The California Public Utilities Commission this week approved a broad rulemaking process aimed at decreasing electricity demand and increasing supply before temperatures rise next summer in the state.
The CPUC wants to stay ahead of the kind of extreme heat event that caused rolling blackouts in August, but "getting new supply resources by next year [will be] very difficult," commission member Liane Randolph said at the CPUC's Nov. 19 voting meeting.
The August heat wave caused a sharp, sustained increase in energy demand and resulted in energy supply issues in the California Independent System Operator's region, the CPUC said in its decision. The weather also affected thermal natural gas-fired generation, which loses efficiency in intense heat (see CEM No. 1611).
In order to reduce demand on the grid, the commission asked whether it should direct investor-owned utilities to create a paid-advertising program that communicates CAISO's Flex Alert messages. A Flex Alert asks customers to voluntarily conserve electricity when there might be a shortage of supply, particularly if reserves are needed to cover demand, according to CAISO. This year, in August, September and October, ISO representatives issued multiple such alerts, after issuing just one in 2019 and two in 2018.
The commission also asked IOUs, such as Pacific Gas & Electric, Bear Valley Electric and PacifiCorp, whether it should compensate customers who use backup generators to reduce load during energy-strained times. For instance, the CPUC asked, should customers with behind-the-meter hybrid solar-plus-storage assets be able to participate in an emergency load-reduction program and receive compensation? Should customers with other types of behind-the-meter backup generators be able to receive compensation?
To further increase supply, parameters for suspending restrictions on using fossil-fuel backup generators will also be evaluated, the decision says.
Additionally, the commission might direct IOUs to retrofit existing once-through-cooled generating plants that are scheduled to retire at some point this decade. In November 2019, the commission recommended that five OTC natural gas plants remain on line for up to three years beyond their planned retirement date of Dec. 31, 2020. The State Water Resources Control Board approved the recommendation in September.
CAISO, CPUC and CEC leadership and staff are coordinating on a final root cause analysis of the blackouts, with an expected completion date no later than Dec. 31.
At the voting meeting, the commission also approved the following items, among others:
- PG&E's application to sell the 7-MW Chili Bar Hydroelectric Project near Placerville to the Sacramento Municipal Utility District for about $10.4 million. SMUD owns and operates hydroelectric facilities upstream of Chili Bar station, so the sale will allow SMUD to optimize water utilization and power production in its area, the decision says.
- A short-term contract that allows San Diego Gas & Electric to sell renewable energy and renewable-energy credits to Exelon Generation Co. SDG&E will sell up to 175,000 MWh from a biomass facility in Lassen County to Exelon in 2021, the resolution says. Sales revenue will be credited to SDG&E's ratepayers through a tree-mortality charge balancing account.
- A maximum storage level of 34 Bcf of natural gas at the Aliso Canyon storage facility. A new maximum storage capacity will be determined in the CPUC's proceeding on the subject and will be based on modeling and analysis that is nearing completion, the decision says [17-02-002]. In 2017, the CPUC set a 10-year timeline for closure of the facility (see CEM No. 1612).
- PG&E's recovery of $137 million in expenses and $25 million in capital costs for responding to 12 wildfires and one storm in 2017 and 2018. The emergencies include the 2018 Carr Fire, the 2018 Ferguson Fire and the 2018 Mendocino Complex Fire, among others. PG&E incurred costs due to the emergency events for restoring utility services to customers; repairing, replacing or restoring damaged utility facilities; and complying with governmental agency orders, the decision says.