California state lawmakers on Sept. 13 approved a legislative package that includes the creation of an expanded Wildfire Fund and enabling the Pathways Initiative for a voluntary, west-wide regional electricity market.
The legislation was announced by California Gov. Gavin Newsom, Senate President pro Tempore Mike McGuire and Assembly Speaker Robert Rivas on Sept. 10.
AB 825, authored by Assemblymember Cottie Petrie-Norris, Senator Josh Becker, and Speaker Robert Rivas, “preserves California’s control over critical policy functions — including transmission planning and procurement — while unlocking the benefits of broader regional cooperation: greater grid reliability, reduced blackout risk, more affordable clean power, and lower emissions,” a news release from Becker’s office said.
Recent amendments to AB 825 “include rigorous annual legislative oversight by relevant California legislative policy committees to ensure the new market operates in line with California’s clean energy and reliability goals. The bill also provides strong protections for state authority, including California’s right to withdraw at any time if participation ceases to benefit the state,” the news release said.
“By enabling least-cost dispatch across a broader pool of Western resources, the Pathways Initiative is expected to save California ratepayers up to $10 billion over the next decade, according to analysis by the Brattle Group,” Becker’s office said. “California will also reduce the costs of maintaining a state-specific strategic reliability reserve by pooling resources with other participating areas.”
The California ISO said that the “bill establishes a clear path toward independent governance for the West's interconnected electric grid. This milestone was shaped by years of successful regional collaboration and the proven success of our Western Energy Imbalance Market (WEIM), which has delivered more than $7.41 billion in cumulative savings since launch in 2014,” it said.
As the Pathways Committee develops the framework for the new regional organization, “we will coordinate closely to ensure alignment with legislative requirements. We remain fully committed to the successful launch of our Extended Day-Ahead Market (EDAM) in 2026 and will offer technical support throughout this important transition,” the grid operator said.
Becker’s office said that key safeguards in AB 825 include:
• Maintaining California ISO’s role in planning for and operating California’s grid.
• Ensuring that governance of the new market respects state procurement, environmental, reliability, and other public policies.
• Providing the CPUC and other stakeholders with access to critical market data.
• Protecting California’s ability to withdraw from the regional market at any time.
Wildfire Funds (SB 254)
SB 254 (Becker/Petrie-Norris) "enables more affordable electric grid investments by improving utility wildfire oversight, creating an expanded Wildfire Fund and enhancing oversight of utility business practices," Becker's office said.
Other bills passed include:
AB 1207 and SB 840, which extend the state’s climate program, Cap-and-Invest, formerly known as Cap-and-Trade and SB 352, which expands local air pollution reduction efforts and oversight in California’s most polluted communities by extending air pollution monitoring periods and ensuring the state and local air quality improvement agencies are redoubling their efforts to deploy effective air pollution reduction strategies.
