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Should California's Grid Join a Larger Regional Electricity Market? (latimes.com) 134

One in every 9 Americans lives in California. And right now its Congress is debating a bill that "would help establish a regional electricity market capable of tying together the American West's three dozen independent power grids," according to the Los Angeles Times' newsletter about climate change and energy issues.

But that bill "has bitterly divided environmentalists," with some seeing it "as a plot by greedy energy companies to enrich themselves." Supporters say it would smooth the flow of solar and wind power from the sunny, windy landscapes where they're produced most cheaply to the cities where they're most needed. It would help California keep the lights on without fossil fuels, and without driving up utility bills... [S]olar and wind power are still cheaper than planet-warming coal and fossil gas. Which is why Michael Wara, a Stanford energy and climate scholar, isn't worried that SB 540 will leave Californians drowning in dirty power. In a regional market, solar and wind will usually outcompete coal and gas. "Any energy source that requires fuel to operate is more expensive than an energy source that doesn't," he said.

California also needs to prove that a grid powered entirely by clean energy is affordable and reliable. The state's rising electric rates are already a big concern. And although the grid has been stable the last few years, thanks to batteries that store solar for after dark, keeping the lights on with more and more renewables might get harder. Regional market advocates make a strong case that interstate cooperation would help.

For instance, a market would help California more smoothly access Pacific Northwest hydropower, already a key energy source during heat waves. It would also give California easier access to low-cost winds from New Mexico and Wyoming. Best of all, that wind is often blowing strong just as the sun sets along the Pacific. Another benefit: Right now, California often generates more solar than it can use during certain hours of the day, forcing solar farms to shut down — or pay other states to take the extra power. With a regional market, California could sell excess solar to other states, keeping utility bills down. "This is about lowering costs," said Robin Everett, deputy director of the Sierra Club's Beyond Coal Campaign.

"Unlike with past regional market proposals, California would retain control of its grid operator, with only a few functions delegated to a regional entity," the article points out. But opponents still worry this would give new powers to an outside-of-California group to thwart clean energy progress (if not gouge customers). Amendments passed this week add a "Regional Energy Markets Oversight Council" to address that concern — but which lost support for the bill from some of its earlier supporters.

"The amendments would make it easier for the Golden State to bail," notes the climate newsletter, and "Out-of-state utilities don't want to waste time and money committing themselves to a California-led market only to lose California, and thus many of the economic benefits..."

Should California's Grid Join a Larger Regional Electricity Market?

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  • by TheMiddleRoad ( 1153113 ) on Monday July 21, 2025 @04:46AM (#65534108)

    The issue is not being part of a larger market. The issue is the deal signed and all the unanticipated consequences. Who is going to get rich doing this?

    • The issue is not being part of a larger market. The issue is the deal signed and all the unanticipated consequences. Who is going to get rich doing this?

      Is Enron's zombie involved in this?

    • Who is going to get rich doing this?

      It's good for the environment, but liberals oppose it because it will also be cost-effective and thus profitable.

      Then liberals wonder why they keep losing elections.

    • Who is going to get rich doing this?

      Whoever can provide the most power at the lowest price at the times it's needed.

      • pollyanna

        • pollyanna

          It's how basically everything else works. Provide the product desired and you make money -- and people get what they want to buy. The core point, though, is that it's silly to worry about who is going to get rich. Just make sure the market is competitive, then see who can compete the best. This particular market is a bit hamstrung by regulations, but diversifying the supplier sources should actually help to ease the effect of that a bit.

    • by taustin ( 171655 )

      Who is going to get rich doing this?

      That is the only question that needs to be asked when California politics is involved.

  • by Quantum gravity ( 2576857 ) on Monday July 21, 2025 @05:28AM (#65534152)
    Europe has been moving towards a common energy market since 2006, and currently most of Europe is integrated, and the transition to renewable energy is part of this.

    Impact assessments have shown various technical, economic and administrative benefits, resulting in significant cost reductions.

