As possibly the first step toward the formation of a multi-statewestern U.S. electricity transmission grid operator, the CaliforniaIndependent System Operator’s governing board has authorized theISO management to discuss with Nevada regulatory staff a deal underwhich the California nonprofit grid operator would expand itsoperations to handle Nevada. Public Utilities Commission staff inNevada raised the issue last month as an option for the state as itanticipates a new law that will open Nevada power markets nextspring.

The Nevada PUC staff proposal reportedly would first have aNevada entity work with the California ISO, which eventually wouldmerge its system with Nevada’s. The attraction for Nevada is thefact that its neighboring state’s ISO is up and running, whileNevada will have to wait a minimum of a year to get FERC approvalof the so-called “Desert Star” (Desert Southwest Transmission andReliability Operator), which would involve Arizona and New Mexicoutilities, along with Nevada Power’s control area.

The California ISO, whose board chairman is vocal aboutpromoting the creation of a Western ISO, has developed six possibleoptions for working with Nevada, only one envisions a totalabsorption of Nevada’s grid management. Another would split thetransmission control between the two states, but function as onemarket.

Other options are more varied and a couple would have Nevadaonly contract for specific administrative functions fromCalifornia, such as billing and settlements functions using eitherCalifornia’s or Nevada’s protocols.

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