EDF’s Michael Colvin on Clean Energy Strategy and the Future of the Western Grid
VX News interviewed Michael Colvin, Director of California Energy Program at Environmental Defense Fund (EDF), to elaborate on the impetus behind the West-Wide Governance Pathways Initiative and current status of SB 540, California’s latest legislative effort to implement a western regional day-ahead electricity market. Noting EDF’s reservations with the bill as currently amended, Colvin emphasizes the importance of ensuring independent governance to attract multi-state participation while maintaining California’s clean energy and emissions reduction priorities. Colvin also highlights EDF’s broader priorities on energy affordability, accelerated permitting, offshore wind, and hydrogen.
"The sticking point was governance. Other states didn’t want a California board appointed by California’s governor having an outsized influence on operations.” - Michael Colvin
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Michael, VerdeXchange has been covering the development of a Western Regional energy market for years, which was also the subject of a most recent VX2025 panel. Could you provide our readers with a brief overview of the Pathways Initiative and its importance to both California and EDF?
About two years ago, in July of 2023, regulators from across the West issued an open letter asking: How can we put the West on a path toward a Western Regional electricity market—one that includes all the Western states, including California? That foundational idea of identifying pathways towards a regional market became known as the Pathways Initiative.
This was a stakeholder-driven initiative. EDF served on a launch committee composed of representatives from throughout the West and in the electricity sector. We had participation from utilities, transmission owners, public power agencies, Community Choice Aggregators, independent power producers, consumer advocates, environmental groups, and technology providers—really, a broad spectrum of stakeholders. The goal was to get as many different voices as possible into the room.
Was labor not also involved from the beginning?
Yes, labor was involved from the very beginning. After about a year of discussions, the group formalized what we now call the Pathways Initiative. To explain why this initiative is necessary, let me provide some context.
For the past decade, California has operated a real-time electricity spot market known as the Western Energy Imbalance Market. This market was created under the statutory authority of CAISO, the California Independent System Operator. When CAISO was formed, the California Legislature directed it to "Administer the markets in the West," and it has done so under the oversight of its own Board of Governors.
The last time this idea of expanding the market to a longer time horizon was proposed in the past, the major objection wasn’t technical. It wasn’t about cost savings, reliability, or emissions reductions—those benefits were well-documented. The sticking point was governance. Other states didn’t want a California board appointed by California’s governor having an outsized influence on operations, so the innovation of the Pathways Initiative was to propose a new, independent regional organization—an "independent RO"—to run and administer the market.
This RO wouldn’t be beholden to any one state, including California. It would contract with CAISO under a "contract for services" model to run the market, leveraging the hundreds of millions of dollars already invested in CAISO’s infrastructure and expertise. This approach brought skeptical states back to the table.
It also addressed labor’s concerns about keeping CAISO’s footprint the same size while also having a new market opportunity to sell California’s renewable power, and it keeps the bucket system under the renewable portfolio standard intact, which solves for a big objection that organized labor had. So, when Senator Becker asked for legislative ideas, EDF, organized labor, and NRDC came together to co-sponsor what became Senate Bill 540.
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Elaborate on EDF’s current concerns with the bill, given that a coalition, including EDF, submitted a letter opposing the bill unless amended.
As SB 540 was moving off the Senate floor, an amendment was attached that created some provisions that gave a lot of people heartburn in terms of whether California would actually be independent of this new Regional Organization. It created both an Oversight Council, and some more minor language suggesting what the Regional Organization (RO) could or could not offer in terms of market services.
EDF’s position, and that of many others in the coalition, was that it’s absolutely valid for California to tell its load-serving entities what market services they can or cannot participate in, but it’s overstepping for California to dictate to the independent RO itself what services it can offer to other states. We did not California telling the independent RO what to do, just as we wouldn't want Nevada to tell it what to do.
We had no problem with California saying, “we don’t want you [CA load-serving entities] to join this type of market service.” The big concern was around the idea of a centralized capacity market—let’s speak very plainly about that. There was no concern about resolving that. When it looked like that clean-up language might not happen, a number of coalition groups decided to increase pressure on legislative leadership by stating: We won’t support this bill unless that provision is removed.
Why? Because no other state would want to join a regional market with those conditions attached, and we were trying to make the bill as clean as we could to represent the negotiations undertaken over the last year.
Could you share the essence—during the California Legislature’s deliberations—of the conversations with the other western states that are considering participation?
