State energy regulators ordered California load-serving entities to procure 4 GW of supplemental generation in addition to procurement ordered in 2021 to meet projected electricity demand and maintain reliability.
The California Public Utilities Commission on Feb. 23 approved a January proposed decision that recommended the addition of 4 GW of new zero-emission energy resources for 2026 and 2027 on top of the 11.5 GW it previously required in a June 2021 midterm reliability order [D21-06-035] (California Energy Markets No. 1727).
"We continue to see higher frequencies of weather conditions, which impacts both supply and demand," CPUC member John Reynolds said. "Overall electricity demand is increasing beyond levels in previous demand forecasts. It is likely due to a combination of factors including weather, increasing penetration of electric vehicles, greater need for air conditioning, electrification of buildings, and changing of consumption patterns during and after the COVID-19 pandemic."
Additional factors cited in the Jan. 13 proposed decision by CPUC Administrative Law Judge Julie Fitch [D20-05-003] are the ongoing drought, which has led to decreased availability of hydroelectric generating capacity; decreasing availability of imported electricity; less electric-capacity availability in the market due to retirement of some older generating units; and accelerating goals for clean-energy production and reductions in greenhouse gas emissions through 2045 (California Energy Markets No. 1647).
Other factors justifying additional procurement that Fitch named in her draft ruling are recent regulatory and statutory changes that affect procurement activities, including:
- Changes in LSEs' resource-adequacy obligations [D22-06-050].
- A new state Strategic Reliability Reserve required under Assembly Bill 205.
- The timeline extension for the retirement of the Diablo Canyon Power Plant units [R20-05-003].
- Carbon-neutrality goals outlined in AB 1279 and Senate Bill 1020.
CPUC President Alice Busching Reynolds noted that LSEs were given an extension to June 1, 2028, to procure certain "long-lead-time" resources. Those resources, required in the June 2021 decision and adding up to 2 GW in each of the years 2026, 2027 and 2028, "will likely need additional time to be developed," she said.
To meet reliability and greenhouse gas emissions-reduction goals by 2030, a preferred system plan in another previous decision [D22-02-004] shows the need for about 35 GW nameplate of new resources on the electric system, the CPUC said.
"Even if all of the incremental resources ordered to date were to come to fruition, that procurement will only meet roughly half of the additional resources needed by the end of the decade to meet the expected portfolio being adopted later in this decision to be used for transmission planning," Fitch's Jan. 13 proposed decision says.
Additionally, the decision recommends a base-case electric resource portfolio to use in the California Independent System Operator's 2023 to 2024 transmission planning process. The decision "will allow the CAISO to identify and authorize transmission development needed to accommodate new resource capacity expected to be developed to meet a 30-million-metric-tons greenhouse gas target," Busching Reynolds said.
"This recommended portfolio uses an increased electric demand forecast associated with a higher-electrification future which is procured by the [California Energy Commission]. The recommended base-case portfolio includes approximately 85 GW of new resources by 2035 on top of the existing resource mix of approximately 75 GW. This is more than a doubling of the nameplate capacity on the system within 12 years," she said.
That includes 54 GW of clean-energy resources, including 2 GW of geothermal, 4.7 GW of offshore wind, more than 28 GW of battery storage, 2 GW of long-duration storage and 1.1 GW of demand response.
The CPUC at its Feb. 23 meeting also approved four Southern California Edison energy storage contracts for a total of 372 MW of nameplate capacity that is expected to come on line by June 1, 2024. The contracts are expected to help SCE meet a portion of its prior midterm-reliability procurement requirement.
The resolution also approves amendments to two previously approved midterm-reliability energy storage contracts that total 300 MW of nameplate capacity [Res E-5205].
