Pathways implementation

As Western energy markets operated by the California ISO have expanded, the governance of those markets has evolved. In July 2025, the ISO implemented the Pathways Step 1 governance framework, resulting in the Western Energy Markets (WEM) Governing Body holding primary authority over rules in the market tariff that apply to the Western Energy Imbalance Market (WEIM) and the Extended Day-Ahead Market (EDAM). This change also empowered the WEM Governing Body to make independent filings at Federal Energy Regulatory Commission (FERC) in the event of an unresolved dispute with the ISO Board. 

With the passage of Assembly Bill 825 in California in September 2025, the ISO has now initiated the work necessary to implement the Pathways Step 2 governance framework in alignment with that legislation. AB 825 enables the ISO to transfer sole authority over the governance of the WEIM and EDAM to a new, independent regional organization in accordance with the Pathways Step 2 proposal. 

The ISO is required by AB 825 to undertake several steps before transferring governance authority to the Regional Organization for Western Energy (ROWE) to implement Pathways Step 2. Illustrated below is the ISO’s current estimation (subject to change) of when key work streams will be performed to meet the requirements of AB 825 and implement Step 2: 
 

Learn more on the development of reports from the ISO as required by AB 825. Meanwhile, the ISO expects to administer several policy initiatives related to the certification of the ROWE, ISO tariff modifications, and other activities associated with Pathways implementation, learn more about the initiatives supporting Pathways.

ISO staff is here to assist you. If you need additional information on the Pathways Implementation, please contact:

Adam Schultz
ASchultz@caiso.com