CalCCA Statement on the San Diego City Council’s Decision to Join a Regional JPA to Implement CCA

Today, in a -7-2 vote, the San Diego City Council gave the green light for the city to participate in the San Diego Regional Community Choice Energy Authority. The joint-powers authority (JPA) will govern and operate a regional community choice aggregation (CCA) program, with the primary goal of achieving a 100 percent renewable energy portfolio. San Diego – California’s second-largest city – is an affiliate member of the California Community Choice Association (CalCCA).

“CalCCA congratulates San Diego for moving ahead with CCA after a lengthy public process. We appreciate the city’s efforts to reach consensus with other communities in the region, and its willingness to make changes to the JPA agreement based on stakeholder input, all of which led to the creation of community-responsive principles for implementing CCA in the San Diego region,” said Beth Vaughan, CalCCA’s executive director. “CalCCA stands ready to support the city and its JPA partners as they continue on a path to launching a CCA program in 2021.”

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About CalCCA
Launched in 2016, the California Community Choice Association (CalCCA) represents California’s community choice electricity providers before the state Legislature and at regulatory agencies, advocating for a level playing field and opposing policies that unfairly discriminate against CCAs and their customers. There are currently 19 operational CCA programs in California serving approximately 10 million customers.

For more information about CalCCA visit www.cal-cca.org.

CPX Legislative update for September 19, 2019

Check back frequently for updates during legislative sessions (January – October every year).

Updated 9/19/19

Legislative Calendar Check: The legislature adjourned on September 13. The governor has until October 13 to sign bills. We will issue two more legislative updates on October 3 and 17, and then will be on break until the legislature resumes business in January 2020. In the meantime, visit the CPX legislative page for occasional updates.

In this 2019 session we are monitored about 29 energy and/or climate-related bills, not all of which would directly impact Community Choice Energy. Below is a selection of highlighted bills with a brief summary, the Center’s position, if any, and the status of the bill.

Two-year bills that will come back in 2020

AB 56 (Garcia) OPPOSE This bill died in committee on July 10 but was brought back in a motion for reconsideration and is now back as a two-year bill. Expect the battle to continue in 2020. – This bill will empower the CPUC to order energy procurement based on shortcomings in the Integrated Resource Plan submitted by Investor Owned Utilities, Direct Access providers, and CCAs.  The bill will allow the CPUC to require procurement on any perceived deficiency that may be 10 to 12 years out in the future. This makes no sense, given that so much lead time would allow a CCA to address any potential problem. Read the Center’s updated July Letter of Opposition. Status: Two-year bill.

SB 350 (Hertzberg) Two-year bill – This bill would “authorize the CPUC to consider a multiyear centralized resource adequacy mechanism,” meaning, a central buyer, which would encroach on CCA statutory authority on procurement autonomy. This bill was a tandem bill with AB 56 that failed to pass the Senate Energy Committee. Status: Senator Hertzberg pulled the bill from the file at the July 10 Assembly Energy Committee. It is now a two-year bill.

SB-520 (Hertzberg) – This bill would empower the CPUC to determine what load serving entity should serve as the provider of last resort (POLR), based on certain criteria. Currently IOUs serve as the provider of last resort in their service territories. A big problem with the bill is that it gives the IOUs veto control over the POLR application process. If another LSE (e.g., a CCA) wants to become the POLR, the incumbent IOU must agree to the application submitted to the CPUC, which is unacceptable. This bill is a step in the wrong direction. It gives the existing utilities control over whether they continue to have the exclusive right to serve as the utility and gives them control over who if anyone would take over the role of POLR. Why should the State hand over that kind of decision-making authority to the existing utilities? We are concerned that over time, this will make the utilities less accountable. We encourage firm opposition to this bill in its current form. Status: SB 520 The bill was amended last Friday, 8/30, in an effort to address the above issues. Unfortunately, we do not believe the issues have been adequately resolved.

Bills we opposed that were enacted:

AB 235 (Mayes) – This bill was amended recently to allow PG&E to issue bonds to cover 2017, 2018 wildfire liabilities that ratepayers could ultimately have to pay for, and allows the CPUC to arbitrarily set a limit on the amount a transmission & distribution utility must pay as a result of catastrophic wildfire that may have been the result of their infrastructure. Status: AB 235 is now a two-year bill.

