These comments were submitted January 12, 2023.
Background and Introduction
The Western Resource Advocates (WRA), Northwest Energy Coalition (NWEC), Renewable Northwest (RNW), Environmental Defense Fund (EDF), Union of Concerned Scientists (UCS), Western Grid Group (WGG) and Sustainable FERC Project (S-FERC), the “Joint Commenters,” appreciate the opportunity to provide comments on the West-Wide Governance Pathway Initiative Initial Evaluation Framework for Pathways Options, dated December 15, 2023 (“Framework”).
The Joint Commenters are encouraged by the Framework as it outlines a range of structural options and legal questions, operational issues, and other evaluation criteria to be used to analyze each option. Overall, the Framework is a well done, comprehensive proposal of options and criteria. The Joint Commenters recognize and appreciate the diligent and thorough work by the Launch Committee to bring this Framework to fruition.
We encourage the Lauch Committee to continue to act expediently on this work as other market developments are intertwined. First, the recently federally approved Extended Day-Ahead Market (“EDAM”) will begin implementation efforts in the Fall of 2024 and go live in the Spring of 2026. EDAM will be impacted by this effort to create an entity that could allow the independent governance of the Western EIM and EDAM. Also, the potential path to a west-wide wholesale electricity market will affect the decision to join a day-ahead market, such as EDAM, that many utilities aim to make in 2024. Additionally, statutes in Colorado and Nevada require regulated utilities to join RTOs by 2030.2 For these reasons, we view this Framework as a crucial component of the Initiative that should continue to progress on an urgent timeline.
Finally, as the Launch Committee continues its efforts, the Joint Commenters request that they provide additional information and opportunities for participation to stakeholders to increase transparency. For example, as the Launch Committee continues to progress, disclosure of, and potentially additional opportunities for comment on proposals would be appreciated. The Joint Commenters also request an approximate timeline expected for analysis of the options.
Requested Stakeholder Feedback:
1. Do the proposed evaluation criteria support a constructive and thorough assessment of the options?
The Joint Commenters believe the proposed evaluation criteria support a constructive and thorough assessment of the options and we offer a few suggestions when assessing each pathway option with the criteria.
We encourage the Launch Committee to assess the overlap between the evaluation criteria. For example, the proposed evaluation criteria, “an implementation timeline” will impact how broad of a footprint the market has, which will directly impact the maximization of net benefits since several reliability, affordability, and environmental benefits are tied to the range of resource and geographic diversity in a market.
The Joint Commenters also encourage the prioritization and thorough consideration of reliability benefits because they are often difficult factors to quantify but contribute significantly to the financial benefits of a regional wholesale market.
Similarly, we encourage the thorough consideration of environmental factors as they affect and are affected by development of a regional wholesale market.
As reliability and environmental improvements are significant benefits resulting from a market we recommend a full analysis of these issues at a future, appropriate time.
2. Are the bookends reasonably defined to set the boundaries for a timely, productive exploration of available structural alternatives to governing autonomy?
The Joint Commenters think the bookends are reasonably defined. The Launch Committee is rightly using the “status quo” and “abrupt transition” as bookends that will not be studied or pursued in the Initiative.
3. Do additional options not encompassed above, but within the bookends, warrant exploration?
The options within the bookends (Option 0, Option 1, Option 2, Option 3, and Option 4) address a thorough range of potential structures for creating governance autonomy in a western market structure. The Joint Commenters also recognize the need for flexibility and would support the Launch Committee exploring additional options that vary slightly from Options 0-4 or reflect some combination(s) of the options.
The Joint Commenters prefer Options 3 and 4 that outline the single independent Regional Organization (“RO”), which would develop and maintain its own separate tariff from the CAISO for market rules and services officers. These options are most similar to a West-wide RTO that allows for fully independent governance and voluntary participation for all BAAs, including the CAISO.
However, we understand that a structure that separates the market and BAA functions will require more time and effort to stand up, so we would support and encourage the Launch Committee to explore the possibility of analyzing the options in two waves to prioritize the fast timeline needs and analyzing an approach that includes early steps that can be achieved quickly with parallel development of more substantial steps. For example, the implementation path could include the immediate implementation of a 0-1 option while in parallel developing options that include standing up the RO as soon as possible thereafter. Further, the Launch Committee could analyze the options to first stand up an interim structure on an expeditious timeline, and then a final structure, that still allows for operational flexibility to take the form of a full RTO, at a later date. A key consideration for the analysis of an implementation path that does not initially include standing up an RO would be how it impacts decisions to join and thus the market footprint.
4. Should other aspects of the new structure not identified in the comparison matrix in Appendix B be addressed within each option?
No feedback at this time.
5. Are there additional threshold or high priority legal questions that should be addressed?
The Joint Commenters support a thorough legal analysis of each option outlined in the Framework and have previously emphasized the importance of a robust and timely legal analysis in our comments on the Phase One Straw Proposal.4 Given the urgency of the timeline to complete the legal analysis, Joint Commenters support prioritizing legal analysis of Options 0, 1, and 2 – as long as the other options that may require a more complex legal analysis – Options 3 and 4 – are analyzed in full at a later time. We also recommend the end-state of the Initiative’s framework be kept open for evolution, such as we suggested in our response to question 3.
We also encourage the Launch Committee to keep all of the outlined options in the running even if the legal analysis shows hurdles that may be challenging or time consuming to pursue.
6. Are there additional operational questions that should be addressed or prioritized?
As with the legal questions, the Joint Commenters support prioritizing addressing the operational questions for Options 0, 1 and 2 first and for Options 3 and 4 second.
Additionally, since statutes in Colorado and Nevada require regulated utilities to join RTOs by 2030,5 it is important that the options outlined in the Framework are evaluated in time to allow utilities to meet their statutory mandates to join an RO The Launch Committee should explore this question in parallel with operational question 6 that states, “How does the option allow the RO to transition to a full RTO (that may consist of multiple BAAs) for interested parties?”
7. Are there additional issues or categories of issues that should be considered?
No feedback at this time.
We appreciate the opportunity to engage in the WWGPI. We look forward to ongoing engagement in this Initiative and with other stakeholders in the West.
4 Joint Comments on West-Wide Governance Pathway Initiative Phase One Straw Proposal available at:
https://www.westernenergyboard.org/wp-content/uploads/WWGPI-PIO-Comments-on-Str-Prop-Oct-16.pdf
5 S.B. 21-072, 73rd Gen. Ass., First Reg. Sess. (Colo. 2021); S.B. 448, 2021 Leg., 81 st Sess. (Nev. 2022).
Joint Comments WWGPI Evaluation Framework Page 3 of 4
/s/ Vijay Satyal – Western Resource Advocates
/s/ Kelsie Gomanie – Sustainable FERC Project
/s/ Mark Specht – Union of Concerned Scientists
/s/ Lauren McCloy- NW Energy Coalition
/s/ Michael Colvin – Environmental Defense Fund
/s/ Diane Brandt – Renewable Northwest
/s/ Amanda Ormond – Western Grid Group