Honestly, the conversations have been extraordinarily productive. There's been a lot of trust-building and a clear focus on mutual benefits. This is a voluntary market—nobody is being forced to join—so the tone has been collaborative: “Here’s what we can do for you, and here’s what you can do for us.”
Everyone is thinking about how to optimize the dispatch of existing generation resources and how to add additional market services or even incentivize new generation resources over time. Importantly, the RO is required to respect state policies. So. Idaho cannot impose its policy on Arizona, and Oregon cannot be forced to play by Washington’s rules. If a state has a renewable portfolio standard or a climate goal or something else, that reigns supreme; those policies take precedence, and the RO must operate within that framework.
The concern that triggered the opposition letter was that these last-minute amendments which risked undermining that independence. If the RO was seen as beholden to California, other states wouldn’t join, and California would have spent all this effort launching a market that no one else would participate in.
Expand on Arizona, Oregon, and Colorado’s interests and priorities, regarding a Western Grid.
Every state has its own procurement processes and policy priorities—and that’s a good thing. That should continue. But let me step back briefly: California tried to create a regional grid approach a couple of years ago, but that effort failed. When it did, a second market run out of Arkansas—the Southwest Power Pool—stepped in and launched a day-ahead market called Markets+. Some of California’s existing trading partners in the Energy Imbalance Market are now switching over to Markets+ because it offers them more favorable terms.
For example, Bonneville Power Administration (BPA) is going that route. So is Colorado, where Xcel Energy and PSCo are considering the shift. Arizona is still on the fence, trying to decide what makes more sense. At the same time, other balancing authorities and utilities remain fully committed to the Pathways Initiative. They want to stay aligned with their existing trading footprint and continue down the pathway we’re on.
When we talk about “state dynamics,” it’s not just state vs. state. It’s market vs. market. The larger the market, the greater the overall benefits of cost savings, reliability, and emissions reductions that flow to everyone. Think of it as if you’re the only person in your network with a cell phone; it’s not very valuable, but if everyone has one and can share data and apps, the value skyrockets.
Our concern with the Senate’s amendment was that it jeopardized the size of the market. If fewer states want to join because California appears to be exerting too much control, then we end up with a smaller, less effective market—or worse, we push states toward a competitor like Markets+. That’s why EDF and others insisted on revisiting the language to protect the integrity and viability of the Pathways Initiative.
What’s the likelihood of success?
That’s a very valid question. You’ll note that recently, the Governor and the Assembly Speaker issued a joint statement declaring this a top priority. They committed publicly that a version of this bill will land on the Governor’s desk by the end of the session.
That level of public signaling, especially at this stage in the legislative process, is unusual. But it’s also a very clear commitment: California intends to get this done. I am confident that some version of this bill will reach the Governor’s desk, and as advocates, we’re working hard to ensure that it's the best possible version when it gets there.
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What is EDF’s position/take on the Abundance Agenda as it relates to CEQA?
I’ll preface by saying I’m not a CEQA expert. I know just enough to be dangerous. But my framing has always been: How do we get permitting done on an accelerated basis, not an expedited one? Accelerating means doing all the same steps—but faster. Expediting implies skipping steps, which we don’t support.
Take our advocacy around transmission permitting and siting reforms: it’s been about reducing duplication and compressing the review timeline, not bypassing CEQA. A great example is General Order 131-E, which we helped shape. It improved process efficiency, saved customers millions, and shaved off nearly a year of time, without eliminating a single requirement. That’s a big win.
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And EDF’s current take on offshore wind, especially in light of recent federal opposition?
It makes a ton of sense for California. Through the Bureau of Ocean Energy Management (BOEM), we’ve leased up to 10 GW of offshore wind potential, and of that, 7.6 GW could be picked up by a central procurement entity.
EDF is pushing hard to get the best possible deals through that entity. We’re also watching the federal timing closely. The BOEM lease process is unlikely to continue in this administration, but thankfully, we don’t need new leases before the next election. We’re working within the 10 GW already authorized and figuring out alternative procurement pathways for the remaining 2.4 GW.
We also just submitted comments on the California Public Utilities Commission’s proposal for a Reliable Clean Power Procurement Program (RCPP), using offshore wind as a prime case of the kind of clean power California should prioritize. A Western regional electricity market could be key here since California can’t absorb all the power alone. States like Oregon and Washington, which didn’t get BOEM lease sites before the federal shift, still want access, so offshore wind, as a dispatchable, firm clean resource, it checks a lot of boxes.
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Could you also share the range of interests and perhaps, priorities EDF is currently pursuing?