AB 1584 (Quirk) – Until recently this bill would have impinged on Community Choice agency’s statutory procurement authority. Due to recent amendments, CalCCA has shifted to a neutral position. We remain opposed due to the original mal-intent of the bill and our assessment that there is no compelling merit to the current version of the bill. Status: The bill is in its Third Reading in the Senate today, September 6. Visit the CPX legislative page for updates as they become available.

SB 155 (Bradford) – This bill expands CPUC’s authority over CCA procurement and Integrated Resource Plans. Read the Center’s July Letter of Opposition. Due to amendments made in early July, CalCCA has shifted to a neutral position. We remain opposed. Status: SB 155 was heard in conference committee on September 5, Assembly amendments concurred in (Ayes 38. Noes 0.). Ordered to engrossing and enrolling and on to the governor’s desk.

 

Bills we supported that were enacted:

AB 684 (Levine) – Read our Support Letter. Rules proposed in this bill would ensure that the infrastructure necessary for EV charging in multi-family dwellings is codified through multi-family building standards. Status: AB 684 was heard in the Senate Appropriations Committee on August 30, ordered to the Senate Special Consent Calendar, and was heard there on September 5th. Check the CPX legislative page for results of the 9/5 action.

AB 1046 (Ting) – Clean Vehicle Rebate Program. Read our Letter of Support. This bill requires the California Air Resources Board to develop a plan to provide for the continuous funding of a program with a goal of supporting deployment of 5 million electric vehicles by December 2030. Status: AB 1046 was heard in the Senate Appropriations Committee on August 30 and is being held under submission, an action taken by a committee when a bill is heard in committee and there is an indication that the author and the committee members want to work on or discuss the bill further, but there is no motion for the bill to progress out of committee. This does not preclude the bill from being set for another hearing, but there is not much time.

Bills that were enacted, became two-year bills, were gutted and amended, or died

AB 1054 (Holden, Mayes, Burke) – Enacted: This 200-page bill was fast-tracked through the legislature. In addition to encumbering ratepayers with nonbypassable charges for more than a decade just as they were set to expire, and no safeguard against rate increases, the bill includes a clause that is completely outside of any wildfire concern, and it impacts Community Choice agencies. The clause empowers the CPUC to obstruct sales of IOU assets to other load serving entities and public entities. This could hobble local governments wanting to launch their own municipal service, and/or emerging CCAs that may benefit by acquiring assets that the IOUs no longer want or need. Status: AB 1054 passed out of the legislature on July 11 and was signed by the governor. It is now being challenged in federal court by two PG&E customers on grounds that it may allow for ratepayer funds to be used to pay for cost increases due to PG&E negligence.

AB 1362 (O’Donnell) – This bill as originally written would have destroyed the utility “Code of Conduct” but was amended in May to a point of harmlessness.

SB 246 (Wieckowski) – Read our Support Letter. – This bill, if enacted as written, will impose an oil and gas severance tax on the privilege of extracting oil or fossil gas from the earth or water in California upon any operator engaged in such extraction. Status: Two-year bill. It will be brought back in January 2020.

SB 288 (Wiener) Gut/amend – The former “Solar Bill of Rights” is no more. The “SB 288” bill number is now a different subject altogether. Urge your representative to work with Senator Wiener to initiate a similar bill.

 

SB 386 (Caballero) – Two-year bill. Read our Letter of Opposition. This bill would allow Turlock, Modesto, and Merced Irrigation Districts to count their large hydro assets (dams) toward their Renewable Portfolio Standard (RPS) obligations. This would significantly impact progress with new renewables. These Irrigation Districts will already be able to count their dams as carbon-free pursuant to state policy on decarbonization and mechanisms are in place to protect low-income communities from any cost burdens. Status: On May 30 Senator Caballero announced that SB 386 would be a two-year bill. Expect the fight to continue in early 2020.

SB 676 (Bradford) – This bill would require the CPUC, by December 31, 2020, in an existing proceeding, to establish strategies and quantifiable metrics to maximize the use of feasible and cost-effective electric vehicle grid integration. Based on amendments made in early July, CalCCA has shifted to a neutral position. Status: SB 676 passed unanimously out of the Asm Appropriations Committee on August 21 and is now on to the full Assembly.

SB-772 (Bradford) – Two-year bill. Relates to procurement of long duration bulk energy storage. Concerns center on forcing the hand of CCA procurement. Status: On May 30 the bill was ordered to the inactive file on request of Senator Bradford.

