OREANDA-NEWS. Integration of PacifiCorp's transmission network into the California Independent System Operator (ISO) grid could help better manage the growing oversupply of renewable generation in the west and set the stage for an expanded regional marketplace, ISO president Steve Berberich says.

PacifiCorp, a unit of Berkshire Hathaway Energy, wants to explore full participation in the California ISO to better understand costs and benefits of a day-ahead market, shared reserve resources and regional transmission coordination.

The Portland-based company that serves 1.8mn customers in California and five other western states and controls a 16,300-mile (26,243km) transmission grid said a feasibility study on full ISO participation will be completed this summer. If PacifiCorp proceeds to join the ISO, the transition could occur in 2017.

With the visibility of a day-ahead market and coordinated use of the high-voltage network, Berberich envisions PacifiCorp facilities sending solar, wind or hydro power to the west early in the day as California demand climbs. Later in the day, when California renewable output exceeds demand, electricity could travel east to reduce PacifiCorp's reliance on its 7,000MW coal fleet, helping western states meet pending federal carbon regulation.

Berberich told Argus in an interview that the PacifiCorp study will look at whether new transmission will be needed to take advantage of economic opportunities in a larger market footprint as California could eventually work to meet a 50pc renewable target.

PacifiCorp's potential integration could prove crucial to managing renewable energy output, California Energy Commission chair Robert Weisenmiller said.

California's higher transmission access charge will need to be reconciled if PacifiCorp moves forward.

"California utilities will not want PacifiCorp to get a free ride and PacifiCorp will not want to join if they have to pick up tens of millions of dollars of transmission-cost allocation," Berberich said. "We must sort that out."

Berberich will be keeping an eye on the future as the ISO looks to resolve that issue, saying "we will try to come up with a durable mechanism in case others want to join."

PacifiCorp's announcement surprised some western power market players, but not Berberich.

Berkshire Hathaway's Iowa-based MidAmerican Energy operates in the Midcontinent Independent System Operator region, "so this is not a foreign concept for them," Berberich said.

PacifiCorp's initial savings in California's six-month old energy imbalance market showed it the value of five-minute dispatch, he said.

"They rapidly came to the conclusion 'if I can get this much value from a five-minute market, how much could they get from a whole suite of products,'" Berberich said.

The California ISO covers 80pc of that state and a tiny sliver of Nevada. The ISO functions like a regional grid operator so joining it makes sense, Berberich said. Recreating such market infrastructure "is not for the faint of heart and not cheap."

Should PacifiCorp decide to join the ISO, however, governance and cost-allocation will be significant hurdles to overcome, Berberich said.

PacifiCorp operates in Oregon, Washington, Utah, Wyoming and Idaho. State commissions traditionally are loathe to give up jurisdiction over utilities.

"Our board understands that issue and is willing to work at it," Berberich said.