California power grid OKs mutual sharing of energy with other states

Fri Nov 8, 2013 11:18am EST

Nov 8 (Reuters) - California's power grid operator approved a new market design that will increase reliability and reduce costs by integrating generation resources from utilities outside the state to help balance the growing use of intermittent renewable resources.

Nevada power company NV Energy Inc said in a release Thursday it plans to seek permission from Nevada regulators to join California's new "energy imbalance market" after completing studies on the benefits of the new market.

The California Independent System Operator, which operates the power grid for much of the state, said the energy imbalance market, which its board of governors approved on Thursday, will allow power companies, known as balancing authorities, from across the West to participate in its real-time energy markets.

PacifiCorp, a unit of U.S. conglomerate Berkshire Hathaway Inc's MidAmerican Energy Holdings unit, was the first company to partner with the California ISO on the energy imbalance market.

MidAmerican Energy is also in the process of buying NV Energy and hopes to complete the deal in the first quarter of 2014.

PacifiCorp has been working with the ISO to implement the new market, which is expected to go live on Oct. 1, 2014, the ISO said.

PacifiCorp controls two balancing authorities serving more than 1.8 million customers in parts of six states. The company operates as Pacific Power in Oregon, Washington and Northern California, and as Rocky Mountain Power in Utah, Wyoming and Idaho.

The ISO said the new market will match energy needs with the lowest cost resources in all participants' service areas, which is expected to reduce costs while increasing reliability.

Moreover, by having PacifiCorp and possibly NV Energy join the energy imbalance market, the California ISO said all of the companies will have access to all of their generation to help keep their grids in balance as the number of intermittent renewable resources like wind and solar power increase.

Without an energy imbalance market, the ISO said operators generally must rely on generation assets within their service area for any last minute balancing.

The biggest power companies participating in the California electric market include units of Edison International, PG&E Corp, Sempra Energy, NRG Energy Inc , Dynegy Inc and AES Corp.

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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