Western Energy Markets Governing Body Preserves Key Reliability Feature in First Vote Under New Independent Governance

The Western Energy Markets Governing Body on July 23 has taken a significant step under the California Independent System Operator’s new independent governance framework by voting to preserve a key grid reliability tool, Assistance Energy Transfers, or AET, within the Western Energy Imbalance Market. The mechanism, introduced in 2023, allows balancing authorities to receive emergency energy transfers even when standard market rules would typically prohibit such exchanges. Originally designed with a sunset clause set for the end of 2025, the AET feature has now been approved for permanent use, pending the Federal Energy Regulatory Commission’s authorization.

The AET tool has proven critical for ensuring grid stability during periods of resource scarcity, and its continued use received widespread support from stakeholders. According to Dede Subakti, vice president for System Operations at the California ISO, the mechanism has been instrumental during stressed grid conditions. Stakeholders like Idaho Power emphasized AET’s role in easing operational complexities during tight supply periods and welcomed its permanence.

Alongside the AET decision, the Governing Body approved a refinement to the surcharge policy: market participants receiving coordinated energy transfers during reliability events will no longer incur penalties. This change further incentivizes collaboration during emergencies and was broadly supported during the spring stakeholder consultation.

The July 23 meeting marked the first under the new structure developed through the West-wide Governance Pathways Initiative. This structure grants the WEM Governing Body primary decision-making power, with the California ISO Board of Governors relegated to consent authority. The governance shift was triggered when the Public Service Company of New Mexico formally joined the ISO’s Extended Day-Ahead Market initiative, slated for 2027.

Looking ahead, a second phase of the governance plan could establish an independent regional market operator. Supporting legislation, Senate Bill 540, currently under review in the California Legislature, would empower the ISO to facilitate this transition while safeguarding California’s regulatory oversight.