SB 774 (Stern) – Two-year bill. SB 774 would require IOUs to collaborate with the State’s Office of Emergency of Services and others to identify where back-up electricity sources may provide increased electrical distribution grid resiliency and would allow the IOUs to file applications with the CPUC to invest in, and deploy, microgrids to increase resiliency. Concerns focus on too much control being placed in the hands of the IOUs over microgrid development when other LSEs and stakeholders can and should play a role. Status: At the request of the author, SB 774 was placed in the inactive file on July 8.

For the complete list of bills we are monitoring click HERE.  Next CPX legislation update will be on Thursday, September 19th.

California’s new, $100 million, low-income solar program

A new program expanding solar access to low-income families in California has been unanimously passed by state regulators.

Disadvantaged Communities – Single-family Solar Homes (DAC-SASH) aims to increase the adoption of solar power by low income households in disadvantaged communities by investing $120 million dollars into incentives annually through 2030. Specifically, the program will provide $8.5 million in annual total to customers who meet income qualifications and live in the top-25% most disadvantaged communities in the state.

And, while bringing solar to disadvantaged communities cannot be overstated in its importance, both in terms of expanding solar as a generation resource and narrowing the racial and socioeconomic expanse of solar, those are the topics most frequently focused on when a program like DAC-SASH goes into effect.

What has the most personal impact potential is the focus on the community members under DAC-SASH. Specifically, the notion outlined in the program’s announcement that says

The program will also integrate job training opportunities into every project, creating ladders of opportunity for individuals from all backgrounds to access well-paid jobs in California’s solar industry, and ensuring lasting community benefit.

DAC-SASH is being administered by GRID Alternatives, a non-profit organization which also oversaw the implementation of the Single-family Solar Home (SASH) program and claims to have engaged over 40,000 people in solar education and training.

That 40,000 reach is impressive, compounded by the fact that most of those people would otherwise have no resources to pursue that type of training and education. One of the biggest issues with these disadvantaged communities is the cycle born from the lack of resources. Without access to quality education, those living in these disadvantaged communities have no means to escape their current conditions, effectively putting entire communities in generational limbo.

What makes these programs so valuable is that they offer a way out. Someone living in these communities can show up to a project site and immediately receive training in a practical, real, setting. What’s more is GRID Alternatives shares that, as of 2017, only seven percent of solar installation jobs required a bachelor’s degree. With those to factors together, the program can effectively create an entire new workforce with the skills to work jobs that will allow the workers to escape the cycle of poverty afflicting these communities.

This was a fact noted by California Public Utility Commission Deputy Executive Director for Energy and Climate Policy, Edward Randolph, who said:

We look forward to working with GRID Alternatives and program stakeholders to ensure the program provides maximum impact in our most vulnerable communities.

Any reader interested in applying for or learning more about DAC-SASH can do so through GRID Alternatives’ Energy for All Program.

 

California’s new, $100 million, low-income solar program, by Tim Sylvia, PV Magazine, September 17, 2019.

California Supercharges Battery Incentive for Wildfire-Vulnerable Homes

California has passed its first-ever subsidy aimed specifically at bringing more distributed solar and energy storage to people at highest risk of having their power shut off by utilities trying to prevent wildfires.

The California Public Utilities Commission approved changes (PDF) late last week to the Self-Generation Incentive Program, the state’s premier behind-the-meter battery incentive program. Among them is a $100 million carve-out for vulnerable households and critical services in Tier 2 and Tier 3 “high fire threat districts,” offering incentives that could pay for nearly all of a typical residential battery installation, according to the CPUC analysis.

This supercharged incentive is aimed specifically at people at the highest risk of being hurt if, or when, grid power is cut off for hours or even days at a time under the state’s heightened wildfire prevention regime. While utilities have been sparing in their use of this new “public safety power shutoff” authority so far this summer, they are largely at the mercy of the weather to determine how often they’ll be forced to use it in the future, or how many customers might be affected.

Climate change is driving hotter and drier conditions, putting large swaths of the state at high risk of catastrophic wildfires, including those caused by utility power lines. Pacific Gas & Electric’s bankruptcy was driven by its liabilities from wildfires in 2017 and 2018 caused by its power lines, and Southern California Edison and San Diego Gas & Electric have faced credit downgrades and the threat of insolvency if they’re hit with blame for a major fire.

State regulators and lawmakers have responded to the crisis with steps including a $21 billion wildfire fund for utilities, as well as mandates to invest billions in grid repairs, tree-trimming, weather forecasting, and other wildfire prevention efforts. Thursday’s decision marks the first time the CPUC has approved one of the several proposals from utilities and distributed energy resources vendors such as Sunrun to put market-based incentives to work on the same task.

