A bill strongly supported by the California Chamber of Commerce as a Cost Cutter that will reduce energy costs for Californians won unanimous support this week from the first Senate policy committee to consider it.
SB 540 (Becker; D-Menlo Park) authorizes the California Independent System Operator (CAISO) and California utilities to integrate into a broader regional energy market governed by an independent regional organization.
Besides making electricity more affordable for California consumers, the bill will protect the state’s procurement, environmental, reliability and other public interest policies, the broad coalition supporting the bill told the Senate Energy, Utilities and Communications Committee.
Coalition members in addition to the CalChamber include organized labor, consumer and environmental advocates, technology companies, clean energy developers, investor-owned and public power utilities.
Supporters emphasized to the committee that creating an independent organization responsible for energy market rules would enable more utilities across the West to participate in consolidated electricity markets. Integrating with neighboring markets would make electricity in California more affordable and reliable while also reducing emissions.
Saves Costs
The coalition pointed out that an analysis prepared for the California Energy Commission (CEC) this year determined that a West-wide, day-ahead market could produce nearly $800 million in annual cost savings for California customers.
Improves Electric Reliability
SB 540 would enhance the reliability of the California power grid by enabling more efficient and coordinated management of energy supply and demand across the Western region.
Having better access to shared resources will better equip grid operators to draw on a wider resource pool during peak demand periods, reduce the likelihood of blackouts and support the resilience of the grid in the face of growing challenges such as extreme weather events and climate-driven disruptions.
Increases Use of Clean Energy
More clean energy will be available in California and around the West because the consolidated western energy market will enable energy producers to reduce the times when they must deliberately curtail production because they have nowhere to send and sell the power they produce.
Curtailment is a growing problem for California solar and wind power generators. The CEC study determined the expanded market would reduce wind and solar curtailment by 10%.
Given that 80% of energy customers in the West are served by utilities with net-zero carbon energy mandates, the demand for clean energy resources will continue to grow, the coalition letter said. “Maximizing use of existing clean generation is the fastest, most affordable way to reduce emissions,” the letter said.
SB 540 is set to be considered next by the Senate Judiciary Committee on April 29.
Staff Contact: Jon Kendrick
