Inside CAISO’s Expansion: President Mainzer on Markets, Governance, and the Western Grid
In this conversation with VX News, Elliot Mainzer, President and Chief Executive Officer (CEO) of the California Independent System Operator (CAISO), discusses efforts to build a more integrated Western power system through the Western Energy Imbalance Market (WEIM) and the forthcoming Extended Day-Ahead Market (EDAM). By leveraging regional connectivity and resource diversity, the model is improving reliability and lowering costs while preserving state-level control.
Amid growing pressure from load growth, extreme weather, and transmission constraints, Mainzer outlines how CAISO is reforming interconnection processes and advancing new governance frameworks to support a more coordinated grid and sustain a reliable, investable energy environment in California.
“Today, we not only perform our original functions within California, but we also act as a broader market operator and reliability coordinator across the West.” — Elliot Mainzer (President and CEO, CAISO)
Elliot, given your 25-year career in the energy industry, introduce yourself as President and CEO of the California Independent System Operator (CAISO) and share about your professional background.
Thank you for the opportunity to be here. I’ve been working in the energy industry for about 25 years, and entered the sector during the early experimentation with energy deregulation in the late 1990s. I graduated from the Yale School of Management and the School of Forestry & Environmental Studies in 1998 and went straight to work at Enron, thinking that would be my ticket to greatness.
It didn’t quite end that way, but it was a valuable introduction to energy markets.
That experience sparked my interest in the transmission grid, renewable energy, and the broader clean energy transition. After Enron, I moved to the Bonneville Power Administration, where I spent 18 years in a variety of roles; ranging from power marketing and energy trading to transmission development, fish and wildlife programs, energy efficiency, and climate initiatives.
During that time, I began working closely with the California Independent System Operator on the development of the Western Energy Imbalance Market (WEIM), which gave me a front-row seat to its evolution.
Then in 2020, after serving as Administrator of Bonneville for about 7 years, I returned to my home state [California] to lead CAISO. I’ve presently been in the role of President and CEO for about five and a half years now and have enjoyed every minute of it, especially as we approach the launch of the Extended Day-Ahead Market (EDAM).
It’s a very dynamic and exciting time in the industry.
Could you explain CAISO’s core functions and perhaps, elaborate on how your role has expanded as the organization’s responsibilities have evolved?
Certainly, and for background, CAISO was first established in the mid-to-late 1990s as an independent system operator (ISO) for most of California. Our core responsibilities are to maintain grid reliability, operate the transmission system, and run the energy market for about 80% of the State. We also serve as the balancing authority and are responsible for transmission planning within our footprint.
I’d say that over the past decade or so, our role has expanded significantly.
After building out in-state energy market infrastructure, we began extending our real-time market to entities outside California around 2013 through 2014, which led to the creation of the Western Energy Imbalance Market, now covering about 80% of the electricity load across the Western United States and includes participation from 12 states.
Today, we not only perform our original functions within California, but we also act as a broader market operator and reliability coordinator across the West. We take both responsibilities very seriously and aim to deliver them with a high level of integrity and professionalism.
Given the evolving energy landscape in the West, have recent federal headwinds impacted CAISO’s responsibilities? If so, how has that affected regulatory commitments and coordination across California’s broader energy ecosystem?
I think certainly California, for many years, has been out on the vanguard of clean energy and renewables, and has very ambitious clean energy targets. I don’t think any of those fundamental commitments have changed, and I think the state continues to focus on its broad and ambitious clean energy goals.
What we’ve seen is some friction in the system, particularly around permitting and siting for renewables. There have also been some impacts on the potential trajectory of offshore wind. But I think, at least right now, that’s translating more into uncertainty as opposed to any fundamental change in direction. I think the state is navigating that.
More broadly, across the West, the federal government has placed a heightened emphasis on reliability and affordability for consumers, priorities that span the entire region.
In that context, the development of the WEIM, and now the Extended Day-Ahead Market, has been closely aligned with those broader federal goals. Both are clearly oriented toward supporting grid reliability and resilience by leveraging transmission connectivity and resource diversity across a wide footprint while also helping to bend the cost curve.
Certainly, that’s been supported by other states. With PacifiCorp going live as our first participant in the Extended Day-Ahead Market beginning May 1, we’re bringing in six very diverse states, all of whom share that same fundamental commitment around reliability and affordability.
