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The CAISO in 2022: Perspectives from a Long Board Tenure

By By Ashutosh Bhagwat, Chair, ISO Board of Governors
January 6, 2022

 

Hello. My name is Ash Bhagwat, and on January 1, I became the new Chair of the California Independent System Operator’s Board of Governors. I wanted to use this opportunity to wish everyone a Happy New Year, as well as share some of my thoughts on where the California ISO has been, and my hopes for where we can go in 2022.

To start off, a little about my background. I was first appointed to the Board of Governors by Gov. Jerry Brown in May of 2011, and since then have been reappointed to several three-year terms, most recently by Gov. Gavin Newsom. I also have a day job, as a Distinguished Professor of Law at the UC Davis School of Law. My academic specialty is not actually energy law, it is constitutional law with a particular interest in free speech (my most recent book, Our Democratic First Amendment, was published in 2020), though I do teach Economic Regulation and Administrative Law. Given that I have been an academic for most of my adult life, one thing I have particularly enjoyed about serving on the ISO Board is that it has given me an opportunity to participate in actual policymaking and implementation in an area—decarbonization and addressing global warming—which I am convinced is the greatest challenge currently facing humanity. I am deeply grateful for the opportunity, and for having the privilege of working with the highly competent, and deeply engaged group of people at the ISO.

My most striking observation during the 10-plus years that I have served on the ISO Board has been the massive changes in the organization and its culture during that time. When I joined the Board in 2011, the ISO was a highly technically competent organization, and a leader in implementing complex markets, in particular the Market Redesign and Technology Upgrade we launched to improve our markets in 2009. Since then, however, the ISO has embraced a much more active role in implementing California’s extraordinarily ambitious decarbonization and climate change goals, and has become a world leader in developing policies that integrate intermittent, renewable resources onto the grid without sacrificing reliability. We are literally the world’s leader in implementing battery technology onto the grid, as well as in enabling other cutting-edge technologies such as demand response and using renewables to provide ancillary services. I am extremely proud of the ISO’s accomplishments in these areas.

But, of course, our work is not done. To the contrary, we are moving into one of the most exciting, but also challenging times on our path to decarbonization. This next year promises to be a particularly pivotal one. First and foremost, the ISO must, of course, continue to stay sharply focused on summer readiness. The snowpack, thankfully, is looking better this year, but we must still be ready for the consequences of ongoing climate change, including extreme heat waves and wildfires. The fact that our operators managed to get through the summer of 2021 without any service disruptions is a tribute to their skill and dedication, and I feel confident about their ability to get us through 2022 as well.

In addition, we have crucial longer term goals to pursue. First, and to my mind foremost, is advancing regional markets, and in particular the ISO’s Extended Day-Ahead Market initiative known as EDAM. We all know that integrating large amounts of intermittent renewables requires access to a diverse set of resources, including resources that are geographically diverse. Regional coordination and collaboration are crucial to that effort, and EDAM is the most important step forward in that direction since the creation of the ISO’s highly successful Western Energy Imbalance Market in 2014. This is going to be the crucial year for getting EDAM up and running. Lots of hard work to do, but I am confident the ISO and our partners will reach the finish line to the benefit of millions of electricity consumers in California and the Western United States.

The other truly exciting initiative that I hope to see advanced this year is greater integration of our transmission planning process with the procurement process of the California Public Utilities Commission (CPUC). With the impending retirement of the Diablo Canyon nuclear plant and the state’s once-through cooling gas units that can no longer use ocean water to cool their machinery, California is going to have to add a LOT of new resources to our system in the near future. This provides a once-in-a-lifetime opportunity to rationalize this process and maximize use of existing or easily upgraded transmission. One aspect of this is smart placement of new offshore wind generation, but there is so much more potential. The ISO’s Transmission Planning group is already taking important steps forward, and I look forward to further advancing these efforts in 2022.

Finally, I look forward this year to continuing to build our relations with the CPUC and the California Energy Commission in developing a rational, joint strategy towards achieving California’s targets of 60%, and then 100% carbon-free energy between now and 2045, as called for in Senate Bill 100. We have made great strides in this direction already, but California now faces the most complex challenges to date. In particular, we need to consider how to achieve even more ambitious goals in a cost-efficient and reliable way. That means enhanced resource diversity, greater attention to reliability year-round and not just at summer peak, and a sharper focus on providing the right incentives for new technologies.

All of these issues are on the ISO’s agenda for 2022, and we are committed to achieving our goals. It is going to be a busy year, but an exciting one. Thank you for taking the time to read about my perspective as we continue this crucial and gratifying work.

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