SUPPORT – SB 540 (Becker and Stern) - as introduced, February 20, 2025 3/24/25 - Page 1 of 6
SUPPORT – SB 540 (Becker and Stern) - as introduced, February 20, 2025 3/24/25 - Page 2 of 6
March 24, 2025
The Honorable Senator Becker
Chairman, Senate Utilities, Energy, and Communications Committee 1021 O Street, Suite 3350
Sacramento, CA 95814
RE: SUPPORT - SB 540 (Becker, Stern) – as introduced February 20, 2025 Dear Senator Becker,
We are writing to express our strong support for SB 540. This bill provides the statutory authorization necessary to implement the Pathways Proposal which would make electricity more affordable for California consumers while protecting California’s procurement, environmental, reliability, and other public interest policies.
Developed by a large and diverse set of stakeholders, the Proposal would create a new, independent regional organization that would be solely responsible for setting energy market rules. The California Independent System Operator (CAISO) would continue to operate the markets as it does today, as well as continuing its role in operating the transmission system, transmission system planning, and balancing authority functions. SB 540 ensures the expertise and infrastructure that the CAISO has built is maintained, further protecting investments in current energy markets.
Creating an independent organization responsible for energy market rules would enable more utilities across the West to participate in consolidated electricity markets, making electricity in California more affordable and reliable while also reducing emissions in California.
SB 540 Provides More Affordable Electricity
This legislation, and the consolidated electricity markets it enables, would provide much needed energy affordability benefits to Californians. A new analysis conducted for the California Energy Commission (CEC) determined a West-wide day-ahead market could produce nearly $800 million in annual cost savings for California customers.1 SB 540 Improves Electric Reliability
The legislation would enhance the reliability of California’s power grid by enabling more efficient and coordinated management of energy supply and demand across the Western region. With better access to shared resources, grid operators will be better equipped to draw on a wider resource pool during peak demand periods, reduce the likelihood of blackouts, and support the 1 John Tsoukalis, et al., Brattle Group, “Preliminary Day-Ahead Market Impact Study: Impact of Market Footprints on California Customers” (Prepared for California Energy Commission, January 24, 2025).
SUPPORT – SB 540 (Becker and Stern) - as introduced, February 20, 2025 3/24/25 - Page 3 of 6
resilience of the grid in the face of growing challenges such as extreme weather events and climate-driven disruptions.2
SB 540 Increases Use of Clean Energy
A consolidated western energy market will maximize use of existing clean energy generation and enable a faster, more affordable clean energy future. SB 540 makes more clean energy available both in California and around the West by reducing curtailment (deliberately reducing output below what could have been produced), a growing problem for solar and wind power generators in California. The CEC study determined the expanded market would reduce wind and solar curtailment by 10 percent. This improvement would reduce air pollution by displacing other less efficient emitting resources and enhance the financial foundation for clean energy investment and jobs by enabling California to use and sell more of its clean energy.3 With 80% of energy customers in the West now served by utilities with net-zero carbon energy mandates, the demand for clean energy resources will continue to grow. Maximizing use of existing clean generation is the fastest, most affordable way to reduce emissions.
SB 540 Protects Consumers and California Energy Policy
SB 540 would permit CAISO and California investor-owned utilities to participate in the independently governed energy markets only if the new regional organization meets guardrails designed to protect consumers and ensure that California can continue to set its own procurement, environmental, reliability, and other public interest policies. These protections include:
● public interest protections in the corporate documents; ● specific roles and engagement with state regulators and consumer advocate offices including access to market data;
● transparent and accessible operations including an office of public participation; ● independent market analysis and monitoring to protect consumers; ● engagement with states, local power authorities, and federal power marketing agencies to evaluate potential impacts of proposed market rule and tariff changes to state, local, and federal policies; and
● retention of the right to withdraw from the energy markets governed by the new regional organization if participation were no longer in the interests of their customers.
The diverse set of signatories on this letter represent an unprecedented coalition of consumer advocates, organized labor, environmental advocates, clean energy developers, investor-owned 2 See Tsoukalis, et al. and Michael Wara, et al., Stanford Climate & Energy Policy Program, “Grid Regionalization in the West: Reliability Benefits from Increased Cooperation in Electricity Markets and Operations”(Prepared for California Energy Commission, January 24, 2025). 3 John Tsoukalis, et al., Brattle Group, “Preliminary Day-Ahead Market Impact Study: Impact of Market Footprints on California Customers” (Prepared for California Energy Commission, January 24, 2025).
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utilities, public power, and large customers who strongly support SB 540. For all of the above reasons, we support this legislation and request your support.
