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Energy Insights

June 2015  •  Issue 4

Steve Berberich photoAs you can see from this edition of Energy Matters, the California ISO continued to play a pivotal role in the reshaping of the energy grid in the first quarter of 2015, and we have a great deal of news to share.

In March, the ISO announced a blockbuster development in the energy sector: Northwest utility PacifiCorp is exploring joining the grid as a full member, which allows the entire electric industry and its consumers to benefit from economies of scale, greater diversity of power sources, and integration of rising amounts of clean energy into the power mix.

The ISO’s Energy Imbalance Market (EIM) reported continuing cost savings to participants, and new members expressed interest in coming on board. The ISO also heard California Gov. Brown’s call for half of all energy to come from renewable sources by 2030, and has been working with industry leaders on policies to make that happen.

In April, the ISO was privileged to be visited by former U.S. Secretary of State George Shultz, who observed grid operators keeping electricity flowing and incorporating more clean energy into the system. Secretary Shultz, a supporter of renewable energy, gave encouraging words to the organization on its accomplishments.

The ISO also released a favorable summer assessment report and developed a companion Strategic Vision Plan to reflect rapid advances in clean energy technology and transmission that will spur wholesale change in the electricity sector in the coming years. In addition, the ISO is gearing up for its annual Stakeholder Symposium, the largest group of industry executives in the West gathering to discuss the hot topics affecting electricity generation and delivery.

We invite you to read about our achievements, and our future goals, as we forge a path toward a greener, larger and more sophisticated grid, while maintaining reliability and efficiency.


Steve Berberich, President and CEO

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Western utility announces possibility of joining ISO grid

ISO expansionPacifiCorp, one of the largest utilities in the West, is studying the potential benefits of joining the ISO grid, which could pave the way for more renewable energy to be added to the power mix while boosting reliability and flexibility.

With 1.8 million customers across six states, PacifiCorp joining the ISO would improve coordination of power generation and delivery over a larger geographical area, accelerating integration of clean energy into the grid and reducing costs of operation. The utility will conduct an analysis of the benefits of becoming a full Participating Transmission Owner over the next several months.

PacifiCorp already participates in the Energy Imbalance Market (EIM), the ISO’s real-time market that automatically finds and dispatches the lowest cost energy to serve customer demand. The utility has realized cost and operational benefits of more than $8.5 million since the EIM launched last November.

Becoming a full member in the grid will allow the ISO and PacifiCorp to benefit from increased efficiencies, improved forecast of supply and demand trends from a broader region and an expanded array of power sources, including solar and wind energy.

To view the press release, click here.

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California’s goal to reach 50 percent renewable use

Strategy for more renewabablesCalifornia leads the nation in the transition to clean, environmentally sustainable electricity generation and is already on track to meet its goal of 33 percent of its energy coming from renewable sources by 2020.

In his historic fourth term, Gov. Edmund G. Brown Jr. called on the state to “green” the power grid even further, laying out his vision of California meeting 50 percent of its electrical needs from renewable energy by 2030, the most ambitious clean energy goal in the U.S.

Brown outlined his plans for fighting climate change in his inaugural address in January. Click here to see the text of Brown’s speech.

Getting half of California’s electricity from renewable sources is critical to reducing carbon emissions that contribute to global warming. As more renewable energy becomes available, grid operators are at the vanguard of incorporating it into the power mix, while providing affordable and reliable electricity to customers.

The ISO is hard at work to find efficient ways to integrate this increased clean electricity into its power grid.

Click here to visit the ISO’s “Clean, Green Grid” webpage for more information on renewable energy.

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EIM builds on success; New entrants joining

EIMThe ISO’s Energy Imbalance Market (EIM) and the benefits it can produce for power customers continues to show positive outcomes.

The report on first-quarter 2015 benefits shows the EIM has generated $11 million in wholesale power cost savings for PacifiCorp and ISO customers from November 2014 through March 2015.

Interest in EIM has increased, with two more utilities announcing their intention to participate in the real-time market. Puget Sound Energy and Arizona Public Service agreed to enter the market in October 2016. They will join Las Vegas-based NV Energy, which enters the EIM October 1 this year.

