified scheduling coordinators, 27 of whichare currently active. Future growth is anticipated with more than10,000 MW of merchant power capacity currently before the stateenergy commission for development.

ISO officials indicated that new transmission planning,development and construction has continued unabated, followingfive- and ten-year plans in place by the three investor-ownedelectric utilities when the ISO assumed responsibility for thegrid.

“There seems be this perception that there are no electrictransmission facilities being added or planned right now (inCalifornia),” Winter said. “The utilities had five- and ten-yearplans and those have continued on. We have reviewed their plans andhave approved many, many lines to be built, and those are beingbuilt at this time. So because we are looking at the process forthe future, people should not think that nothing in happening inthe transmission area. It is happening.”

Ultimately, the ISO, working closely with the threeinvestor-owned utilities, will determine long-term plans for newtransmission and how the cost of that transmission will beallocated to the various grid users, the ISO officials said. Inlooking ahead to possible regional, multi-state operations the ISOboard chairman, Jan Smutny-Jones, head of the state’s independentpower producers, noted the ISO is trying to send a messageout-of-state with its first year’s operations:

“We’re trying to demonstrate to our neighbors here that we havea product that has some value, but a large part depends on thedirection other states surrounding California want to go,”Smutny-Jones said. “In large part regional development has to bedriven by decisions in the other states.”

Richard Nemec, Los Angeles

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