California energy planners and grid officials have embarked on a dizzying number of new initiatives and programs to prepare the electric grid for the demands of this summer.
There are 17 current initiatives and efforts underway to avoid rolling blackouts this summer that were reported to the state Legislature April 7 by the California Public Utilities Commission, the California Energy Commission and the California Independent System Operator. Included in the thousands of megawatts of new procurement are natural gas and diesel generation, illustrating the urgency of the state's needs, as well as demand response, geothermal, battery energy storage and other resources.
Much of the activity is centered around the CPUC, which in late 2020 opened a rulemaking to establish policies and rules to ensure reliable electric service in California in the event of an extreme weather event this year [R20-11-003]. In a Feb. 11 decision under that proceeding, the CPUC directed the state's three largest investor-owned utilities—Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric—to seek contracts for additional supply-side capacity [D21-02-028]. The IOUs filed advice letters seeking approval of approximately 564 MW by summer, and the CPUC approved those contracts on March 18.
The CPUC's decision to order the extra procurement drew fire from groups like the Protect Our Communities Foundation, which objected to procurement of fossil fuel-based resources and said the CPUC didn't properly ascertain the causes of the August 2020 blackouts. The group's rehearing request pointed out other issues, such as the fact California was exporting energy during the blackout period.
"The difference with this process is it has just been lightning-quick . . . all the commission is doing is throwing capacity at the problem without understanding the problem," Bill Powers, a board member with Protect Our Communities, told California Energy Markets in a phone interview.
In that same proceeding, on March 25, the CPUC directed the IOUs to take steps to avoid the need for rotating outages in the upcoming two summers, including a new statewide emergency load-reduction pilot program; modification of the IOUs' existing demand-response and critical-peak-pricing programs; funding of a new statewide Flex Alert media campaign; and authorization of an increase in the planning reserve margin to 17.5 percent [D21-03-056] (see CEM No. 1632).
"The CPUC is tracking progress on generation and battery storage projects that are currently under construction in California to ensure there are no CPUC-related regulatory barriers that would prevent them from being completed by their targeted online dates," the report says.
The agency is due to issue an aggregation of data on generation and battery storage projects in the first quarter.
The CPUC in the second quarter will be releasing data collected from integrated resource plans filed by load-serving entities in September 2020, which will include information on resources that are existing, in development and planned.
The CPUC is also tracking progress on the 3,300 MW of net qualifying capacity that it ordered in November 2019, before the blackouts [D19-11-016]. At least 50 percent of the 3,300 MW must be on line by Aug. 1, 2021; 75 percent by Aug. 1, 2022; and 100 percent by Aug. 1, 2023, the 2019 decision says. On Feb. 1, LSEs that elected to self-provide their procurement obligation submitted reports to the CPUC on the status of their projects. CPUC staff is working on quality control and analysis of this data, the commission said.
In the area of improving load-scheduling accuracy, the CPUC said it is exploring technical solutions that are needed to allow IOUs to provide customer usage data to community choice aggregators and energy service providers more frequently, in order to improve load scheduling.
Also, under a Feb. 22 proposed ruling by CPUC Administrative Law Judge Julie Fitch, the CPUC would require load-serving entities to procure 7,500 MW by the end of 2025, partly to make up for the retirement of the Diablo Canyon nuclear plant (see CEM No. 1630). The proposal requires at least 1,000 MW of geothermal, 1,000 MW of long-term storage, and 5,500 MW of any other kind of resource to be procured by load-serving entities by the end of 2025, totaling 7,500 MW of procurement. It also proposes that LSEs be encouraged to procure onshore and offshore wind in the future, and to comply with this proceeding, if available. A proposed decision on replacement resources for Diablo Canyon is expected in the second quarter of this year.
The CPUC also hosted several workshops in February on reliability proposals and topics including the planning reserve margin; import rules; hybrid-resource qualifying capacity rules; demand-response qualifying capacity rules; changes to the resource-adequacy penalty structure; and larger structural changes to the RA framework [R19-11-009]. A proposed decision in this proceeding is expected in June.
The CPUC hosted a workshop in December on a proposal regarding how the agency would order procurement to complement the procurement by LSEs in response to the planning-track activities of the IRP proceeding and various CPUC programs.
"This proposed framework is intended to provide a conceptual foundation for all future procurement informed by the IRP process," the report says. The CPUC is seeking feedback from stakeholders on Phase 1 of the proposed framework, which relates to procurement in the current cycle of the IRP.
CAISO, for its part, is in the midst of a Market Enhancements for Summer 2021 Readiness program, which the CAISO Board of Governors approved on March 24 (see CEM No. 1634). The package was filed to the Federal Energy Regulatory Commission on March 26.
Also approved by the CAISO board on March 24 was a package of RA changes that have three elements: a minimum-state-of-charge requirement for energy storage, fixes to the planned-outage process, and new authority to procure capacity to meet local-area efficiencies. Those rules have also been filed to FERC.
CAISO is developing modifications to its "Procedure 4420" modification that will allow the usage of firm load to meet contingency reserve requirements of the North American Electric Reliability Corporation and to use firm load for the dispatch of procured spinning reserve resources. This will allow CAISO to minimize or avoid shedding of firm load during periods of resource deficiency, it said.
CAISO and the CEC are also working on increased coordination with non-CPUC-jurisdictional entities regarding additional procurement, and a further analysis of proxy demand-response and reliability demand-response resources.
CAISO said it is continuing to work with the CPUC, local regulatory authorities, and other stakeholders to resolve issues around resources that have been credited against resource-adequacy requirements.
Other efforts include CAISO's "hybrid and co-located storage resource enhancements" and reliability must-run agreements with resources that have filed to retire, such as the RMR deal with the 34.5-MW Kingsburg cogeneration plant in Kern County, which the CAISO board approved on March 24.
In addition to all these activities, CAISO recently urged the CPUC to procure an additional 10 GW of capacity to make up for the retirement of Diablo Canyon (see CEM No. 1635).
The CPUC on March 25 approved an "emergency load-reduction program" that directs certain IOUs to pay customers to generate electricity when CAISO issues an alert indicating electricity supply on the grid is running low. The ruling would encompass "prohibited" energy resources, such as large diesel generators (see CEM No. 1634).
The CEC, in collaboration with the CPUC and CAISO, is also looking at ways to upgrade existing natural gas power plants to increase their capacities. The CEC has already reviewed and approved multiple requests for software and equipment improvements for the projects, with additional requests expected prior to summer.
With all the new procurement, ushering of battery storage onto the grid and other emergency measures regarding resources such as natural gas and diesel, the state is pulling out all the stops to prepare for the sweltering days of summer in California.