California ISO Growing Up and Out
California's experimental nonprofit electric transmission grid
and wholesale spot power market operations - the Independent System
Operator (ISO) and Power Exchange (PX), respectively - are clearly
working toward becoming larger, multi-state regional operations,
according to officials who marked the one-year anniversaries of
both organizations March 31. A proposed new California law (SB 96)
would make it easier for the state to enter compacts with other
western states to begin to form the regional power operations.
"We are emphasizing getting more participants to join the ISO
because now that we have the infrastructure in place, every new
participant we can bring on board helps to reduce the grid
management charge for everyone," said Terry Winter, ISO CEO.
The PX has increased to 59 participants from its original 32 a
year earlier, with average daily volumes growing to 517,000 MWh;
the ISO handled 167 billion KWh in its first nine months of
operation, with 42 certified scheduling coordinators, 27 of which
are currently active. Future growth is anticipated with more than
10,000 MW of merchant power capacity currently before the state
energy commission for development.
ISO officials indicated that new transmission planning,
development and construction has continued unabated, following
five- and ten-year plans in place by the three investor-owned
electric utilities when the ISO assumed responsibility for the
"There seems be this perception that there are no electric
transmission facilities being added or planned right now (in
California)," Winter said. "The utilities had five- and ten-year
plans and those have continued on. We have reviewed their plans and
have approved many, many lines to be built, and those are being
built at this time. So because we are looking at the process for
the future, people should not think that nothing in happening in
the transmission area. It is happening."
Ultimately, the ISO, working closely with the three
investor-owned utilities, will determine long-term plans for new
transmission and how the cost of that transmission will be
allocated to the various grid users, the ISO officials said. In
looking ahead to possible regional, multi-state operations the ISO
board chairman, Jan Smutny-Jones, head of the state's independent
power producers, noted the ISO is trying to send a message
out-of-state with its first year's operations:
"We're trying to demonstrate to our neighbors here that we have
a product that has some value, but a large part depends on the
direction other states surrounding California want to go,"
Smutny-Jones said. "In large part regional development has to be
driven by decisions in the other states."
Richard Nemec, Los Angeles
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