With help from Alex Nieves and Saqib Rahim
Big changes are coming in the California energy world. | Mark J. Terrill/AP
GRID BIDS: Gov. Gavin Newsom just opened the door to revolutionizing California’s energy markets. Elliot Mainzer is trying to make that dream a reality.
Mainzer is the president of the California Independent System Operator, the heavily-regulated nonprofit that manages the flow of the state’s electricity across long-distance power lines and operates the wholesale energy market, where electricity producers can sell their energy to utilities looking to satisfy customer demand. AB 825, a centerpiece of Newsom’s big energy deal, will allow CAISO to participate in energy markets governed by an independent regional organization. That’s a key step toward forming a new interstate energy market across the West.
The bill gained widespread support, with state leaders promising that it will lead to massive savings for utility customers. But the passage of AB 825 was just the first step.
Now, Mainzer and his team have to help stand up a multistate governing body to oversee this new market, not to mention actually building the complex market structure itself.
We caught up with Mainzer to ask about his plans for tackling the task before him.
This interview has been edited for length and clarity.
Elliot Mainzer is the president of CAISO. | Courtesy of CAISO
This bill was pitched as a major money saver for rate payers. Why will participating in a larger regional market help?
Let’s just take the situation on a really, really hot day in California. On a day when the demand is really high in California, and we’re facing the prospect of having to use our more expensive power plants to be able to keep the lights on, if there’s surplus, lower cost capability from other regions that we can import into the state, that just saves money right there in terms of total production costs. And those costs go right back to electricity consumers.
California already has the regional real time Western Energy Imbalance Market. Why create this new day-ahead market?
The WEIM deals with a relatively small number of energy transactions compared to the total amount of energy that’s consumed on a day to day basis. The real time market, the WEIM, really only looks out the next five, 10, 15, minutes. Most of the major decisions about resources are made the day ahead.
Every morning, across the course of the day, the utilities look into the next day and they say, “Gee, what’s my load forecast? How many of my power plants are going to be available? Where are my outages going to be? How much transmission is available?” And they set up their system on a day-ahead basis to figure out how the majority of their fleet is going to be operated.
So a few years ago, we started developing the extended day-ahead market, which would build on the footprint and the basic architecture of WEIM, but open that optimization up into the day ahead time frame.
What’s next for CAISO? What do you have to do?
We are very focused on the implementation of the extended day-ahead market and continuing to bring new participants on board. So we have targeted May 1 of next year to onboard PacifiCorp. And then in the fall of 2026 we’ve got Portland General coming online. We have several other entities scheduled for 2027 and 2028, and we’re also awaiting decisions from several other key players here, likely in the next few months, about their intent to join the market as well.
Just a few weeks ago, we received an extraordinarily important ruling from the Federal Energy Regulatory Commission. FERC approved the tariff filings by both Portland General and PacifiCorp to join the EDAM.
You mentioned that you’re waiting on some decisions from some key players. Who are you waiting on?
We’re waiting for decisions from NV Energy, obviously. They’ve signaled their intent to join the extended day-ahead market. Idaho Power, we’re waiting for their final actions. There’s some work amongst some of the public power customers in the desert Southwest, and there are a few other entities in the Northwest that we’ll be watching very carefully.
Why is it important to have as many organizations as possible in the EDAM? How large do you want to grow the market’s footprint?
You want to have a grid that’s bigger than the weather. You want to be able to know that even if it gets really hot in California or in the Pacific Northwest or in the desert Southwest, or super cold in the intermountain West in January, that you have enough geographical diversity and electrical connectivity to be able to move surplus power around to those entities that might be in short term deficits.
We’re very fortunate that the EIM has that footprint. It covers 22 entities across 11 states. In a perfect world, we’d like to see as many of the entities that participate in EIM also participate in EDAM. — NB
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Keep it cloudy, California politics. | Damian Dovarganes/AP
CLOUD POLITICS: Climate scientists hope California can come to the rescue for geoengineering research that has become politically polarizing across the country.
Groups like the Chesapeake Climate Action Network and Renaissance Philanthropy pushed state air regulators at a Thursday meeting to include the emerging field — which aims to reduce global temperatures by altering cloud patterns or using aerosols to block solar radiation — among California’s research priorities.
The ask comes after some red states, like Florida and Tennessee, banned weather modification, and with Rep. Marjorie Taylor Greene (R-Ga.) — who has erroneously suggested that geoengineering was responsible for the deadly July flooding in Texas — carrying a bill to ban research nationwide.
Even in California, geoengineering science has suffered from poor public relations, after University of Washington researchers failed to notify local officials last year that they were conducting a cloud-altering experiment in Alameda. But California Air Resources Board officials said the burgeoning field is one they’re interested in.
“That is an area where I think there’s a lot of interest. It is emerging,” said Rajinder Sahota, CARB’s deputy executive officer for climate change and research. “There’s a lot of misinformation, and so as these things come up, we’ll be taking a more detailed view as to how we can help.” — AN
Insurers are doing alright despite disasters. | Jae C. Hong/AP
INSURING PROFIT: U.S. insurance companies have raised rates enough to start turning a profit again and to ease off increases in coming years, according to credit rating agency AM Best.
New research published Thursday found that companies like State Farm and Liberty Mutual collectively had a $26 billion profit in 2024 after losing $10.8 billion in 2023, largely because they hiked premiums in recent years as extreme weather events, inflation and other factors increased costs, Saqib Rahim reports for POLITICO’s E&E News.
“Rates are much more adequate today compared to several years back,” AM Best wrote, predicting that “premium growth will moderate over the next few years.”
California Insurance Commissioner Ricardo Lara has rolled out regulations to encourage insurers to expand coverage in the state, saying last week that the rules have prompted five major insurers to expand or resume writing new policies, though State Farm was not among them.
State Farm, the state’s largest home insurer, approved a temporary 17 percent rate hike in June following the January wildfires in the Los Angeles area. State Farm has pulled back from insuring property in California in recent years following a string of major natural disasters. — SR, AN
NEW START: CALSTART President and CEO John Boesel will retire by the end of the year after more than two decades leading the influential clean transportation group. Boesel joined the Pasadena-based nonprofit in 1993 and took over leadership in 2001 when CALSTART had 15 staff members. The organization now has over 200 staff nationwide and manages vehicle incentive programs in multiple states, like California’s Clean Truck and Bus Voucher Incentive Project. — AN
— A group of Stanford researchers dug deep into what it will take for California to meet its net-zero emissions goal by 2045.
— Get ready for your cheap October electric bill, thanks to the California Climate Credit.
— California lawmakers have little to show for their beginning-of-session signals that they were going to get tough on data centers.
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