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On May 20, 2022, the California Public Utilities Commission (CPUC or Commission) issued a proposed decision (PD) that would, among other things, adopt Southern California Edison’s (SCE) 24-hour-slice proposal as the new resource adequacy (RA) framework applicable to load-serving entities (LSEs) under the CPUC’s jurisdiction.  Generally, the proposal would require each LSE to show that it has enough capacity to meet its specific gross-load profile, including a planning-reserve margin, or PRM, for all 24 hours for the “worst day” of each month.  The “worst day” would be defined as the day of the month that has the highest coincident-peak-load forecast.  This new RA framework would likely be implemented in 2025, with 2024 serving as a “test year” for the new framework.

The Commission initially began examining potential changes to its RA framework due to significant and ongoing changes in California’s generation-resource mix, with the increasing reliance on variable resources such as solar and wind, and use-limited resources, such as energy storage and demand response, as well as the retirement of older natural gas generation.  The Commission solicited proposals for a new RA framework starting in 2020, and in 2021 it tentatively adopted Pacific Gas and Electric’s (PG&E) slice-of-day proposal in decision 21-07-014.  The Commission ordered a series of workshops to further develop the proposal, culminating in a workshop report submitted March 1, 2022.  During the workshops, two alternate proposals were developed:  SCE’s 24-hour-slice proposal, and a two-slice proposal developed by Gridwell Consulting.  The parties generally favored one of the two alternate proposals, rather than the PG&E slice-of-day proposal.  The selection of SCE’s 24-hour-slice proposal will set the direction for further development of the new RA framework.
Continue Reading The California Public Utilities Commission Issues Proposed Decision on New Resource Adequacy Framework

On May 18, 2022, the California Energy Commission met to discuss its draft report to evaluate and quantify the maximum feasible capacity of offshore wind to achieve reliability, ratepayer, employment, and decarbonization benefits and establish megawatt offshore wind planning goals for 2030 and 2045. The report is the first of three interim work products that California AB 525 directs CEC to prepare. By the end of this year, the CEC must complete and submit a preliminary assessment of economic benefits as they relate to seaport investments and workforce development needs, and complete and submit a permitting roadmap. The ultimate requirement of AB 525 is to require, by June 30, 2023, the CEC, in coordination with federal, state, and local agencies and a wide variety of stakeholders, to develop a strategic plan for offshore wind energy developments installed off the California coast in federal waters and submit it to the California Natural Resources Agency and the Legislature.Continue Reading California Energy Commission Discusses Draft Report on Offshore Wind

In its first move since hitting “pause” on the California Public Utilities Commission’s (Commission) consideration of a controversial December 2021 proposed decision (Proposed Decision or PD) that would have overhauled the existing net energy metering (NEM) tariff for California’s solar customers, the presiding administrative law judge (ALJ) issued a ruling on May 9 to reopen the record and invite party comments on a limited scope of issues.

Background

The Commission adopted California’s existing solar tariff, known as NEM 2.0, on January 28, 2016 in Decision (D.) 16-01-044.  Customers opting into this tariff pay a one-time interconnection fee (less than $150 for systems under 1 MW and $800 for systems over 1 MW).  Customers taking service on the NEM tariff are automatically opted into a time-of-use rate plan and are subject to select non-bypassable charges (NBCs) that are used to fund general customer programs such as contributions to the wildfire fund, nuclear decommissioning, and the public purpose program, among others. NEM customers receive a bill credit for any excess generation produced by their system and exported to the electric grid, which credits may be used to offset customer energy costs. Under NEM 2.0, any excess generation credits are applied to the customer’s bill at the same retail rate (including generation, distribution and transmission charges) the customer would have paid for the energy consumption.
Continue Reading Commission Ruling Reopens the NEM 3.0 Record to Invite Comment on and Consider Limited Issues

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

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