California grid operator touts new reliability service at half the cost of competitor
Peak Reliability says it is unfazed by the move, and will continue to help clients deal with stagnant load and growing renewables.
Reliability is paramount, but electric system operators still want a good deal. It appears there may be a reshuffling of reliability coordinators in the works — in part because of a unique funding mechanism and the economics of spreading out fixed costs.
The California ISO announced Jan. 2 it will soon act as its own reliability coordinator (RC), a responsibility currently handled by Peak Reliability. In addition, CAISO will offer reliability services to any transmission owner interested — at a fraction of the current cost, the operator is promising.
Peak and a subsidiary of PJM Interconnection announced last month they had signed “a formal agreement to explore reliability services and markets in the West.”
What’s going on here?
A couple of things to keep in mind. First, the California ISO has been working to expand its western market, a process known as regionalization that could save customers money and allow greater renewables integration. But it brings with it a host of operational concerns, including the fear that out-of-state coal generators could be allowed to export power to California. The process was delayed until this year, and now the Peak-PJM partnership could potentially be competing for some of the same customers.
Also, last fall the Mountain West Transmission Group began the process of joining the Southwest Power Pool (SPP), and ditching Peak as its reliability coordinator. The coalition of 10 electricity service providers (with about 6.4 million customers and 16,000 miles of transmission lines among them) says SPP membership would provide opportunities to reduce customer costs and maximize resource and electric grid utilization. Fewer customers means Peak’s fixed costs will need to be redistributed.
What’s happened is a series of dominoes.