On December 14, 2011, FERC approved a transition agreement between the California Independent System Operator Corporation (“CAISO”) and Valley Electric Association, Inc. (“Valley Electric”), a Nevada electric cooperative. The transition agreement will allow for Valley Electric to transition into CAISO’s balancing authority area. Valley Electric will be the first CAISO participating transmission owner, utility distribution company, and load-serving entity located primarily outside of California.
FERC approved the transition agreement with an effective date of December 15, 2011. The transition agreement contains a provision where Valley Electric’s customers can apply to CAISO under a “special” interconnection request in order to be included in an earlier study. Otherwise, those customers would have to apply to CAISO to directly interconnect to the CAISO-controlled grid through the construction of a generator tie-line, and in that scenario, the customers would not be able to be studied until later in the year, delaying the transition. The transition agreement also allows for joint transmission planning, and once Valley Electric is a load-serving entity, it will be subject to CAISO’s tariff adequacy requirements. Valley Electric will also then be entitled to an allocation of congestion revenue rights.
At the Commission’s monthly meeting on December 15, 2011, Chairman Wellinghoff expressed support for Valley Electric joining CAISO. Both parties hope to make the transition effective January 13, 2013, and in order to meet this deadline, CAISO and Valley Electric have stated their transition process must begin in the first quarter of 2012.
A copy of the FERC order is available here.