Energy Imbalance Market (EIM)

In 2014, CAISO launched an "energy imbalance market." The program allows out-of-state utilities to participate in California's real-time market, where utilities can buy electricity in five- or 15-minute increments to fill in last-minute gaps between supply and demand. So far seven utilities, serving 7.2 million customers across eight western states, have joined or are in the process of joining.

California has hailed the imbalance market as a success. CAISO's most recent quarterly report shows the program saved its participants $142.62 million over its first two-plus years of operation, with the benefits growing as more utilities joined. (California has accrued nearly 30 percent of those savings; about 55 percent have gone to Buffett's PacifiCorp.) By allowing solar farms to operate more than they otherwise would have, the program has averted nearly 154,000 metric tons of carbon dioxide emissions, CAISO says — equivalent to taking 32,000 cars off the road for a year.

PacifiCorp was the first utility to sign up. (The utility operates as Rocky Mountain Power in Idaho, Utah and Wyoming, and as Pacific Power in California, Oregon and Washington.)

PacifiCorp has since been joined in the imbalance market by NV Energy (also owned by Buffett), Arizona Public Service and Puget Sound Energy. Idaho Power, Portland General Electric and Seattle City Light have agreed to join, and the Sacramento Municipal Utility District is moving in that direction. Mexico's grid operator, the Comisión Federal de Electricidad, is exploring whether its Baja California Norte region should join, too.

The western United States is divided into 35 "balancing authorities" — independent electric grid operators that are responsible for balancing supply and demand on their own systems, with limited help from the surrounding systems. The California Independent System Operator (CAISO) is by far the largest balancing authority in the West, but it doesn’t even cover all of California; the Imperial Irrigation District (IID) and the Los Angeles Department of Water and Power, for instance, run their own grids. 

California utilities are required by law to get 50 percent of their electricity from renewable sources by 2030, part of the state's aggressive plan to slash planet-warming carbon emissions 40 percent below 1990 levels by that year. In 2016, 27 percent of the Golden State's electricity came from renewables, according to preliminary estimates from the California Energy Commission.

As part of the day-ahead market, CAISO decides every morning which power plants will and won't be turned on the next day, based on factors like expected demand, operating cost and environmental impacts. While there's room for adjustments during the day — that's where the real-time market comes into play — many fossil fuel plants need to be committed in advance.

Right now, those day-ahead commitments are made independently in each of the 35 western balancing authorities. Every day, utilities across the West are firing up climate-polluting coal or natural gas plants even when cheaper, cleaner resources might be available elsewhere in the region, like excess solar generation in California or untapped wind in Wyoming.

Brown knows the other states won't join CAISO if it's still controlled entirely by the California governor and Legislature. So for the last year, CAISO has been developing a new governance structure, with input from governor's offices, public and investor-owned utilities, consumer advocates, energy companies, unions, environmentalists and other stakeholders across the six states.

The most contentious issue, by far: how much power California would have. (The Desert Sun, 2/1/2017)