Committee on Regional Electric Power Cooperation's (CREPC) Principles for Managing the Western Interconnection

The Western Interconnection is electrically isolated from the other three interconnections in North America. The Western Interconnection serves consumers in all or parts of 14 western states, two western Canadian provinces, and northwest Mexico.

1. Appropriate geographic decision-making and local empowerment. Grid management decisions should be made at the lowest level, provided there are no significant electrical externalities associated with such decisions.

A. At the North American and national levels, decisions made within the Western Interconnection should be final; provided, however, federal regulators may overturn a Western Interconnection decision if, under specific provisions of law, they determine, or allow to stand a determination that the Western Interconnection decisions conflict with the need for uniformity of standards across all interconnections in North America in order to promote a well-functioning competitive electricity market.
B. Within the Western Interconnection, decisions at the sub-interconnection level should be encouraged, provided all parties in the interconnection are aware of the issues being decided and provided there is a rapid decision process to determine if there are significant electrical externalities which would then require a broader review of the issues.

2. Accountability for decisions. A grid management structure must clearly establish the legal, political and economic authority and responsibility for decisions affecting the Western Interconnection.

A. Regarding reliability, at a minimum, an organization charged with managing the Western Interconnection needs to be empowered to (i) adopt an economic value for reliability, (ii) set standards for planning, maintenance and operation to assure economic levels of reliability, (iii) allocate the costs of reliability measures fairly among beneficiaries, (iv) monitor directly (or empower states to monitor) compliance, and (v) oversee a security center or centers to monitor hourly operation of the grid.

3. Efficient, responsive decision-making. Grid management decision processes must (a) be efficient, transparent, public, and open to all interested parties, (b) not discriminate against any class of market participants, (c) not impose requirements that are detrimental or inappropriate for the Western Interconnection, (d) result in timely decisions, and (e) follow due process with the opportunity for appeal to an independent body. Such an appeals body must act expeditiously on appeals and must base its judgment on what is best for consumers in the Western Interconnection.

4. Markets before mandates. Whenever possible, grid management in the Western Interconnection should further the development of effective competition and the efficient allocation of resources in bulk power markets.

5. Explicit tradeoffs. In both short-term operational decisions and long-term policy decisions, commercial and reliability interests are inextricably linked.

A. In setting the desired level of reliability, the costs and benefits of reliability to consumers locally and grid-wide must be aligned.
B. The value consumers place on avoiding outages, must be compared to the costs of achieving that level of reliability.
C. The evaluation of the costs and benefits of levels of reliability must be made by an independent body.

6. Accommodation of the international grid. Decision processes to manage the electrically-distinct Western Interconnection must be structured to permit full and equal participation by Canadian, Mexican and U.S. entities in the Interconnection and must accommodate the legal structures in all three nations.

7. Protection of the public interest. Decisions regarding the management of the Western Interconnection are imbued with the public interest.

A. The public interest is best represented through public officials in the states and provinces in the Western Interconnection who are directly accountable to electric power consumers in the region.
B. Public officials should be represented in the governance of the Western Interconnection either as voting members of boards or as participants in the selection of independent board members.

8. Taxation with representation. With the rise of a competitive market, voluntary dues are insufficient to ensure the funding of grid management functions.

A. A fee on grid users is the most equitable method of financing a grid management institution.
B. Monies paid by western consumers must be used to benefit western consumers.
C. Those spending monies collected from western consumers must be accountable to western consumers.