The funding will come from SGIP’s equity budget, a set-aside for low-income, medically compromised or otherwise disadvantaged residents. Utilities and solar-storage vendors have struggled to enroll many of these customers in what’s still an expensive solar-storage proposition, leaving large portions of the equity budget unspent.

The regulator’s decision addresses many of challenges on this front, such as opening SGIP funding to specific Central Valley disadvantaged communities and participants in existing multi-family housing solar programs. It also boosts the current cap of 50 cents per watt-hour for battery installations, already higher than the mainstream incentive, to 85 cents per watt-hour.

Higher premium

The $100 million carve-out would apply an even higher premium to systems meant to bolster grid resilience against wildfires, up to $1 per watt-hour. “This will address the primary barrier to participation in SGIP by equity budget-eligible customers, particularly residential customers, which is lack of access to financing or capital,” the CPUC noted.

Indeed, at $1 per watt-hour, SGIP pays for $13,200, or 98 percent, of the cost of the typical Tesla Powerwall residential battery system used as the CPUC’s reference case, compared to $6,600 or 50 percent at 50 cents per watt-hour, or $11,200, or 83 percent, at 85 cents per watt-hour.

“Party comments on the proposed decision persuaded us that the risk of setting the incentive levels too low for the new equity resiliency budget and the equity budget, leading again to no or very low participation in these budgets, outweighs the risk that developers will inflate costs,” the CPUC wrote.

Not everyone living in Tier 2 or 3 areas will be eligible for this funding, only “SGIP critical resiliency needs” customers. With a few exceptions, this includes people who meet the equity budget’s low-income and disadvantaged criteria, or are “medical baseline” customers who have notified their utility of a “serious illness or condition that could become life-threatening if electricity is disconnected.”

Critical services and critical infrastructure in Tier 2 and 3 districts can also apply for the carve-out, although CPUC’s decision makes clear it will prioritize “only the most critical facilities and infrastructure and those with the least ability to fund a storage system.”

The CPUC also set up new rules for critical resilience customers, who are meant to use their batteries to “island,” or run disconnected, from the grid, to deal with the fact that the SGIP program wasn’t designed for islanding. These include requirements to have the system inspected by the local utility or another authority with jurisdiction over its interconnection, and to file data on how long it can operate in island mode under different conditions.

Beyond the $100 million wildfire carve-out, the decision makes some important changes to SGIP’s approach to low-income, disadvantaged and multifamily housing, the CPUC’s press release noted. Those include granting eligibility to participants in the Single Family Affordable Solar Homes (SASH) program, the SASH for Disadvantaged Communities program, the Solar on Multifamily Affordable Housing program, and the Multifamily Affordable Solar Housing program.

The CPUC also approved $4 million for heat pump water incentives and $10 million for SGIP storage incentives to support pilot projects in 11 San Joaquin Valley disadvantaged communities.

 

California Supercharges Battery Incentive for Wildfire-Vulnerable Homes, by Jeff St. John, Greentech Media, September 17, 2019.

Electrification is an all-around winner

At a time when all the news about climate change seems abysmal, there are rays of hope. Berkeley, California, has become the first major city to ban the use of natural gas in new construction. Over 50 other cities in California are poised to follow.

This is part of a positive trend to go all-electric and decarbonize — to eliminate sources of greenhouse gas (GHG) emissions, including from all fossil fuels like natural gas.

Why we can and should eliminate gas from new construction

Not too long ago, natural gas was seen as a bridge to the renewable energy future, as its GHG emissions were thought to be much lower than those from coal and oil. However, recent reassessments of gas’s lifecycle emissions and environmental impacts — from extraction by fracking, drilling, and other means to end-use burning for heat and electricity — show that the leakage during gas extraction and transport combined with emissions from combustion make gas far more damaging than previously thought.

Given the additional fact that it is now cheaper to bypass the entire gas system for new buildings and go all-electric, it’s a no-brainer to eliminate gas from all new building projects and communities. Making this cost flip possible are advances in new high-efficiency heat pump technologies for HVAC, water heating, and even clothes drying; highly efficient induction cooking; electric vehicles (EVs); and other advances. When you factor in the harmful effects of gas in the home — unregulated toxic fumes of burned and unburned gas emissions increasing rates of asthma, bronchitis, lung cancer, and heart disease — going all-electric is a clear win for public health and safety.

How we can electrify existing buildings 

The next challenge is to decarbonize existing buildings. There are many inefficient older structures to address before our communities and states can completely wean off natural gas. This problem can be overcome, but it will take more time.

