ANALYSIS: CAISO is bad for California?

The California Independent System Operator (CAISO) is responsible for overseeing and coordinating California’s extensive electric transmission grid that is built and operated by the various California energy utilities.   It was created by the state legislature in 1997 to open and non-discriminatory access to the bulk of the state’s wholesale transmission grid, supported by a competitive energy market and comprehensive infrastructure planning efforts.   But, has it accomplished this goal?   Possibly not.

A recent independent report of CAISO operations supported, in part, by SDCAN suggests that the promised benefits of independent grid management have not been realized.  We’ve assisted in the writing of this analysis and have reviewed the findings of this report.  While we don’t agree with all of the recommendations, we do believe it has much merit.  If you are involved in state energy policy, this is a must-read analysis.

In summary, it finds that state consumers may be worse off with CAISO than they would have been had the IOUs retained control.  Data suggests that CAISO has contributed significantly to the increasing cost of transmission. It argues that relieving CAISO of its existing responsibilities for transmission planning and operation would lead to more efficient and as reliable grid operations. There is evidence that consumers could benefit if the CAISO’s role in markets is significantly reduced or possibly eliminated altogether. Any plan to expand CAISO control is a step in the wrong  direction.

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