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CPUC Launches Procurement Track to Examine Grid Reliability Worries

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The California Public Utilities Commission is taking a strong look at resource adequacy planning, launching a “procurement track” to examine which resources are necessary for maintaining system reliability and facilitate integration of renewables.

The CPUC issued a June 20 ruling launching the procurement track as part of its integrated resource planning proceeding.

The CPUC in the ruling said it is “growing increasingly concerned with the ability of the bilateral markets to transact and meet 2021 resource adequacy requirements, given such limited instate supply.”

Recent trends in California—a tightening of the bilateral market, declining competitive solicitations and the inability of some load-serving entities to meet 2019 resource adequacy system requirements—led staff to take a closer look at whether there are adequate resources to meet reliability needs between 2019 and 2024.

The planning track, initially outlined in an April decision, will incorporate procurement activities into the IRP process. The CPUC said its first priority is to address perceived near-term reliability challenges in the state, and that parties should file comments and potential solutions by July 15.

The commission pitched multiple short-term solutions to the problem, including requiring each LSE to procure a portion 2,000 MW of new peak capacity, which would be required to come online by August, 2021. Resources could include renewable energy, storage, demand response, energy efficiency and other distributed energy resources, or thermal resources.

The agency also suggested engaging with the Statewide Advisory Committee on Cooling Water Intake Structures and the State Water Resources Control Board to discuss delaying the retirement of some once-through-cooling generation units by a couple of years.

The previous April decision recommended that the California Independent System Operator use the preferred system portfolio as both the reliability base case and the policy-driven base case for study in its 2019-20 Transmission Planning Process. It recommended CAISO study one portfolio with the majority of renewable development in-state and the other portfolio with a much larger amount of imported renewables, primarily wind generation from Wyoming and New Mexico.

“Through the study of these two cases, we hope to learn more about the transmission buildout and cost implications of those two distinct portfolio choices,” the CPUC said.

Kavya Balaraman covers the California Public Utilities Commission and PG&E Corp. for California Energy Markets. She has reported on climate policy and science in Washington, D.C. and graduated from Columbia University's Graduate of Journalism.