The West’s power grid could be stitched together — if red and blue states buy in – Twin Cities

By Alex Brown, Stateline.org

For years, Western leaders have debated the creation of a regional energy market: a coordinated grid to pool solar power in Arizona, wind in Wyoming, hydro in Washington and battery storage in California.

The shared resources would meet the demands of 11 different states, bolstering utilities’ local power plants with surplus energy from across the region.

With the passage of a landmark new law in California, that market is finally on its way to becoming a reality. Proponents say it has the potential to lower energy costs, make the grid more resilient and speed up the deployment of clean energy.

But the market’s success, experts agree, depends heavily on which states and utilities decide to opt in. As energy issues have become increasingly politicized, it’s uncertain whether Western leaders can buy into a common vision for meeting the region’s power needs.

“As we move toward weather-dependent renewables to run our grid, we’ve got to have a grid that is bigger than a weather pattern,” said California Assemblymember Cottie Petrie-Norris, a Democrat who sponsored the legislation aimed at establishing the new market. “A Western energy market is critical.”

The California measure earned bipartisan support, and leaders in conservative and liberal states alike have long touted the benefits of a region-wide market.

But some skeptics worry about merging the power systems of states with varying climate goals. And some fear the new market could give federal regulators appointed by President Donald Trump an opening to interfere and mandate more fossil fuel-powered plants that can be turned on regardless of the weather.

A bigger market

Across the 11 Western states that straddle or sit west of the Rocky Mountains, 37 separate private and public utilities operate portions of the grid.

This fragmented structure differs from the grid systems in Eastern and Midwestern states, where regional transmission organizations, or RTOs, coordinate and plan for energy needs across vast swaths of the country.

Backers of a Western market argue that a region-wide approach would be much more efficient.

Under the current system, each utility is required by state public utility commissions to build enough power to meet peak energy demands. That could mean building gas plants that only turn on a few times a year during extreme heat waves.

As part of a West-wide market, utilities could manage those high-demand events by importing power from other parts of the region that are generating surplus electricity. Such agreements could also prevent the periodic shutdowns of wind and solar farms when they produce more energy than local utilities can use.

“We could be drawing on the solar resources from the Southwest during the day, and then in the evening the wind resources in Montana and Wyoming are a great benefit,” said Austin Scharff, senior energy policy specialist with the Washington State Department of Commerce. “We have a lot of hydro resources, and we can help make sure the regional grid stays balanced when those are needed.”

Some industry leaders say such trading would allow states to pull in cheap electricity from elsewhere, rather than building expensive new power plants.

“When you have this bigger market, not everybody has to build to their peak in the same way,” said Leah Rubin Shen, managing director with Advanced Energy United, an industry group focused on energy and transportation. “Everybody’s able to share.”

Western states do trade electricity on a bilateral basis between individual utilities. Utilities spanning much of the West also transact through a real-time market that allows them to address pressing short-term demand issues. Some are poised to join a new day-ahead market that will conduct planning based on daily demand and production forecasts.

But some lawmakers and officials believe the region needs a larger vision that goes beyond moment-by-moment needs, a market that can plan interstate transmission lines and energy projects to serve the whole region in the decades to come.

“We’re facing really rapidly growing energy demand,” said Nevada Assemblymember Howard Watts, a Democrat. “The best way for us to meet that is to effectively move energy all across the Western U.S. The only way we can do that is through an RTO.”

Watts sponsored a bill, enacted in 2021, that requires Nevada to join an RTO by 2030. Colorado also passed a law that year with a 2030 deadline for utilities to join an RTO.

“Any future is better than our status quo, which is 37 separate grids in the West,” said Chris Hansen, a former Democratic senator who sponsored the Colorado legislation. “We can lower costs and provide greater reliability if we’re sharing resources.”

Hansen now serves as CEO of La Plata Electric Association, an electric cooperative in southwestern Colorado.