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New Study: Regional Electric Grid Would Supercharge California’s Economy

Posted by Adam Winer on Jan 25, 2023

Joining a Western grid would keep the lights on during extreme weather while creating up to 138,700 jobs and annually reducing energy bills $563 million

SACRAMENTO, Calif. – A new study shows California would see significant economic benefits from participating in a regional electric grid with neighboring states. Conducted by independent consulting firm Energy Strategies on behalf of business association Advanced Energy United (formerly Advanced Energy Economy), the study found that joining a regional transmission organization (RTO) could generate upwards of $21.7 billion in new annual gross state product for California and up to 138,000 new, permanent, living-wage jobs. 

An RTO is a cooperation agreement which allows electric utilities across multiple states to share resources and leverage the cheapest, cleanest, and most reliable energy sources through an organized regional market. Currently, the West is one of the only regions in the U.S. without an RTO managing its power grid.

“This study clearly shows California shouldn’t face its energy affordability, reliability, and clean energy challenges alone. An isolated energy future means a less safe and prosperous California,” said Amisha Rai, Vice President of Policy and Advocacy at Advanced Energy United. “An RTO is critical as we enter this next phase of the clean energy transition in California as it will help keep the lights on during the peak summer months, create jobs and boost local economies."

The benefits of California joining a Western RTO include up to:

  • 138,700 new permanent, high-paying jobs (averaging $91,000 in annual compensation) 
  • $563 million in annual energy cost savings 
  • $21.7 billion in gross state product 
  • $652 million in new state and local revenue
  • 470 MW of new clean energy construction (enough to power nearly 90,000 homes). 

The methodology behind these findings is consistent with Advanced Energy United’s recently published white paper Western RTO Economic Impact Study: Region-wide Analysis, released in July 2022, which examined the economic impact of establishing a RTO for 11 states in the Western US.

Last year, California lawmakers unanimously passed a resolution — ACR 188 — that directs California’s independent grid manager CAISO to produce a report assessing how an RTO could help the state advance its energy and environmental goals. CAISO will release its findings in February.  

This report comes on the heels of significant momentum to establish a regional electric grid in the West. In 2021, state legislators in Nevada and Colorado passed laws directing their state utilities to join an RTO by the end of 2030.

A one-pager featuring the highlights of the report can be found here. A full copy of the California state report can be found at this link on Advanced Energy United’s website

What They’re Saying: New CA Economic Impact Data

  • Alex Jackson, director for American Clean Power-California: “California’s clean energy providers have made huge strides over the last decade making the state a global leader in renewable energy production, and momentum is building across the West around the transition to 100% clean power. This new study affirms the clear economic benefits of working together across state lines to provide all of the wind, solar, geothermal, and energy storage that Californians and millions of people around the region will depend on. While recent gains in real-time energy markets are helping states share power supplies more efficiently, an RTO is the only way to coordinate the long-term transmission planning and investments necessary for the West to achieve its clean energy goals reliably and affordably.”
  • Heidi Ratz, senior manager for market and policy innovation at Clean Energy Buyers Association: “A full West-wide regional transmission organization would bring significant economic and cost-saving benefits to California and other states across the region. State leaders should recognize this moment of opportunity and take steps to expand regional energy markets and transmission efficiency, enabling a more resilient grid of the future and increased options for customer-driven clean energy that benefits everyone.”
  • V. John White, executive director at CEERT: “Expanding and creating an integrated Western transmission grid will reduce electricity costs, increase reliability, and reduce greenhouse gases. A west side RTO is an essential tool for expanding transmission access for clean energy projects."
  • Alli Gold Roberts, senior director of state policy at Ceres: “Major companies in the U.S. want to see Western states coordinate on a regional plan to integrate and deploy clean energy across the region. Companies have ambitious climate and clean energy goals, and this regional approach will help them meet these goals and stay competitive in the global economy. By working together to integrate clean energy onto the grid, states can meet their climate commitments and help businesses and residents reduce energy costs.” 
  • Michael Colvin, director of the California energy program at Environmental Defense Fund: “All Californians deserve access to an affordable, clean and safe electric grid. This assessment gives us concrete next steps to achieve that vision.”
  • Kelsie Gomanie, climate and clean energy advocate at Natural Resources Defense Council (NRDC): “This very timely assessment reaffirms California’s huge economic stake in a fully integrated western electricity grid, and reminds us of the high cost of further delay in achieving it.”
  • Rick Umoff, senior director and counsel at the Solar Energy Industries Association (SEIA).“Extreme weather, volatile fossil fuel prices and a wavering power grid have heightened the need for states across the West to band together to organize a regional electricity market. This report offers a clear economic case for states to step up to secure a more reliable and stable electricity system. The result will be hundreds of thousands of new jobs, lower costs for consumers and a massive build out of clean energy.”

Topics: State Policy, California Engagement, 21st Century Electricity System, Wholesale Markets, Press Releases, Economic Impact, Amisha Rai, California