There’s also a growing recognition that by leveraging resource diversity, we can continue to support each other, both economically and in terms of sustainability. For CAISO, it’s all been working out quite well, and we’ll see where things go, but it’s full steam ahead in regards to market expansion and resource adequacy.
Given the time and complexity involved in expanding this authority across the Western region, what are the key challenges you and your Board continue to face?
I think all of us right now, certainly in California and across the West, are focused first and foremost on resource adequacy, particularly given load growth driven by data centers, electrification, and manufacturing. Ensuring that we have enough generating resources and load flexibility to keep the lights on is critical, especially as we’re seeing more frequent and extreme weather events. Resource adequacy has really become imperative, and I think we’re seeing a lot of good work on that front.
At the same time, and generally speaking, we’re fortunate that we’ve been operating the WEIM for over 12 years, and we’re quite comfortable with the underlying technology. Given its programming, user interfaces, and information exchange capabilities, we’ve been able to leverage that platform into the Extended Day-Ahead Market, working with many of the same vendors and processes.
That said, EDAM introduces new features. It’s more data-intensive, provides greater visibility into next-day operations, and requires a higher level of information transfer and participation.
The biggest challenge, however, has been governance. I tend to think about these markets in terms of three elements: physics, economics, and governance. The physics and economics of our service area, both transmission-connected and with a resource-diverse footprint, has always been strong. But governance has been a more complex issue.
The California ISO was originally created by state statute, with a Board of Governors appointed by the Governor and ratified by the State Senate. That structure has raised concerns among other market participants about whether they would receive truly independent and equitable treatment in a market governed by a California-centered entity.
Over the past 12 years, alongside the development of WEIM and now EDAM, we’ve also been evolving the governance framework. This began with the creation of the Western Energy Markets Governing Body; an independent group of five members from outside California, which was gradually given greater authority. But as EDAM developed, and as competing market structures emerged, it became clear that governance needed to evolve further, ultimately requiring changes to California law.
In response, regulators across the West came together through the Pathways Initiative to put these markets on a trajectory toward fully independent governance. It started out with an initial step that said, “Let’s provide the Western Energy Markets Governing Body with as much authority as we possibly can, consistent with existing state statute.”
The initial step was to grant the governing body as much authority as possible under existing state statute, and the next step was to go back to the California Legislature and secure a change in law that would allow CAISO and its embedded utilities to participate in a market governed by a truly independent Western board and organization.
Ultimately, a broad coalition of Western stakeholders came together to support that effort. Last year, the California Legislature passed, and Governor Newsom signed, Assembly Bill 825 (AB 825), which puts us on a pathway to operate these energy markets under fully independent governance through a new Western regional organization, as early as January 2028.
What that means is that, for the first time, you have a wide-area, transmission-connected, resource-diverse energy market across both real-time and day-ahead operations, with strong underlying physics and economics, and a clear path to independent governance. All three of those elements can now be addressed effectively.
As we continue to build out the market and demonstrate value for electricity customers, we expect to see even broader participation over time.
VX News has covered AB 825, but from CAISO’s vantage point, what does a more integrated Western grid actually mean for ratepayers and energy users?
Well, I’ll answer it two ways, because I think it’s important to see it through the lens of what’s in it for California, and also what’s in it for others, and why we’ve had so much interest in this market from other utilities in other states.
Certainly, when you’re able to optimize the dispatch of a set of diverse resources: hydro, wind, solar, batteries, natural gas—and are able to dispatch that fleet as efficiently as possible, you save consumers money because you’re driving for a least-cost dispatch. The WEIM has produced over eight and a quarter billion dollars of production cost benefits, and a significant fraction of has gone to California electricity ratepayers.
On those really hot, or really cold extreme weather days, the ability to import and export power between these systems to support reliability is priceless. It’s hard to put a number on that, and we’ve seen a number of occasions where the WEIM has really played a key role in helping keep the lights on. For California, both the reliability and the economic cost savings through lower production costs have translated directly into savings on their bills, at a time when there’s extreme concern about affordability.
The same is true for the other utilities that are planning to participate. For PacifiCorp, the focus has always been on cost savings for their customers, particularly at a time when there is significant pressure on rate structures. Portland General Electric is expected to join later this year, and Public Service Company of New Mexico and NV Energy have already been approved. Within California, utilities such as the Los Angeles Department of Water and Power (LADWP) and the Sacramento Municipal Utility District (SMUD) are also expected to participate, while other entities like Idaho Power are actively evaluating the market.