The number one focus for us this year is: How do we align affordability with environmental outcomes? That means anything we can do to reduce pressure on ratepayers—and I want to be clear: rates and bills are not the same thing—but anything that lowers customer bills and achieves an environmental goal is something we’re pursuing. That holds both in our legislative work and in our regulatory advocacy.
Our top priority on energy is the Western electricity market, hands down. Beyond that, we’re also deeply focused on how we buy and build major clean energy infrastructure quickly, especially before key federal tax credits begin to phase out. That includes transmission reforms to ensure we can move power where and when it’s needed.
We’ve been very involved in streamlining the permitting and siting processes for transmission, both through legislation and regulatory efforts. Our overarching strategy is: buy clean power, move it efficiently, and use a well-designed market to optimize it.
Another issue we’ll be heavily engaged in during the second half of the year is the cost of capital proceedings for California’s investor-owned utilities. This is essentially about how much shareholder profit utilities are allowed to earn. We believe that California ratepayers are currently paying a “California premium”—that is, we’re compensating utility shareholders at rates higher than what’s justified by the market or seen in other parts of the country. We want to bring California back in line with national norms, so customers aren't overpaying for shareholder returns.
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EDF’s website includes “helping to get hydrogen right.”
What’s been the impact of federal renewable policy rollbacks on that goal?
From our perspective, hydrogen infrastructure must be purpose-built and truly clean. EDF has been a strong supporter of dedicated clean hydrogen infrastructure and a strong opponent of non-dedicated or dirty hydrogen pathways.
Hydrogen is incredibly energy-intensive to produce, so if federal support for renewable energy is rolled back, it’ll be harder, but that doesn’t mean California should lower its standards. We won’t support switching to gray or blue hydrogen just because green hydrogen gets harder to develop. There’s also a safety and climate issue here: hydrogen is a tiny, slippery molecule. It can leak, and it contributes to warming at all levels of the atmosphere. If we use pipelines or infrastructure not designed for hydrogen, we risk major leakage, which would undo many of the claimed climate benefits.
Hydrogen should be reserved for hard-to-electrify sectors, like heavy industry or long-haul transport, not for uses where electrification is more efficient. Most people don’t care how their water heater or dryer works—they just want hot water and dry clothes. And electricity can do that better, faster, and cheaper. Hydrogen has a role, but it must be right-sized and focused where it makes the most impact.
Why separate hydrogen from electricity in your analysis?
Here’s a simple explanation: If I have one megawatt-hour of solar electricity, and I use it directly to power a heat pump or charge an EV—that’s very efficient. But if I take that same solar MWh, convert it to hydrogen, store it, and then use it to power the same appliance?
That might require 5 to 6 MWh of solar to do the same job. It’s just far less efficient. Unless hydrogen is necessary, direct electrification is almost always the better path.
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With all the recent fires and extreme climate events, especially those in the LA region, how willing is EDF to compromise “to get things done?”
About the fires, those in LA earlier this year were devastating. I have family and friends who were directly impacted. Driving through the aftermath was shocking; it looked like a bomb had gone off. It's heartbreaking that this can happen in one of the wealthiest economies in the world.
To me, this makes solving affordability issues even more urgent. If electric utility customers are expected to shoulder all the wildfire-related costs, we’ll make California unlivable. So, EDF’s near-term focus includes rebuilding smarter and more affordably, making sure new homes are “right-sized” for electric vehicles, heat pumps, and clean technologies, and keeping total energy burden manageable for customers.
We also recognize that wildfire costs are now the single largest driver of electric rates in California—more than clean energy mandates or infrastructure upgrades. We can’t allow these costs to derail the clean energy transition. So, we’re looking at supplemental funding sources—bonds, taxes, public-private partnerships—to ease the burden on ratepayers.
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To conclude: How is EDF navigating today’s federal landscape, particularly the executive actions aimed at undermining California’s environmental leadership?
EDF has a long track record of working productively across party lines, and we’ll continue to do so. That’s why our motto is: “Finding the ways that work.” We’re pragmatic and solution-oriented, focusing on two things.
One, collaborating wherever we can, on budget negotiations and permitting discussions, our federal team played a crucial role in limiting damage and keeping critical clean energy pieces intact. I’m proud of their work. And two, defending the law where we believe federal action is illegal or undermines state authority—like attacks on California’s vehicle waivers or offshore wind—we’re pushing back, hard. EDF is helping to lead the legal response and will use every tool we have to defend state and environmental rights. In short, we work with people when we can, and stand up when we must.
We could go on and on. Michael, this has been both educational for our readers and me.