Sincerely,
Advanced Energy United (AEU)
Akamai Technologies
Amazon
American Clean Power – California (ACP)
CA & NV State Association of Electrical
Workers (IBEW)
CalCCA
California Chamber of Commerce
California Environmental Voters
California Large Energy Consumers
Association (CLECA)
California State Pipe Trades Council
Ceres
Clean Energy Buyers Association (CEBA)
Clean Power Alliance
Coalition of California Utility Employees
(CCUE)
Data Center Coalition
E2 | Environmental Entrepreneurs
EDF Renewables
EDP Renewables
Environmental Defense Fund (EDF)
Google
Independent Energy Producers Association
(IEPA)
Leap
MCE Community Choice Energy
Microsoft
Mitsubishi Cement Corporation
Natural Resources Defense Council
(NRDC)
Pacific Power
Pacific Steel Group (PSG)
Pattern Energy
Renew Home
Rivian
San Diego Community Power
Sierra Nevada Brewing Co.
Silicon Valley Leadership Group (SVLG)
Silicon Valley Clean Energy
Solar Energy Industries Association (SEIA)
Union of Concerned Scientists (UCS)
Western Freedom
Western Power Trading Forum (WPTF)
Western Resource Advocates (WRA)
Western States SMART Council
CC: Senator Henry Stern, Co-Author
Members, Senate Utilities, Energy, and Communications Committee Nidia Bautista, Chief Consultant
Kerry Yoshida, Republican Caucus Consultant
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Edson Perez
Senior Principal
Advanced Energy United (AEU)
Mike Mattera
Director of Corporate Sustainability & ESG
Officer
Akamai Technologies
Nate Hill
Head of Energy Policy
Amazon
Alexander L. Jackson
Executive Director
American Clean Power – California (ACP)
John Doherty
Secretary/Treasurer
CA & NV State Association of Electrical
Workers (IBEW)
Beth Vaughan
Chief Executive Officer
CalCCA
Jonathan Kendrick
Policy Advocate
California Chamber of Commerce
Melissa Romero
Policy Advocacy Director
California Environmental Voters
Christian Lenci
Chair
California Large Energy Consumers
Association (CLECA)
Mike Hartley
Executive Director
California State Pipe Trades Council
Kelly Trombley
Director, State Policy, West
Ceres
Priya Barua
Senior Director of Market & Policy
Innovation
Clean Energy Buyers Association (CEBA)
Ted Bardacke
Chief Executive Officer
Clean Power Alliance
Hunter Stern
Chair
Coalition of California Utility Employees
(CCUE)
Khara Boender
Senior Manager, State Policy
Data Center Coalition
Susan Nedell
Senior Western Advocate
E2 | Environmental Entrepreneurs
Rachel McMahon
Director, Legislative & Regulatory Affairs
EDF Renewables
Jack Wadleigh
Regulatory Affairs and Market Development
Manager, Western Region
EDP Renewables
Katelyn Roedner Sutter
California State Director
Environmental Defense Fund (EDF)
Dylan Sullivan
Head of Energy Market Development, US-West
Google
Jan Smutny-Jones, Esq.
Chief Executive Officer, General Counsel
Independent Energy Producers Association
(IEPA)
SUPPORT – SB 540 (Becker and Stern) - as introduced, February 20, 2025 3/24/25 - Page 6 of 6
Collin Smith
Regulatory Affairs Manager
Leap
Dawn Weisz
Chief Executive Officer
MCE Community Choice Energy
Robyn Hines
Sr. Director Government Affairs
Microsoft
Austin Marshall
President/C.O.O.
Mitsubishi Cement Corporation
Victoria Rome
CA Government Affairs Director
Natural Resources Defense Council
(NRDC)
Annette Price
Vice President of Government Affairs
Pacific Power
Mark Olson
Vice President of Mill Operations
Pacific Steel Group (PSG)
Varner Seaman
Director of Government Affairs
Pattern Energy
Cliff Staton
VP of Government Affairs
Renew Home
Coley Girouard
Lead, Energy Market Enablement and Utility
Strategy
Rivian
Patrick Welch
Senior Legislative Manager
San Diego Community Power
Mandi McKay
Sustainability & Social Impact Officer
Sierra Nevada Brewing Co.
Monica V. Padilla
Chief Executive Officer
Silicon Valley Clean Energy
Laura Wilkinson
SVP, Strategy & External Affairs
Silicon Valley Leadership Group (SVLG)
Stephanie Doyle
California State Affairs Director
Solar Energy Industries Association (SEIA)
Daniel Barad
Western States Policy Manager
Union of Concerned Scientists (UCS)
Kathleen Staks
Executive Director
Western Freedom
Scott Miller
Executive Director
Western Power Trading Forum (WPTF)
Vijay Satyal
Deputy Director, Regional Markets and
Transmission
Western Resource Advocates (WRA)
Dion Abril
Executive Administrator
Western States SMART Council