At its core, this comes down to delivering reliability and economic value for customers, while leveraging the benefits of a wide-area energy market.
The Pathways legislation was designed to support that outcome by enabling the broadest possible participation, while ensuring that governance is viewed as truly equitable. CAISO’s Board of Governors was originally established to provide independent oversight within California, and I think it has generally done a strong job of operating fairly and equitably.
However, stakeholders outside the state have made clear that they want governance that is demonstrably independent of any single state. And that’s a reasonable and valid concern.
We recognize that, we support it, and we’re prepared to evolve. Going forward, CAISO will continue to perform critical functions for California while also providing market operations and related services under a fully independent regional governance structure.
This is something the West has been working toward for many years, and we’re now on the cusp of making it a reality.
For a non-technical audience, how would you describe the trade-offs operators and policymakers are making to manage today’s grid challenges?
I’d preface by saying, it’s not often when you see such a clean path to not having such big trade-offs. But in this case, that’s really the opportunity.The truly beautiful thing about the WEIM and EDAM, and we’ve seen this played out with actual, direct experience, is that they operate across a very broad and diverse footprint. We’re talking about 11, soon to be 12 states, with very different policy goals, political environments, and energy strategies. And yet, each of those states has been able to maintain its sovereignty and self-determination.
You see that in California with SB 100 and SB 32, but it’s equally true in states like Oregon, Washington, Idaho, Utah, Montana, New Mexico, and Arizona. They continue to make their own decisions around integrated resource planning and resource choices at the local level. But at the same time, the market is able to optimize across that diversity by leveraging different resource profiles to deliver both reliability and cost savings. That’s really the core principle behind EDAM and the broader regional market: focusing on the physics and economics of the system, while respecting state-level policy decisions.
Now, the nice thing is that the market does create additional opportunities. It reveals where transmission expansion is needed, provides greater visibility into how resources are performing, and opens the door to voluntary collaboration and improved planning across the region.
At the same time, it fully respects state-level policy decision-making, which is foundational to the success of the model.
With the role of utility-scale battery storage continuing to evolve, are current regulatory incentives aligned to ensure resource adequacy and reliability, and are they achieving their intended goals?
Going back to the early part of the decade, California and much of the West began to fully recognize the importance of resource adequacy, especially during system-wide heat events. Those conditions made the “duck curve” very real: as solar generation declined in the evening, demand remained high, creating significant strain on the grid. At that moment, the advent and emergence of commercially viable lithium-ion batteries couldn’t have come at a better time.
The growth of battery storage over the past five years has been remarkable. We now have nearly 16,000 megawatts of four-hour lithium-ion batteries on the system, and they’ve fundamentally changed how the grid operates. They’re able to absorb excess solar generation during the middle of the day and then discharge that energy in the evening, when it’s most needed. They’ve also played a role in providing ancillary services like frequency regulation, although that market has quickly saturated.
Today, their primary function is shifting energy from midday into the evening, essentially performing energy arbitrage, and they’ve become an indispensable tool for maintaining reliability, particularly during the summer peak season.
When batteries first came onto the system around 2020, grid operators were understandably cautious. There were real questions: how would they perform, how quickly could they respond, and would they reliably have the necessary state of charge in the critical evening hours?
Because of that, there was initially a more command-and-control approach to how batteries were dispatched during those first couple of summers, but over time, we saw them respond rationally to market price signals. Charging during the day and showing up in the evening ready to perform, and also supporting the morning ramp. That gave us increasing confidence that the incentives in place are driving the kind of reliability and economic behavior we need.
There’s still room for refinement, and we’re continuing to improve how we model, dispatch, and operate these resources. For example, anyone with an electric vehicle knows, batteries don’t charge and discharge uniformly and their performance depends on where they are in the cycle.
We’re looking at how to better incorporate state-of-charge dynamics into market participation, including how those characteristics are reflected in bidding behavior. We’re also paying close attention to potential market power or manipulation risks.
Looking ahead, we expect further improvements in dispatch optimization over the next few years, along with the emergence of longer-duration storage, with 8-hour and 12-hour batteries, flow technologies, and even longer-duration solutions like 100-hour iron-air systems. We’ve made strong progress integrating battery storage into grid operations, but like any evolving technology, there will continue to be learning and refinement over time.
