California's decision moves the Western electricity market one step closer to becoming a reality.
California Legislature Approves Bill to Oversee Western Energy Markets
California lawmakers have taken a significant step towards regionalizing the Western energy markets by approving a bill to establish an independent organization to oversee the Western Energy Imbalance Market and the pending Extended Day-Ahead Market (EDAM).
The bill, which is part of a package of energy proposals, has been welcomed by clean energy advocates and environmental groups. Katelyn Roedner Sutter, EDF's California state director, described it as a message to the West about California's commitment to a fast-moving revolution in how electricity will be bought and sold across the region.
The Environmental Defense Fund has hailed the passage of the bill as a "huge win" for families on a budget and climate action. Leah Rubin Shen, managing director at Advanced Energy United, praised the bill as a pivotal moment for the West.
The bill is expected to improve affordability for consumers, support a more resilient future for the whole region, and boost the development of renewable energy. The broad geographic footprint of the bill is expected to provide the greatest economic benefits.
According to an analysis by the Brattle Group on behalf of the California Energy Commission, the EDAM is projected to save Californians over $1 billion annually and reduce greenhouse gas emissions by 58% in the state.
The creation of the independent organization to oversee the energy markets sets the stage for the formation of a regional transmission organization. This could potentially lead to a more efficient and integrated energy system across the West.
The CAISO remains fully committed to the successful launch of the Extended Day-Ahead Market and will offer technical support throughout the transition. The bill builds on the West-Wide Governance Pathways Initiative, which was started in 2023.
The package of energy proposals has passed and is now headed to Gov. Gavin Newsom, who is expected to sign the bills. In a statement, the California Independent System Operator commended the legislature, Newsom, and the "diverse coalition of stakeholders" for advancing "this important legislation."
The bill also includes measures related to the state's wildfire fund, virtual power plants, and reauthorizing the state's cap and trade program for greenhouse gas emissions. It is expected to expand access to clean electricity that currently goes to waste, supporting a cleaner and more sustainable future for the West.
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