April 14, 2025
Board of Directors
Ava Community Energy
1999 Harrison Street
Oakland, CA 94612
RE: Support for SB 540 (Becker, Stern) – Pathway to a Cleaner, More Reliable Western Grid
Dear Members of the Board,
On behalf of Advanced Energy United, I write to express our strong support for SB 540 and to urge Ava Community Energy to formally support this legislation. SB 540 offers a balanced and pragmatic path to expanding regional energy coordination through the Pathways Initiative—while preserving California’s authority over its clean energy, reliability, and affordability goals.
California is not an energy island. As demand grows and extreme weather events become more frequent, optimizing the use of generation and transmission across the West is essential. SB 540 authorizes CAISO to join a Western day-ahead electricity market governed by an independent regional organization (RO), but only if strict requirements are met. It builds on the successful Western Energy Imbalance Market (WEIM) and upcoming Extended Day Ahead Market (EDAM) by enabling deeper collaboration and resource-sharing.
This structure is the result of a multi-state collaboration, the Pathways Initiative, which includes regulators, utilities, CCAs, labor, and environmental organizations across the West. Unlike previous regionalization proposals, SB 540 ensures that California retains control over key energy policy levers, including our Renewables Portfolio Standard, procurement mandates, resource adequacy, transmission planning, and the ability to exit the market if necessary.
For load-serving entities like Ava, the benefits of a well-governed regional market are significant. Studies from the Brattle Group estimate that a fully realized regional day-ahead market could save California ratepayers up to $800 million annually. Based on Ava’s share of CAISO load, this could translate to up to $32 million in savings per year for your customers. These savings come from better use of regional resources, less curtailment of renewables, and more efficient system dispatch.
SB 540 also strengthens grid reliability, a growing concern as climate-driven heat waves and wildfires intensify. A recent study by the Stanford Woods Institute found that a broader Western market could reduce the number of hours the grid is strained by up to 40% and cut unserved load during extreme events by more than half. That means fewer outages, more stable operations, and lower costs during peak periods.
Ava’s leadership in deploying local clean energy makes your voice especially important in this conversation. As one of California’s foremost community choice aggregators investing in distributed energy resources (DERs)—like rooftop solar, battery storage, electric vehicles, and demand-responsive technologies—Ava understands that the success of California’s energy transition depends on empowering customers to be both producers and consumers of clean energy.
SB 540 increases the value of DERs by giving locally produced power access to more buyers across the west. One study found regional market participation could increase revenues for California solar by up to 43%. By improving the value of all California energy, including from DERs, a regional market supports both existing systems and further investment in local clean energy. Additionally, the governance structure proposed in SB 540 gives CCAs and DER providers greater representation and influence in policy development than they currently have under CAISO or any other market in the country.
The biggest risk to California is not participation—it’s isolation. Without SB 540, regional integration will proceed without us, under competing governance structures like Markets+, which are not aligned with California’s energy priorities. This would fragment the Western grid, reduce our influence, and undermine clean energy value.
Worse, it could create a system where California generators, including public power and CCA providers like Ava, lose market access and revenues while facing higher wholesale costs. The cost of doing nothing is real: up to $617 million per year in missed system savings, weaker grid resilience, and fewer tools to meet our climate goals affordably.
Advanced Energy United strongly supports SB 540 as a path to cleaner, more affordable, and more reliable energy without compromising California’s autonomy. Ava Community Energy is a trusted voice in the clean energy space, and your support would send a powerful message that CCAs are ready to lead in shaping a modern, equitable, and efficient Western grid.
We urge the Ava Board of Directors to adopt the resolution in support of SB 540.
Sincerely,
Brian Turner
Director
Advanced Energy United