    California's electricity grid should definitely be integrated, but with a clear strategy for transitioning to renewable energy. With a reduction in cost and less CO2 emitted, perhaps it is inevitable?
    • by vyvepe ( 809573 )

      Europe has been moving towards a common energy market since 2006, and currently most of Europe is integrated, and the transition to renewable energy is part of this. Impact assessments have shown various technical, economic and administrative benefits, resulting in significant cost reductions.

      There were no electricity cost reductions in Europe in the past 16 years for households. There was a huge bump in price after COVID and when Russia invaded Ukraine. After that it somewhat stabilized but it is still up by about 64% in this period: https://ec.europa.eu/eurostat/... [europa.eu]

      There was a small price drop for electricity for companies in 2023. But it is not dropping any more either now. And overall electricity price for companies went up by about 90% in the last 16 years: https://ec.europa.eu/eurostat/. [europa.eu]

      • Average European prices have been at their lowest in 2024 since 2021, despite volatility. But I never said anything about historical prices, just the benefits of a market.

        When a country produces more energy than it needs, it can export it and get paid for it. A possible downside is that this could push up prices locally when prices rise nearby, but it should result in a more reliable and efficient supply of electricity.
        • by vyvepe ( 809573 )

          Average European prices have been at their lowest in 2024 since 2021, despite volatility.

          Did you look at the charts I posted? They are published by Eurostat which is the authoritative source for EU. The charts clearly show your claim is not true for households and it might be true for companies if your "since 2021" actually means excluding 2021 (i.e. since 2022). If there are any price reductions then they are not propagated down to households and mostly not propagated down to companies.

          You are twisting truth like you work for an electricity exchange house in Germany :)

          Maybe the common EU el

      • What if wholesale electricity costs are going down and often go negative indicating massive oversupply, but retail prices are administered by committees explicitly directed by law to decouple supply from demand?

    • Re: (Score:2, Interesting)

      by Anonymous Coward

      That must be why Norway is looking to cut energy links [euronews.com] with Europe /s. There are pros and cons to linking up grids, and anyone trying to make out like the cons don't exist is doing a disservice.

      • There as been some internal political turmoil in Norway. But Norway is not part of the EU but is part of the EEA (EU-light) and must implement EU market laws. And Norway has made huge amounts of money by exporting gas to the EU, due to Russia's war.

        It is therefore unlikely that Norway will break its connection to the EU market and risk a trade war.

        At the same time, the EU is investing in more cables for the common market, and all countries make money in the internal market.
  • by aaarrrgggh ( 9205 ) on Monday July 21, 2025 @06:19AM (#65534180)

    To make an effective western grid more transmission lines are needed. Yes, wholesale feed-in rates might go down due to the mechanics of pricing (oversimplifying: last MW committed determines the price everyone is paid, and you would have more generation competing for that last MW). The problem is that the transmission charges would make it difficult for energy to flow from point A to point B. You see this today in California's grid where some transmission lines and nodes have a negative marginal cost while others are quite high.

    Really the best solution is microgrids where regions purchase/sell power to the grid but the grid doesn't control the majority of energy flow. The microgrids need multiple sources of storage and generation, but when things don't get averaged out over a larger area there is less opportunity to game things. I'd also personally like to see separate day-ahead and hour-ahead forecast rates, along with realtime rates for any delta. That creates an opportunity to better balance systems and keep high-cost energy off the grid and increasing the costs.

  • The reality (Score:4, Interesting)

    by ishmaelflood ( 643277 ) on Monday July 21, 2025 @06:38AM (#65534224)

    The lived experience of the Australian East Coast grid is that whacking in loads of unreliables (solar wind) with inadequate storage (11 weeks worth) will kill the economics of the fossil fuel and nuclear plants, which work best as baseload providers, not infilling for the unreliables.

    • Sorry, I forgot the conclusion... therefore all surrounding grids that rely on reliable energy sources will find they are rendered uneconomic by the often free but usually non existent unreliable power sources the CA grid has encouraged.

