NEWS: Heat Wave-Induced Energy Crisis Spotlights Need for a Western RTO

Posted by Jane Reynolds on Aug 3, 2021 2:00:00 PM

Heat Wave & RTO

Record-breaking heat waves and drought in the western U.S. are threatening the reliability of electric power, as electricity use is up and hydropower and energy imports from neighboring states are down. In California, Flex Alerts – asking consumers to conserve energy to relieve grid stress – are becoming a regular occurrence. And these weather patterns are no longer unusual: “This is really the new normal,” AEE policy director Leah Rubin Shen recently told Fox 40 of Sacramento. “These weather events are becoming more and more common and more and more frequent.” The energy crisis that results points to the need for a regional transmission organization (RTO) in the west, connected with a more expansive transmission network, to move power – especially renewable energy – where it’s needed, when it’s needed, at lowest cost.

Consumer energy needs in response to the heat waves are generating demand that is greater than the available supply. Utility Dive notes particular stress on California’s hydroelectric resources, which are 40% down from last year, due to drought. 

Connecting the western states to each other and to ISOs or RTOs in other parts of the U.S. would help ensure electricity supply during critical moments. “Building more transmission could definitely be part of the solution,” Rubin Shen told Fox 40. “Being able to connect to the Midwest, for example, which is a wind-rich region, with the need for that energy out here in California, is definitely something that could be part of meeting our energy needs in the future.”

A western RTO would also make the clean energy market more accessible, competitive, and cost effective. In E&E News, AEE managing director Amisha Rai called for “the RTO of the future” to bring the west together.

One option for a regional market would be for western states to build an RTO from scratch. Another would be to connect to an existing RTO like the Arkansas-based Southwest Power Pool (SPP), which is considering a western expansion, according to E&E News. Either way, there is momentum building for a transmission-linked regional market, state by state. 

Newly signed bills in Nevada and in Colorado call for state utilities to join an RTO by 2030. Oregon also recently enacted a bill directing the state’s Department of Energy, in consultation with the Public Utility Commission, to prepare a report identifying the benefits, opportunities, and challenges posted by the development or expansion of an RTO in Oregon. The Colorado bill also implements a streamlined process for transmission projects to be evaluated, financed, and built – a rare instance of a state embracing transmission development for its benefits in reaching state climate and energy goals. 

“Those two bills [in Nevada and Colorado] send a very strong signal” about the growing need for an RTO in the west – especially amidst extreme weather conditions that put a strain on state energy systems – and states’ willingness to work toward its fruition, Rai told E&E News. “We do know that regulators and decision makers and utilities in the other [Western] states are watching. Nothing happens in a vacuum, and that’s a good thing.”

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Topics: State Policy, News Update, California Engagement, Wholesale Markets