On January 2, 2018, the California Independent System Operator (“CAISO”) announced plans to become its own reliability coordinator by spring 2019. The plan will require CAISO to withdraw from Peak Reliability, the current reliability coordinator for the Western Interconnection. Although the full suite of reliability services to be offered remains unclear, CAISO stated that it will offer outage coordination, day-ahead planning, and real-time monitoring reliability services.

As stated in the announcement, although CAISO has long supported having a single reliability coordinator in the Western interconnection, recent developments have prompted CAISO to reevaluate the apparent cost-effectiveness of this arrangement. First, in the fall of 2017, Mountain West Transmission Group announced plans to join the Southwest Power Pool, which, CAISO stated, would increase costs to the remaining participants served by Peak Reliability. Second and more recently, Peak Reliability and a subsidiary of PJM Interconnection LLC, PJM Connex, signed an agreement to explore the possibility of offering market services in the West. As a result, according to the announcement, CAISO reconsidered its own Peak Reliability membership and ultimately determined that it could provide reliability services to itself and other balancing authorities and transmission operators at “significantly reduced costs.”

CAISO is extending the required 18-month withdrawal period to 20 months “to ensure seamless coordination with Peak Reliability’s members on the transition.” During that period, CAISO will work with interested parties, the North American Electric Reliability Corporation (“NERC”), and the Western Electricity Coordinating Council (NERC’s compliance monitoring and enforcement authority in the West) to complete the necessary tariff changes and certification process before becoming an operational reliability coordinator in spring 2019.

In assuming a new reliability coordinator role, CAISO will be responsible for complying with reliability standards set by the NERC and for monitoring operational and security risks, and overseeing system reliability and restoration following major outage events.

A copy of CAISO’s announcement can be found here.