Puget Sound Energy (PSE), based in Bellevue, WA, announced March 5 its intent to join EIM, estimating the partnership would produce savings ranging from $18 million to $30 million per year. Adding the utility, established in 1873 and serving more than one million customers in 10 Washington state counties, will produce about $4 million in additional benefits for current EIM participants. To review the press release click here.

Arizona Public Service (APS) formalized its intention to participate in the EIM by signing an implementation agreement with the ISO on May 18. The largest utility in Arizona serves more than 1.1 million customers in 11 of the Grand Canyon State’s 15 counties. The 125-year-old company is projected to reduce its costs by $7 million to $18 million per year. Click here to view the press release.

Visit the EIM overview page on the ISO website here.

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ISO lays out its vision for incorporating more renewables into the power grid

Strategy for more renewabablesBecause of swift advances in the renewable energy sector, the ISO updated its long-range blueprint to reflect its growing role in reshaping the energy marketplace and further greening the grid.

In March, the ISO Board of Governors approved an addendum to its 2014-2016 strategic vision, laying out changes on the electricity landscape horizon and ways to meet Gov. Edmund G. Brown Jr.’s call for 50 percent of the state’s energy to come from renewable sources by 2030. California is already on track to meet its goal of 33 percent of its energy from renewable sources by 2020.

Richard Maullin, chair of the ISO board, explained the vision statement was needed to address the issues surrounding integration of rising amounts of renewable wind and solar energy into the power grid, including the growing occurrence of overgeneration, producing excess power at times of the day when energy is not in high demand.

“The strategic vision summarizes the opportunities and challenges facing California and the West in the ongoing transition to a low-carbon electric grid,” Maullin said. The statement emphasizes strategies for matching supply with energy demand, coordinating usage with production, while reinforcing the benefits of regional cooperation, assuring grid reliability and reducing carbon, he said.

To view the document, “Pursuing a Strategic Vision for a Sustainable Energy Future,” click here.

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Secretary George Shultz visits the ISO

Image PlaceholderFormer U.S. Secretary of State George P. Shultz, a prominent statesman and clean energy advocate, visited the ISO in March to observe first-hand the work being done to reduce carbon from the power grid.

Serving under President Ronald Reagan from 1982 to 1989, Secretary Shultz remains one of the most admired Cabinet members of the 20th century. While he steered the nation to the close of the Cold War and negotiated trade agreements with China, he also was one of the early believers in global warming.

Today, as chair of the energy policy task force of the Hoover Institution at Stanford University, the 94-year-old continues to address the growing threat of climate change to U.S. national, economic and environmental security.

While visiting the ISO’s Folsom campus, he viewed the Market Control Center floor and learned how the operators balance demand and supply of electricity every five minutes for about 80 percent of the state, while integrating rising amounts of renewable energy from solar and wind sources.

The work at the ISO supports Shultz’s campaign to reduce greenhouse gas emissions worldwide.

"I'm worried about climate change and the existential threat to our world," he said. "There were doubters then, and there are doubters now. But the climate is warming. I don't think there's a question about that."

Secretary Shultz is currently a distinguished fellow at the Hoover Institution at Stanford University, advisory council chair of the Precourt Institute for Energy Efficiency, chair of the MIT Energy Initiative external advisory board, and chair of the Hoover Institution's Shultz-Stephenson Task Force on Energy Policy.

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2015 Summer Assessment finds electricity supply adequate for summer

Image PlaceholderThe 2015 Summer Loads and Resources Assessment outlook is encouraging, despite the reduced hydroelectricity production.

Because of the current drought, this summer will see the lowest amount of hydroelectricity available in 10 years. But from June 1, 2014 to June 1, 2015, about 2,300 megawatts of new generation interconnected to the grid (96 percent is solar) will largely offset the reduced power from hydroelectric sources.

Instead, the big worry this summer is wildfires.

The drought could contribute to a record-breaking wildfire season, which may impact power transmission. The concern is not just fire touching a line or burning down or damaging power poles and structures. Hot smoke can quickly trip transmission lines off line. ISO grid operators and firefighters from the California Department of Forestry and Fire Protection developed plans to protect high-voltage lines and maintain reliability.

To see the full summer assessment, click here.

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