A Regional Power Market for the West: Risks and Benefits
Date Published: July 2018
Author: Bentham Paulos
This paper has a broad and accessible introduction to the fundamentals of Independent System Operators (ISOs) and Regional Transmission Organizations (RTOs) and their governance. It covers the California ISO (CAISO) in particular, and looks at the operation of the rest of the Western Grid, which does not have an ISO or RTO. In appendices, Mr. Paulos explains the basics of price formation in electricity markets and some of the challenges of operating today’s grid with high variable renewable generation. The paper studies the advantages and risks of regionalizing CAISO, from technical, operational, economic and political perspectives. The specific proposal under consideration to expand CAISO’s jurisdiction at the time of publication was ultimately rejected by the California legislature.