Facing an uncertain summer, California regulators tell IOUs to go all in
- Feb 11, 2021 11:34 pm GMT
The California Public Utilities Commission ordered Pacific Gas and Electric, Southern California Edison, and San Diego Gas & Electric to immediately contract for energy resources that can be online in time to serve peak and net peak demand this summer.
The decision is part of a series of actions the CPUC is taking in response to the rotating outages experienced in August 2020. The proceeding is focused on ensuring that enough demand-side and supply-side resources are procured for the state to maintain electricity reliability for consumers if extreme weather events experienced in 2020 re-occur in 2021.
The Commission directedall load-serving entities serving load within the CAISO to procure 3,300 MW of incremental capacity at a minimum as a “least regrets” strategy and encouraged LSEs to exceed these minimum requirements to address what that decision referred to as “potential” system reliability challenges, that are now actual system reliability challenges.
Both utility owned generation and third party owned generation may provide the capacity needed to meet the summer 2021 peak and net peak demand.
The commission said the following resource types may meet the emergency reliabilitycapacity need for the summer of 2021: incremental capacity from existing power plants through efficiency upgrades including revised power purchase agreements, contracting for generation that is at-risk of retirement, incremental energy storage capacity, resource adequacy only contracts or contracts that include tolling agreements, and contracts for firm forward imported energy.
The decision focuses on utility procurement of new generation resources. The CPUC is scheduled to release a separate decision in early March focused mainly on increasing the amount of “demand-side resources.”
A final Root Cause Analysis on the August rotating outages was issued in mid-January and outlined short-term and longer-term actions to mitigate electricity shortages. Among the recommended actions was expediting the regulatory and procurement processes to develop additional resources that can be online by 2021, and ensuring that the generation and storage projects that are currently under construction in California are completed by their targeted online dates.
The expedited proceeding the CPUC opened in November 2020 will develop additional demand- and supply-side resources that can be available by 2021.
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