USA – CALIFORNIA Law and Practice Contributed by: Nora Sheriff, Gwenneth O’Hara, Samir Hafez, Antonio Carrejo and Elisa Rivas, Buchalter
ment include the Western Area Power Adminis- tration (WAPA) and the Balancing Authority of Northern California (BANC). WAPA markets and transmits wholesale hydro- electric power from federal water projects, pri- marily to rural electric co-operatives, municipal utilities and federal and state agencies in 15 western states, including California. BANC is a joint-powers agency that provides services similar to CAISO, but is limited to municipal utili- ties, irrigation districts and other public entities located in Northern California. Addressing High-Load Consumers (eg, Data Centres) High-load consumers such as data centres typi- cally procure electricity as customers of LSEs under regulated retail tariffs or specific agree- ments. These customers’ significant demand is factored into the LSEs’ load forecasting and RA obligations. As of early 2025, there has been increasing regulatory and legislative focus in California on developing specific rate structures, interconnection standards and energy efficiency requirements for data centres. These efforts are intended to ensure equitable cost allocation for grid upgrades, promote alignment with clean energy goals, and manage the data centres’ substantial and growing energy consumption. For example, SB 57 was introduced in 2025 and would require the CPUC to establish a spe- cial rate structure or tariff for data centres and other large energy consumers connecting at a transmission voltage of at least 50 kV. The bill is aimed at protecting ratepayers from poten- tial cost shifts resulting from increased energy demands associated with data centres. PG&E recently requested CPUC approval of a new Electric Rule 30. According to PG&E, this new tariff would streamline the interconnection pro-
cess for new data centres and other large new loads. 2.2 Electricity Imports and Exports California permits imports and exports of elec- tricity with neighbouring jurisdictions within the Western Interconnection, which encompasses 14 western US states, parts of Canada, and north- ern Baja California, Mexico. Import and export transactions are primarily managed by CAISO. In recent years, electricity imports have proven vital to maintaining California’s grid reliability and meeting its substantial energy demands, espe- cially as the state seeks to integrate more renew- able, intermittent power sources. The operational reliability and co-ordination of the Western Interconnection is overseen by the Western Electricity Coordinating Council (WECC), which is a FERC-designated regional entity. WECC is responsible for developing and enforcing the mandatory reliability standards governing the planning and operation of the bulk power system, including the interties used to facilitate California’s imports and exports. Major Transmission Interconnections California trades electricity with the Pacific Northwest (PNW) (Oregon, Washington, British Columbia) via the Pacific DC Intertie and the AC California-Oregon Intertie (COI/Path 66). Califor- nia trades electricity with the Desert Southwest (Arizona, Nevada) through numerous AC lines. Limited interconnections also exist with Baja California, Mexico. Reviews and Approvals Scheduling Imports and exports are scheduled through CAISO market mechanisms and must adhere to CAISO’s relevant tariff provisions and operating procedures.
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