Connecting new generation to the grid remains a critical bottleneck in the energy transition. In light of reliability and resource compensation challenges, what opportunities exist to meaningfully accelerate the interconnection process?
First and foremost, onboarding new generation and ensuring there is sufficient transmission capacity and deliverability to meet load growth and resource planning needs, is one of CAISO’s most important responsibilities. We want to be an efficient gateway for bringing new resources online, and we’ve seen across the country that interconnection queues have become overwhelmed.
In recent years, they’ve been filled with hundreds of thousands of megawatts of proposed resources. At one point, our queue alone represented roughly three times the total amount of capacity we expected the state to need by 2045. That clearly requires a new paradigm.
When FERC introduced reforms through Order 2023, we saw them as helpful but not sufficient. We’ve long understood that transmission planning, resource planning, interconnection, and procurement are all interconnected processes. They need to be synchronized, and transmission development takes significant time, so it has to lead the process. You can’t build transmission reactively based on queue demand; the queue needs to align with transmission planning.
That’s why we entered into a memorandum of understanding with the California Public Utilities Commission and the California Energy Commission: to better coordinate resource planning, transmission planning, interconnection queuing, and procurement. We then reformed our interconnection queue process alongside a major buildout of the transmission system. We’ve approved more than $20 billion in new transmission investments in recent years, with significant expansion underway both within California and across interregional connections. As part of that effort, we effectively “zoned” the transmission system to better align project development with available and planned infrastructure.
For our upcoming clusters, we’ve prioritized projects located in areas with existing or planned transmission capacity, that require relatively modest additional upgrades to the grid, and have demonstrated interest from load-serving entities with resource adequacy obligations. Those are the projects that move forward in the study process.
We’ve also resized our cluster studies to better reflect actual demand over the next 5, 10, and 15 years, rather than the speculative volumes we were seeing previously. As a result, in our most recent cluster, we were able to significantly reduce the number of projects entering the study process while still maintaining a healthy supply of viable resources. That made a meaningful difference and removed a significant amount of friction from the system, but we still have a backlog of projects from earlier clusters, and we’re working to shift deliverability toward the most viable ones.
We also need to continue accelerating transmission development across California. As you know, that remains a long-lead process, so we’re working closely with utilities and policymakers to reduce delays wherever possible.
Ultimately, expanding transmission and substation infrastructure is what will unlock additional deliverability and allow us to continue bringing new resources online. This has been a major focus for our team over the past several years, and I think we’ve made transformational progress.
In closing, and as these discussions continue at the VerdeXchange Conference this May through June, what are the infrastructure and policy priorities needed to ensure California remains both investable and resilient over the next decade?
That’s a great question and I’ll preface my answer by noting how California is often criticized for having a significant amount of regulation and oversight in its energy sector, and that’s true. But it’s also been our strength. The state has brought over 30,000 megawatts of new resources online in the last five years, which is a substantial expansion of generation capacity.
A key reason for that progress is the clarity around roles and responsibilities for resource adequacy. The California Public Utilities Commission and other local regulatory authorities define integrated resource plans and long-term procurement objectives, providing clear guidance to load-serving entities.
In turn, this enables those entities to pursue long-term procurement strategies, supported by shorter-term compensation mechanisms for resource adequacy capacity.
Maintaining that clarity will remain critical. Not only for meeting the state’s long-term clean energy goals, but also for staying ahead of growing demand from large loads such as manufacturing and data centers, and doing so efficiently and equitably, in a way that ultimately lowers costs for electricity customers.
A second key priority surrounds the successful launching of our Extended Day-Ahead Market, building on the success of the WEIM, and establishing the Regional Organization for Western Energy. These are highly consequential developments for electricity consumers across California and the broader West.
Finally, we’re increasingly focused on leveraging advanced technologies to improve reliability and efficiency. This includes grid-enhancing technologies, such as advanced conductors and flow control devices, applications of artificial intelligence to support control center operators and transmission planners, as well as better integration of load flexibility into system dispatch, particularly during periods of grid stress.
As our system becomes more “peaky” and extreme weather events become more frequent, having the tools to efficiently reduce load during critical periods will be essential to both maintaining reliability and controlling costs.
Those are really the three areas that are top of mind for me.