      • by mjwx ( 966435 )

        Sorry, I forgot the conclusion... therefore all surrounding grids that rely on reliable energy sources will find they are rendered uneconomic by the often free but usually non existent unreliable power sources the CA grid has encouraged.

        In his rush to try and blame renewable energy, he forgot to mention the East Coast power grid consits almost entirely of privatised energy companies. But he could never admit that's what is really wrong with it. Control was taken away and given to unaccountable firms that have done nothing but milk it for profit (except when they've got their hands out to the government for more public money, so they can build stuff to then milk for profit).

        There's a reason Western Australia has cheaper power despite it

    • The lived experience of the Australian East Coast grid is that whacking in loads of unreliables (solar wind) with inadequate storage (11 weeks worth)...

      11 weeks of storage? That's an enormous amount. Some quick searching shows California currently has something like 11 hours of battery backup.

      Whether that's enough, well, I don't recall ever having 11 weeks of still air and clouds when I lived there. I'll let others with more real knowledge explain the actual math.

    • I don't know where you got 11 weeks from. Did you mean 11 hours?

      Anyway, the problem with nuclear power is that it doesn't load-follow cost effectively. That means nuclear power, just like renewables, cannot cover 100% of a nation's electricity needs. The carbon-free solution for both nuclear and renewables is the same: more grid storage.

  • UK (Score:4, Insightful)

    by rossdee ( 243626 ) on Monday July 21, 2025 @07:13AM (#65534246)

    Yeah they should connect to the UK, that way the solar panels would compliment each other. (when its daytime in CA its night in the UK.)

    • by hwstar ( 35834 )

      Even better: A worldwide superconducting HVDC transmission line. Also known as a supergrid.

      https://spectrum.ieee.org/lets-build-a-global-power-grid

      Regrettably, the tech isn't there yet, and it won't happen as long as there is geopolitical conflict.

  • by nospam007 ( 722110 ) * on Monday July 21, 2025 @08:40AM (#65534334)

    It would violate the law, Betteridge's law of headlines with a question mark.

    Those are always to be answered with NO!

    • Re:NO! (Score:4, Insightful)

      by swillden ( 191260 ) <shawn-ds@willden.org> on Monday July 21, 2025 @12:33PM (#65534762) Journal

      It would violate the law, Betteridge's law of headlines with a question mark.

      Those are always to be answered with NO!

      Except in this case the answer is clearly "yes". Connect the grids as far and wide as possible, and let market forces drive production up and costs down. The argument that "but then Californians might sometimes be using dirty power from coal plants in Nevada" is just stupid, because while that might happen sometimes, it also means that people in other states will use more of CA's renewable power.

      What matters isn't who uses which, but that we maximize the total use of renewables and minimize the total use of fossil fuels. Given that renewables are dramatically cheaper than fossil energy, this means that just letting the market work will move us in the right direction. Broad interconnection and competitive markets will serve to ensure that the cheapest and greenest energy sources are 100% used and never wasted, not until the whole western US has enough renewables that renewable output sometimes exceeds the consumption of the entire region. It will further encourage deployment of more and more super-cheap renewables, driving fossil energy gradually out of the market.

      Note that it's also important that wholesale prices not be tightly regulated, that the market be free to seek proper price equilibrium. Why? Because it's important that it be possible for, say, gas peaker plants to be able to make an absolute killing in the rare cases that available renewables fall short, so that power companies are motivated to operate and maintain those plants -- or to replace them with energy storage systems (battery, pumped hydro, whatever) so that those can make a killing when they're needed.

      If at some point we fall into a local minimum where the market isn't incentivizing the shift to renewables + storage, then it will make sense to find some way to intervene with regulation. But, again, the best strategy will be to harness the market. For example, just internalize the carbon emission externality by applying a carbon tax, then let the market work out the power balance -- which could even include fossil fuel plants with carbon capture systems, who knows? At the present, though, costs favor renewables even with the carbon externalities of fossil plants.

