IID apprehensive on proposed reliability coordinator change

LA QUINTA — Imperial Irrigation District board members failed to reach an agreement on the steps to take in determining who will be charged with overseeing the agency’s operation of its electric system.

During IID’s meeting on Tuesday, Manager of Energy Operations Tony Allegranza and outside regulatory federal electricity counsel Sean Neal, presented the board with a set of possible options to address the future of the district’s reliability coordinator.

A reliability coordinator has the highest level of authority for the reliable operation of the bulk electric system in a region. Its primary role is to prevent and mitigate emergency operating situations, and to safely restore power after an outage.

Currently, IID has an agreement with Peak Reliability, which covers a large portion of balancing authorities across the western United States.

Peak Reliability is currently planning to add on an organized market to its structure through an alliance with PJM Connext, which is an affiliate of an eastern regional transmission organization.

As a response, multiple entities, including CAISO, have expressed their intent to withdraw from their current agreements with Peak Reliability and, in the case of CAISO, intend to become the reliability coordinator for its own balancing authority and others.

“That leaves the existence and the continuing function of Peak Reliability in doubt,” Neal told the board. “All entities in the west are looking at options to decide what comes next for them.”

Staff recommended four actions to the board, which included submitting a revocable letter of intent to Peak Reliability to retain its services and concurrently do the same with CAISO and Southwest Power Pool in order to reserve their place in the queue and to give staff additional time to consider which option will be best for the IID and bring a formal proposal to be voted on at a later time.

As of today, the IID pays Peak Reliability $205,000 per year, but due to the projected loss of members at Peak Reliability, staff projected the IID’s financial responsibility will likely increase.

CAISO projects it could provide the service for approximately half of the current amount, while SPP has yet to provide the district an estimated cost.

However, just the notion of sending a letter of intent to CAISO didn’t sit well with the two longest-serving members of the board, in Division 2 Director Bruce Kuhn and Chairman Jim Hanks.

Both directors were concerned about engaging the CAISO due to current litigation between the two entities and the stark points of view both have on the western grid regionalization proposal, which CAISO supports. Hanks was concerned with CAISO having the ability to force IID to become a member in the future, while Kuhn said he was concerned with giving the illusion of being on the same side of CAISO, especially with the possibility of their involvement being characterized as support of the western grid regionalization slated to be part of this year’s legislative session.

Staff reassured the board the action being discussed Tuesday was only to initiate the process with multiple potential entities capable of providing the reliability coordinator service. Nevertheless, as part of the backup documentation, IID staff did identify some of the potential issues that may arise should CAISO take over this function.

“If CAISO becomes the reliability coordinator for IID, it can direct IID to take certain actions, including shedding of load to prevent or mitigate emergencies . ... (It) creates risks to the extent that CAISO directs that IID take action that may be as effectively undertaken by other entities. Similarly, CAISO may prioritize system restoration after an outage that places IID in a less favorable position,” the agenda backup document stated.

The board ultimately failed to approve sending the letters of intent after a 2-2 vote with Hanks and Kuhn voting against and directors Juanita Salas and Erick Ortega voting in favor. Division 5 Director Norma Sierra Galindo was not present at the meeting.

The item is expected to be brought back to the full board on March 19.