By providing incentives to electrify appliances, vehicles, and essentially everything that now burns fossil fuels, as well as incentives for energy efficiency retrofits, we can transform our existing infrastructure. The constant cost reductions surrounding solar, wind, and energy storage will help achieve this goal. A multi-agency bi-coastal working group of building science organizations known as Realize is working out the details of efficiency retrofits in order to create a just and equitable transition away from fossil fuels. This transition will create new solutions and plentiful jobs — jobs that will mostly remain local. We can address climate change strongly and maintain or even improve a robust economy.

The goal is lofty but essential: to begin reversing the damage that climate change is causing now and will increasingly cause moving forward. Anything less is unacceptable for the sake of our children and future generations.

 

The pressing need for resilience 

As more communities make significant commitments to address climate change through electrification, a new and ever-growing need must also be addressed: resilience.

Even in the face of today’s relatively limited effects of climate change, resilience is already a pressing need. As climate impacts grow, resilience becomes ever more important. Thus, while it is extremely important to electrify as rapidly as possible, it is critical to enhance resilience ahead of the growing climate emergency.

Does eliminating sources of fossil fuel decrease resilience? Not if it’s done right and includes making our electricity infrastructure more resilient.

Natural gas is inherently dangerous and not resilient. Gas line explosions make frequent headlines, and the associated infrastructure is highly susceptible to fires, earthquakes, terrorism, and other disasters.  For example, gas service takes 30 times longer than electricity to restore after large earthquakes:

Solar+storage microgrids as a resilience solution 

The fundamental resilience solution is based on local solar and other distributed energy resources (DER), especially as part of community microgrids and facility microgrids, even nanogrids at the residential level. DER coordinated into microgrids provide unparalleled resilience that could never be matched by the historic energy system that relies on centralized fossil fuel infrastructure and vulnerable transmission grids. Community microgrids deliver economic, environmental, and resilience benefits to communities; smaller microgrids deliver the same benefits at a facility level.  

Along with local renewables, energy storage is key DER solution. Solar+storage can be combined at any level to provide resilience and eliminate points of failure that impact large geographic areasRenewables+storage are the foundation of microgrids, which can be configured like layers of an onion: if the outer layer is damaged, there are deeper layers of protection. The more distributed an energy system is designed to be, the more layers it has and the more resilience it offersSignificant examples of community microgrids are happening in the Santa Barbara, California region, including Montecito, and in Calistoga.   

The grid as we know it will morph into an interconnection of layered microgrids, each layer having the capability to operate independently if needed for any reason: 

  • The outer layer is large community microgrid with wholesale distributed generation (WDG) renewables and storage, including largely commercial-scale solar+storage that can protect both at the community layer and at deeper site-level layers, depending on circumstances 
  • Deeper layers serve individual buildings, including down to single-family homes 
  • All the layers interconnect to share renewables+storage for balancing energy at whatever microgrid scenario is currently active 

To facilitate electrification and microgrids, the Clean Coalition has developed Electrification & Community Microgrid Ready (ECMR) guidelines, intended to enhance building codes and assist real estate developers. The ECMR guidelines provide details for achieving full electrification and a facility microgrid while incorporating the wiring and communications required for participating in a larger community microgrid that comes later. This document should be part of the reach code for any municipality with ambitions for electrification and resilience. 

 

Enabling the transition to a resilient energy future 

The beauty of the transition to resilient energy solutions is that it happens smoothly over time. To a great extent microgrids are a bottomsup solution, starting with critical community facilities as well as homes and businesses. What the transition does require is innovations in policy and market mechanisms, and aligning key stakeholders, including property owners, utilities, municipal leadership, solution providers, and community members. In general, DER promote equity in development and ownership by greatly expanding investment opportunities that are individually small and local 

This idea is similar in concept to the development and growth of the internet — except with energy instead of data. Interestingly, the internet will greatly facilitate this transition by enabling instantaneous communicationsUtility asset investment should shift from centralized to distributed solutions. The astronomical costs of centralized generation and transmission can be repurposed in part to fund distributed assets as the microgrid systems grow. The dangers of longrange transmission have become alarmingly clear amidst an increasing torrent of devastating fires in California. 

The technologies for microgrids exist today, and they are ready to deploy. The solutions will comprise a system of widely distributed but highly coordinated local solar and other DER that grow like a beautiful and resilient gardenThe time is now, and the need is great to electrify our communities while ensuring unparalleled resilience. 