  • by ihadafivedigituid ( 8391795 ) on Monday July 21, 2025 @09:03AM (#65534378)
    I live in California and used to work in the Texas electricity market (ERCOT). I don't want a bunch of out of state pirates manipulating our market again. Our homegrown pirates are bad enough.
    • I live in California and used to work in the Texas electricity market (ERCOT). I don't want a bunch of out of state pirates manipulating our market again. Our homegrown pirates are bad enough.

      How would out of state "pirates" manipulate the CA market? If the pirates want to charge more for electricity than it costs locally, use the local power. If they're offering it for less (which is likely the case, since everywhere around CA has cheaper power than CA does), then buy it.

      This seems like nothing but a win for CA residents. The residents of other states in the area might not fare so well, since their own generation companies will prefer to sell to CA for the higher prices available there.

  • From the fine article:

    Some consider regional power-trading a crucial market-based tool for accelerating climate progress. Others see it as a plot by greedy energy companies to enrich themselves.

    How dare anyone try to make a profit on the sale of goods and service, am I right?

    Profit isn't good, or bad, but it is necessary to keep a business going. If energy companies aren't making a profit then the people running them will close the company and find someplace else to invest their money. What keeps the greedy from gouging people for profits is competition, and with a larger electrical grid there would be more opportunity for competition to keep people from being too greedy.

    • The issue is the proportion of profit, reinvestment. People remember Enron which was big on profit, not so much investment. That's why people are wary. It's not really very hard to understand. In many countries, though, grids are nationalised.
  • SB 540 started out as a smart evolution of California’s grid strategy — enabling them to join a broader Western electricity market that cuts costs, reduces emissions, and boosts reliability by sharing renewables across state lines. And it *still could be* — except for the poison pill that the fossil fuel lobby buried in Section 2(c): the Regional Energy Market Oversight Council (REMOC). This unelected new oversight council sounds like a watchdog but functions like a trapdoor, with the power to force California out of the market on short notice, no matter the consequences.

    That’s why a coalition including the Environmental Defense Fund, Union of Concerned Scientists, and even Amazon(!) now opposes the bill unless amended. REMOC could *force* California to exit the regional market with just 120 days’ notice, even for minor or ambiguous infractions. That kind of uncertainty makes other states think twice about joining at all. And if they bail, the only winner is the fossil fuel industry -- we get balkanized markets, weaker coordination, and fossil-heavy grids consolidating power elsewhere. REMOC is the kind of provision that fossil energy providers would *love* — because it keeps California isolated and limits the states leverage to push for real decarbonization.

    And guess who wins when the largest energy consumer in the American West isolates themselves from the table? If California withdraws or scares off partners, the rest of the West defaults to fossil-friendly grid systems like SPP. REMOC doesn’t safeguard the future — it hands it over to the fossil fuel industry.

  • by pele ( 151312 )

    How americans roam around the planet dictating who should use what source of which energy yet can't fix their own energy issues...

  • I'd think they'd be perfect for each other.

  • California does not have a congress, unless the article is referring to the casting couch.

    • Yea, that's a bit of a head scratcher to me. I'm guessing the author meant to say "And right now its legislature"... The State Legislature being composed of the State Assembly and State Senate.

  • by kenh ( 9056 )

    I thought one of the things that makes Texas special is that we are on our own power grid, not part of any other, larger/regional power grid, now I hear that California has its own power grid, not part of any other?

    I'm confused.

    Countless Californians mocked Texas for having its own private power grid back when we had the huge blackout in Texas a couple years ago, but it turns out CA has their own private power grid too?

  • I first heard about this more than 10 years ago & I thought it was very much worth doing even if expensive.
    But I don't know if it'll ever come to pass

  • PGE is downright evil and neither the CPUC nor any other part of our government seems to be able to do anything to rein them in, maybe getting some other states involved will help shine a light on whatever corruption allows this to continue.

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