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Seth Hilton

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Seth Hilton, a partner in Stoel Rives’ Energy Development group, focuses his practice on energy regulation and litigation, representing clients before a variety of energy regulatory agencies in California, including the California Public Utilities Commission and California Energy Commission, as well as in stakeholder proceedings at the California Independent System Operator. His clients include developers of thermal and renewable generation, energy storage developers, transmission developers, energy service providers, and investor-owned and publicly-owned utilities. Seth also represents energy clients in state and federal court and has significant experience in a wide variety of complex commercial litigation.

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On December 6, 2021, the California ISO issued an issue paper and straw proposal (“Straw Proposal”) for its Interconnection Process Enhancements stakeholder proceeding. The California ISO initiated this stakeholder proceeding on September 30, 2021 with the issuance of a preliminary issue paper. The stakeholder process comes at a time when an unprecedented level of energy procurement in California has caused dramatic increases in the number of projects in the California ISO’s interconnection queue. The California ISO’s most recent cluster, cluster 14, saw a record number of 373 interconnection requests being submitted, representing 150,000 megawatts of generating capacity, compared to 155 requests submitted in 2020. Ultimately, the volume of interconnection requests forced the California ISO to seek authority from the Federal Energy Regulatory Commission to extend its interconnection process by approximately one year.

The Interconnection Process Enhancements initiative will have two phases. Phase 1 will focus on near-term enhancements for cluster 14 and before the summer of 2022. The proposals in Phase 1 are scheduled be submitted to the California ISO Board of Governors in May 2022. Phase 2 will focus on longer term modifications and broader reforms to align interconnection processes with procurement activities. Those proposals are scheduled to be submitted to the Board in November 2022.
Continue Reading California ISO Issues Straw Proposal in Interconnection Process Enhancements Stakeholder Proceeding

On October 29, 2021, the California Public Utilities Commission (CPUC) issued three proposed decisions intended to address potential electric capacity shortfalls in 2022 and 2023.  The proposed decisions, if approved, would implement a variety of demand-side and supply-side policies designed to ensure that in the event of extreme weather during the summer of 2022 and/or 2023, California has sufficient electric capacity to avoid outages.

Background

In August 2020, the California ISO experienced outages during the evenings of August 14 and 15, and only extraordinary efforts, including voluntary conservation efforts by California energy users, allowed the California ISO to avoid outages the following week.

After those outages, the CPUC and the California Energy Commission (CEC) have been working towards addressing potential capacity shortfalls during extreme weather events during the summer.  In November 2020, the CPUC opened a rulemaking (R.20-11-003) to ensure reliability in the event of extreme weather during the summer of 2021.  In February 2021, the CPUC adopted a decision directing procurement of additional capacity (D.21-02-028), and in March, adopted a decision directing additional demand-side and supply-side actions to increase supply and decrease load during extreme weather events (D.21-03-056).

California managed to avoid outages during the summer of 2021, although it was helped by relatively mild weather in August and September.  A stack analysis performed by the CEC this summer, however, showed the potential for capacity shortfalls of up to 4,350 megawatts (MW) for summer 2022.  In August, the CPUC implemented a second phase to R.21-11-003, to ensure reliability during the summers of 2022 and 2023.
Continue Reading California Public Utilities Commission Takes Action to Prevent Outages During Summer 2022 and 2023

On September 24, 2021, the Federal Energy Regulatory Commission issued an order (176 FERC ¶ 61,207) approving tariff revisions to amend the California ISO’s (CAISO) interconnection procedures for its current queue cluster (Cluster 14).  The CAISO had requested changes to its interconnection procedures due to the massive increase in the number of interconnection requests it received this year—373 interconnection requests representing 150,000 megawatts of generating capacity, as compared to the 155 requests in 2020.  Prior to 2021, the average number of interconnection requests that the CAISO received each year over the past 10 years was 113.  The volume of interconnection requests in 2020 caused the CAISO to issue a market notice to delay the publication of Phase I interconnection study results by one month, pursuant to its tariff authority to extend the timing for providing study results under Sections 6.6 and 8.5 of its Generator Interconnection and Deliverability Allocation Procedures (GIDAP, Tariff Appendix DD).

Rather than rely on these tariff provisions to extend the study timelines for Cluster 14, however, the CAISO sought approval to establish extensions for various interconnection deadlines early in the process, to provide generators with advance notice of the timing for Cluster 14.  Per the approved tariff revisions, Cluster 14 deadlines will be extended as follows:
Continue Reading FERC Approves Changes to CAISO Interconnection Procedures; Next Queue Cluster Application Window Not Scheduled to Open Until 2023

The California ISO held its final Summer 2021 Readiness Update call on September 24.  As reported on the call, the California ISO managed to get through summer 2021 without any load-shedding events, in contrast to last summer, when load-shedding events occurred on two days in August.  The California ISO; California energy regulatory agencies, including the California Public Utilities Commission (CPUC) and California Energy Commission (CEC); and the Governor’s office have spent considerable effort to avoid any outages for both this summer and summer 2022.  However, as California ISO Senior Vice President and Chief Operating Officer Mark Rothleder explained, California experienced less extreme weather this summer, which helped the state avoid outages.  Although July was challenging, due to a West-wide heatwave and transmission impacted by the Bootleg Fire, August and September were more mild.  In 2020, load peaked at 47,121 megawatts (MW) on August 18, at 15:57.  In 2021, load peaked at 43,982 MW on September 8, at 17:50.  By comparison, the California ISO’s highest peak was 50,270 MW in 2006.
Continue Reading California ISO Survives the Summer with No Blackouts; Battery Energy Storage Beginning to Play Larger Role

