CAL-ISO: Regional Market Would Save Ratepayers $1.5B by 2030

by | Jul 13, 2016

The California Independent System Operator (CAL-ISO) released final study results on July 12 – revealing the potential effects of creating a multi-state, regional electric market.

The findings demonstrate, that by expanding the energy grid, California would reach its 50-percent renewable energy goal; while saving consumers up to $1.5 billion by 2030, reducing greenhouse gas emissions, and adding jobs in-state.

Indeed, a western-state interconnected electric system is expected to lower power purchasing costs, leverage market and operation efficiencies over a larger geographical area, and optimize transmission project planning.

“The studies’ conclusions mirror the preliminary results showing the benefits of expanding the ISO market, – advantages we predict will only grow over time,” said CAL-ISO CEO Steve Berberich. “We believe the findings in these studies will help drive the formation of a new, more efficient, cost-effective, and greener western electric grid. It’s also clear that a regional grid allows California and other states to eventually exceed their renewable goals, including California’s 50-percent mark.”

 The research – conducted on behalf of the ISO by leading experts in the fields of energy, environment and economics – was required under the state’s Clean Energy and Pollution Reduction Act, or Senate Bill 350, which set a 50-percent renewable portfolio standard by 2030.

 Market simulations demonstrated that a regional energy market would reduce California’s carbon dioxide emissions in 2030 by from 4 million to 5 million metric tons, or 8  percent to 10 percent of the state’s total electricity sector emissions. The western region would see a decrease of 10 to 11 million metric tons, or about 3.5 percent, in 2030.

Other potential effects of an expanded regional energy market, based on study results, include:

  • Creation of 9,900 to 19,400 new jobs in the state by 2030, primarily as a result of lower energy rates;
  • A slight increase in the state’s household income of $300 to $550 on average by 2030;
  • Increased investment in low-cost clean energy generation, including new wind and solar resources, to meet the state’s renewable energy targets;
  • Reduced emissions of carbon dioxide, nitrous oxide, sulfur dioxide and hazardous particulate matter in California and across the western states;
  • Economic benefits to disadvantaged communities, including stimulating job growth and increasing incomes; and
  • Lower energy costs due to smaller operating reserves.

The studies were launched in February, and since then, hundreds of stakeholders have engaged in a transparent public review process, including comments from diverse voices from the energy industry, regulatory agencies, utilities, consumers, and environmental advocates.

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