California's load-serving entities must procure 11.5 GW of zero-emission renewable energy between 2023 and 2026 following unanimous approval of the mid-term procurement order by the California Public Utilities Commission at its June 24 voting meeting.
The commission also voted to extend pandemic-related relief to utility customers, adopted changes to the avoided cost calculator for distributed resources, and closed its Direct Access proceeding. It also revised guidelines for Public Safety Power Shutoffs and heard from the commission's Wildfire Safety Division.
The commission's procurement order helps the state meet its reliability and greenhouse gas emissions goals as well as its mandated energy targets, which include having 100 percent zero-carbon electricity resources in place by 2045 [R20-05-003], the CPUC said.
"This is a landmark decision," Commissioner Cliff Rechtschaffen said. "I don't think it's hyperbole to describe it as such. This is an unprecedented amount of energy. . . . Enough to power 2.5 million households."
The CPUC's original proposed decision would have required electricity providers to secure 11.5 GW of capacity by 2026, with a specific requirement that investor-owned utilities secure 500 MW to 1,500 MW of natural gas generation. The commission had also issued an alternate proposed decision that would require IOUs to secure about 500 MW of natural gas generation. But IOUs complained to the CPUC that they were being forced to procure "dirtier" natural gas-fired power, while community choice aggregators had no such requirement (see CEM No. 1646).
The massive amount of new resources will replace retiring generation, including the Diablo Canyon Power Plant—which stands to have its generation replaced with 2,500 MW of firm, zero-emissions generation by 2025, according to the decision—and several thermal power plants subject to the State Water Resources Control Board's once-through-cooling regulations.
Rechstachaffen said the decision was the result of "a tremendous amount of staff work" plus coordination with the California Energy Commission and California Air Resources Board in addition to more than 40 intervening parties. "People have been calling in steadily over past few weeks," he said.
Originally, the document addressed efficiency improvements at existing natural gas plants, but this requirement has been removed. Rechstachaffen said the CPUC will be working with the CEC on additional analysis of the need for fossil-fuel generation resources for reliability purposes to inform the next procurement decision. Eligible green hydrogen resources will also be addressed in a subsequent decision.
During the public comment period, several speakers—some of whom notably identified themselves as living in geothermal-heavy Imperial County—expressed support for the specific inclusion of 1,000 MW of geothermal procurement in the decision. A technology-specific mandate will help by providing the county with much needed jobs and ensure resource diversity while enhancing grid reliability, they said.
Geothermal is one of the long lead-time resources in the procurement decision. Biomass could also satisfy the requirement, Rechstachaffen said. The procurement plan also requires 1,000 MW of long-duration storage.
CPUC President Marybel Batjer said the decision is "a starting point when we consider what resources we need." She added that she would be taking the numerous public comments made during the meeting to heart "with great respect and consideration" in shaping the preferred system portfolio decision, which is due by end of the year.
Commissioners also voted unanimously to extend COVID-19 pandemic relief to energy utility customers, an issue addressed frequently during the public comments, by requiring all utilities to institute payment plans for both residential and small business customers behind on their bills.
The extension aligns with several other pandemic-related executive order extensions and will also allow time for any federal and state relief available to be applied "to get arrears down as soon as possible," Commissioner Martha Guzman-Aceves said.
Numerous other public comments were made regarding proposed commission changes to the avoided cost calculator, which is used to determine the cost-effectiveness of distributed energy resources. Most of the protests involved how rooftop solar resources are modeled.
Solar proponents minced no words, with one caller characterizing the proposed changes as "a devious and malevolent attack on rooftop solar." Other objections included allegations of violating due process contending these were not "minor" changes. Several other callers said the ACC fails to include costs associated with transmission and wildfires.
Several speakers said numerous comments submitted in protest had not been published by the commission.
CPUC staff member Simon Baker said the ACC is but one of the tools employed to determine the value of distributed energy resources. He also said many of the protests were based on false information, including assertions that the public did not have sufficient time and opportunity to comment.
"The reason for the controversy," he said, "is that [the ACC] indicates lower avoided costs in the midday hours compared to the 2020 calculator. This occurred for several reasons," one of which was changes in fixed costs. This caused the value of the avoided costs for residential electric heat pump use to increase by 145 percent, while rooftop solar's value dropped by 74 percent, Baker said.
He added that the changes were supported by representatives from Cal Advocates, The Utility Reform Network, Natural Resources Defense Council, and utilities. The changes passed unanimously.
The commission also voted to close its proceeding regarding Direct Access, which commissioners called "a difficult decision." The decision leaves in place the CPUC's recommendation that the program not be expanded, which had drawn a rebuke from the state Legislature. California lawmakers recently passed legislation requiring the CPUC to come up with ways to expand the program (see CEM No. 1642).
Guzman-Aceves said "at this time, we could not make all the findings required of us. We could not insure reliability with opening this up."
Commissioner Darcie Hauck suggested that the commission consider distinguishing energy service providers with aggressive GHG reduction goals and others who could meet the criteria when considering direct access in the future.
In other business, commissioners revised the guidelines for IOUs considering PSPS events, which Batjer said should "always be a measure of last resort." Changes include the setting up of community resource centers and reporting usage of them, with a requirement that the plans for these be updated each year. With the revisions, IOUs must now, for example, provide minimum services—"device charging stations that are capable of powering medical devices, cellular network services, water, chairs, PSPS information representatives, and restrooms." They will also be required to gather "usage metrics" for the CRCs. Other changes regard reporting and information the utilities must provide on their websites.
The CPUC also heard a report on the transfer of the Wildfire Safety Division, which moves under the auspices of the Natural Resources Agency and becomes the Office of Energy Infrastructure Safety July 1.
The next commission voting meeting is scheduled for July 15. The agenda will be available July 2.