RTO Insider examines the possibility of a Western RTO, citing Advanced Energy United's support for this region's hopes to develop a west-wide wholesale market.

PORTLAND, Ore. — The competition for organized markets in the West grew Friday as the Bonneville Power Administration launched a process to choose between day-ahead markets proposed by CAISO and SPP and regulators from five Western states urged the establishment of a new, independent RTO covering the entire West.

“This group proposes the creation of an entity that could serve as a means for delivering a market that includes all states in the Western Interconnection, including California, with independent governance,” regulators from Arizona, California, New Mexico, Oregon and Washington wrote to the chairs of the Western Interstate Energy Board (WIEB) and the Committee on Regional Electric Power Cooperation (CREPC).

The entity “could provide a full range of regional transmission operator services, utilizing a contract for services” with CAISO including eventual “assumption” of CAISO’s proposed Extended Day Ahead Market (EDAM) and its real-time Western Energy Imbalance Market (WEIM).

The prospect of a single West-wide RTO has been growing less likely as CAISO and SPP compete for market share for their proposed day-ahead offerings, and SPP is making inroads on the development of a Western version of its Eastern RTO called RTO West. (See Western Day-Ahead Markets Debated at CREPC-WIRAB.)

At the same time, the latest legislative effort to allow CAISO to become a Western RTO appears to have stalled. Assembly Bill 538 was held by its author in committee in May because of staunch opposition from powerful labor unions in California.

The bill would let CAISO create a governing body free from oversight by California politicians. Currently, the state governor appoints members to the ISO’s Board of Governors, and the state Senate approves them. (See CAISO Regionalization Bill Put on Hold.)

In the past, lawmakers have refused to relinquish control of CAISO, and other Western states have said they will not join an RTO dominated by Californians.

The regulators’ proposal could offer a way out of the stalemate and an alternative to Western entities thinking of joining SPP’s RTO West. “The letter represents a breakthrough in efforts to advance the regions’ energy landscape and is key to creating a market that fosters collaboration, improved reliability and economic growth,” Advanced Energy United, a national clean-energy trade group, said in a statement. AEU is part of a coalition of business and environmental groups called “Lights on California” that advocates for creation of a Western RTO.

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