In the wake of Governor Newsom’s July 30, 2021 Emergency Proclamation intended to mitigate the strain on the California energy grid, the California Department of Water Resources (CDWR) and the California Energy Commission have been reaching out to generation owners that could accommodate the addition of 30 MW gas turbines generators, an effort now referred to as the State Power Augmentation Project.  So far, two sites have been found:  Greenleaf 1 in Yuba City and Roseville Energy Park.  Each site will accommodate two turbines.  The units were supposed to come online in mid-September.

The two turbines at Roseville Energy Park will be interconnected through the Balancing Authority of Northern California and will participate in the California ISO’s (CAISO) energy imbalance market.  The two turbines at Greenleaf 1 will interconnect to the CAISO.  Under current tariff provisions, the CAISO can interconnect 50 MWs of the 60 MW total.  The Greenleaf 1 site has cogeneration facilities that are currently mothballed but still retain existing interconnection capacity of 49.2 MWs.  Because both the cogeneration facilities and the new gas turbines are gas-fired, there will be no change to the electrical characteristics, and the CAISO can therefore interconnect the two turbines under the repowering provisions of the tariff, but only up to 49.2 MWs.
Continue Reading FERC Grants Limited Waiver to the CAISO to Immediately Interconnect Gas Turbines

In June 2021, the California Public Utilities Commission (Commission) issued its Mid-Term Reliability Procurement Decision, Decision (D.) 21-06-035, which directed load-serving entities subject to its jurisdiction (investor-owned utilities, community choice aggregators, and energy service providers) to procure at least 11,500 megawatts (MW) of net-qualifying capacity (NQC) for reliability for the period 2023 through 2026.  The decision established cumulative annual procurement requirements: 2,000 MW in 2023, 6,000 MW in 2024, 1,500 MW in 2025, and 2,000 in 2026.  The decision also states that the Commission expects all of the resources procured pursuant to that decision to be zero-emitting, unless they otherwise qualify under renewables portfolio standard eligibility requirements (biomass, for example).
Continue Reading CPUC Issues Net-Qualifying Capacity Values to Be Used for Mid-Term Reliability Procurement

The California Energy Commission (CEC) has continued its efforts to implement Governor Newsom’s July 30, 2021 Emergency Proclamation, which was intended to free up energy supply to meet demand during extreme heat events and wildfires, and to expedite the deployment of additional generation.

The Emergency Proclamation authorized the CEC, which is responsible for licensing thermal powerplants of 50 megawatts (MW) or more, to also license new, or expansions of, battery storage systems of 20 MW or more that are capable of discharging for at least two hours and will deliver net peak energy by October 31, 2022.
Continue Reading California Energy Commission Adopts Expedited Siting Order for Energy Storage

On August 31, 2021, the California ISO held its August Summer Readiness Update Call.  During the month of August, the California ISO grid faired well, as temperatures were more mild, and any hot weather was localized, rather than extending across the western United States.

The California ISO also noted recent transparency improvements, including publication of a daily RA Capacity Trend and 7-Day Capacity Trend, as well a Daily Day-Ahead Summer Report and a monthly Summer Market Performance Report.
Continue Reading California ISO Holds Summer Readiness Update Call for August

On August 30, 2021, the California Energy Commission (CEC) held a workshop on its Midterm Reliability Analysis and Incremental Efficiency Improvements to Natural Gas Power Plants.  CEC Commissioners Gunda and Douglas were in attendance, as were California Public Utilities Commission (CPUC) Commissioners Rechtschaffen and Houck.  CEC staff covered midterm (2022-2026) capacity needs, and potential thermal capacity needs, as well as permitted and potential thermal capacity additions.  The workshop also included a panel discussing the deployment and performance of battery energy storage, including a discussion of the risks that could impact California’s planned reliance on large amounts of battery energy storage (over 14,000 MW by 2032 in the CPUC’s recently-released draft Preferred System Portfolio).

The CEC staff’s Midterm Reliability Analysis consisted of a loss of load expectation (LOLE) analysis of a variety of scenarios built around various assumed procurement portfolios, including the CPUC’s draft PSP and a scenario based upon procurement already ordered by the CPUC (1,505 MW NQC from D.19-11-016, and either 9,500 or 11,500 MW NQC from D.21-06-035).  The Analysis focused on the May through October time frame, not the entire year.  It also assumed that procured resources would show up.  Finally, it did not evaluate the impact of extreme weather events.
Continue Reading California Energy Commission Holds Workshop on Midterm Reliability; Finds No Reliability Need for Additional Gas Resources

In docket R.20-05-003, its Integrated Resource Planning (IRP) proceeding, the California Public Utilities Commission is considering its preferred portfolio of new resources for the next ten years.  A lengthy administrative law judge ruling issued August 17, 2021 set out a suggested Preferred System Plan (PSP) for the proceeding, including a suggested resource portfolio through 2032,…