Pathways implementation team updates and next steps
As the markets and services offered by the ISO continue to expand, our commitment to evolving governance in partnership with regional stakeholders has never been stronger. Over the past couple of years, two major developments have shaped this evolution: the West-wide Governance Pathways Initiative’s development of its Step 2 proposal and the passage of California Assembly Bill (AB) 825. Together, they represent a pivotal shift toward more independent, regionally responsive governance for Western market participants.
The Step 2 proposal recommended a collaborative, stakeholder-driven framework to create a governance structure that better reflects the needs of a growing, multi‑state market footprint. The passage of AB 825 enables the ISO to transition the governance of the Western Energy Imbalance Market (WEIM) and the Extended Day-Ahead Market (EDAM) to the newly formed Regional Organization for Western Energy (ROWE).
This transition is a major undertaking, and success will require close coordination with our partners across the West.
To lead this work, the ISO established an internal Pathways Implementation team – led by Adam Schultz, Director, Pathways Implementation, with executive sponsorship from Stacey Crowley, Vice President, External Affairs. The team brings together senior ISO staff working across six key work streams: legal, finance, regulatory engagement, organizational and business process change, legislative compliance, and stakeholder process.
Many of the requirements in AB 825 – and the broader Pathways implementation effort – will involve opportunities for public engagement. AB 825 establishes a detailed set of criteria that the new independent governing organization, the ROWE, must meet before governance of the WEIM and EDAM can transfer. These requirements include demonstrating independence, meeting representation standards, and establishing transparent and accountable governance processes.
Before governance can transfer, AB 825 requires the ISO Board of Governors to determine that the ROWE meets all statutory requirements for an independent governing organization. The Board must make these findings publicly before any transfer can occur, and the transfer can occur no sooner than January 1, 2028. In addition, the California Public Utilities Commission must make the same determination before California’s jurisdictional utilities may participate in a market governed by the ROWE.
To support these determinations, the ISO will conduct public processes, including opportunities for stakeholder input on:
- The AB 825 Jobs Study, which will assess impacts of AB 825 on California jobs
- The ISO Board’s consideration of ROWE certification, including public meetings and comment opportunities
- ISO tariff changes needed to implement AB 825 and Pathways Step 2
- Development of a bilateral agreement outlining the roles and responsibilities between the ISO and the ROWE
To help stakeholders stay current, we have created an information hub on WesternEnergyMarkets.com under the “Pathways” tab. This page includes information on the ISO’s Pathways implementation efforts, annual reports, and background materials on the Pathways Initiative and AB 825.
For more information on the ISO’s Pathways Implementation activities, contact Adam Schultz at aschultz@caiso.com.
