Energy experts are concerned that the California Public Utilities Commission has arbitrarily changed its estimate of how much electricity will be imported into the state in the future, and that the change will lead to excess capacity and higher ratepayer bills.
The CPUC in its 2019-2020 Integrated Resource Planning report set the state's electricity import value for resource adequacy at 5,000 MW, a revision that Union of Concerned Scientists energy analyst Mark Specht "strongly objected" to, calling it "a major step backwards" for integrated resource planning models.
"If the [5,000-MW] import limit is kept in place, it will lead to [a reference system portfolio] with more generating capacity than is necessary to maintain reliability, saddling ratepayers with the costs of that unnecessary capacity," Specht wrote in a Dec. 17 filing to the CPUC [R16-02-007].
The commission's RESOLVE model is used to study possible electric resource portfolios for the state, and includes the updated 5-GW import limit. CPUC staff and consultants completed "major updates to the RESOLVE model" since the last IRP process in 2107-2018, according to the commission.
The CPUC also used the updated 5-GW import value in another electric resource model, called SERVM, which limits simultaneous imports into the California Independent System Operator area to 5 GW during all hours with electric demand above the 95th percentile.
The CPUC said it decreased the assumed import value due to tightening market conditions in the West and historical levels of resource-adequacy import capacity. However, the County of San Francisco said the CPUC did not provide an explanation of how the historical import amount was calculated, and therefore created "an artificial, stringent constraint that will have costly consequences."
"The inputs and assumption do not even specify the years that were examined to calculate the 'historical' average," the county said in a filing on Dec. 17. "Limiting potential future RA imports based on historical firm RA import contracts while ignoring both total actual historical imports (beyond claimed RA imports) and projected available imports unreasonably understates the level of capacity potentially available for RA purposes."
Specht with UCS noted that the SERVM model is already designed to capture if and when reliability shortfalls can be alleviated by capacity surpluses in the rest of the Western Electricity Coordinating Council. The SERVM model currently includes a detailed representation of the entities within WECC and each of those entities' plans to add or retire resources, according to Specht.
"The commission should remove the erroneous energy import limit [because] it ignores the reliability benefit of the transmission that connects California to the rest of the West and is inconsistent with reliability planning conducted by other independent system operators," Specht said in UCS' filing.
But the CPUC said that reliance on imports represents a separate set of risks from those associated with in-state resources because California has less control over the import resources. The state could end up relying on all available resources by 2021, including nearly all of the available imported electricity, the CPUC said in a Nov. 13 decision, adding that California might not be able to rely as much on imported hydroelectricity from the Pacific Northwest because those hydroelectric resources are becoming increasingly necessary to serve states' internal loads [D19-11-016].
The commission is now requiring load-serving entities to procure 3,300 MW of additional capacity by 2023. The resources must come onto the grid in increments of at least 50 percent by Aug. 1, 2021; 75 percent by Aug. 1, 2022; and 100 percent by Aug. 1, 2023.
The party that expressed the most concern about increased reliance on imported power was CAISO, the CPUC said in its decision. CAISO recommended that the commission direct electricity providers to prioritize the procurement of existing and new resources capable of serving load in after-peak hours in the absence of solar generation. CAISO is also currently implementing changes to its policies governing maximum import capabilities and demand response, and next year it plans to work on resource-adequacy import provisions (see CEM No. 1570).
The Natural Resources Defense Council and Environmental Defense Fund are also skeptical about California's reliance on imports, especially as more Western states are implementing their own clean-energy targets and renewables portfolio standard requirements, the agencies told the CPUC. EDF suggested that all imported power should be specified and should only be imported if there is reasonable assurance that there are sufficient clean-energy resources to meet the lost capacity from the exporting state.
But the California Community Choice Association said that static import constraints in SERVM do not accurately reflect California's near-term or perhaps midterm realities. The SERVM model assumptions reflect the planned WECC resource retirements, yet do not identify reliability shortfalls unless the artificial import constraints are applied. The commission "should thus remove these constraints or develop a trendline showing a decline in availability over the planning horizons recognizing the timing of WECC-wide retirements and increases in carbon-free procurement," CalCCA said.
Specht said that while no data model is perfect, UCS "does not believe that imperfections and uncertainties should be used as an excuse to ignore the reliability contribution of transmission connections. The commission should use the best available information to determine the reliability contribution of the CAISO's transmission connections, and, by using the WECC anchor data set without SERVM energy import limits, that is already being done."
The CPUC will continue to consider clarifications or changes to the resource-adequacy rules for imports in its RA rulemaking proceeding [R17-09-020].