 

Electrification is an all-around winner, by John Sarter, PV Magazine, September 17, 2019.

UC investments are going fossil free. But not exactly for the reasons you may think

Our job is to make money for the University of California, and we’re betting we can do that without fossil fuels investments.

We are investors and fiduciaries for what is widely considered the best public research university in the world. That makes us fiscally conservative by nature and by policy — “Risk rules” is one of the 10 pillars of what we call the UC Investments Way. We want to ensure that the more than 320,000 people currently receiving a UC pension actually get paid, that we can continue to fund research and scholarships throughout the UC system, and that our campuses and medical centers earn the best possible return on their investments.

We believe hanging on to fossil fuel assets is a financial risk. That’s why we will have made our $13.4-billion endowment “fossil free” as of the end of this month, and why our $70-billion pension will soon be that way as well.

This risk-averse reasoning might not jibe with what you will read in a newspaper headline or scroll through in a news feed on your phone. Some might see our action as born of political pressure, or as green movement idealism or perhaps political correctness run amok. So be it; we are part of a university system where diversity of opinion thrives.

Read more

Scientists have found a way to use the cold of night to generate electricity

Scientists have discovered a way to power a light by using the cold of outer space, which could eventually be used to create the nighttime counterpart to solar energy. 

Using an inexpensive thermoelectric device, they’re able to harness the cold of space without an active heat input. The process, called radiative sky cooling, can generate enough electricity to power an LED light. Think of it as similar to solar panels, except using the change in the night temperature for power rather than the sun.

“Remarkably, the device is able to generate electricity at night, when solar cells don’t work,” said lead author Aaswath Raman, an assistant professor of materials science and engineering at the University of California, Los Angeles. “Beyond lighting, we believe this could be a broadly enabling approach to power generation suitable for remote locations, and anywhere where power generation at night is needed.”

Details about the project were published on September 12 in the journal Joule.

The project is attempting to create something like solar power, except at night when the sun is not available. Yes, solar cells can be outfitted with batteries to store the day’s energy to be used at night, but those batteries ultimately make the technology more expensive — and can’t be charged at night.

Raman, along with two scientists from Stanford University, Wei Li and Shanhui Fan, has developed a device that uses radiative cooling. Essentially, a sky-facing surface passes its heat to the atmosphere as thermal radiation, losing some of its heat to space and reaching a cooler temperature than the surrounding air.

 

Scientists have found a way to use the cold of night to generate electricity, by Emily Price, Digital Trends, September 16, 2019.

Vote delayed on SLO’s electric-building law; councilwoman accused of conflict of interest

Just as the San Luis Obispo City Council was preparing to approve a new clean energy choice law, the vote has been delayed to consider a conflict-of-interest claim.

A utility labor union alleges that Vice Mayor Andy Pease should have recused herself on Sept. 3 from voting to support a policy that encourages new construction to be all-electric.

That’s because Pease is a licensed architect and a partner in the firm In Balance Green Consulting, focusing on sustainable, energy efficient building, and she stands to gain financially from the vote, the union claims.

On Sept. 3, the council voted 4-1 — with Erica Stewart dissenting — to adopt the proposed law that pushes for all-electric buildings. A second reading of the drafted law Tuesday would have made it official with council support.

Read more

California regulators identify multi-gigawatt energy shortfall

The California Public Utilities Commission (CPUC) has issued a decision within which regulators have identified “the potential for electricity system resource adequacy shortages beginning in 2021,” which is a way of using a lot of technical words to say that they’re facing a shortfall of generation on the grid.

So, when one decides there isn’t enough energy generation on the grid, what is done? In the case of CPUC a proposed decision is sent out, calling for the procurement of 2.5 GW of new energy resources within the transmission access area of Southern California Edison (SCE). And so, just like that, an open market nearly equivalent to the entire sum of solar that has been installed in Massachusetts to date has opened in California.

Now, not to kill the fun just as it’s starting, but there’s no guarantee that the sources procured will end up being solar facilities. The proposal calls for ‘all-source’ procurement, opening the door for natural gas-fired plants, energy storage, demand response and any other potential non-fossil generation facilities.

Regardless of source, 60% of that 2.5 GW figure is required to come on-line by August 1, 2021, 80% by August 1, 2022, and 100% by August 1, 2023.

Further broken down, the responsibility of procurement is not placed entirely upon the shoulders of SCE, however the majority is.

2.1 of the 2.5 GW will be procured by SCE, with local community choice aggregators picking up the tab for the last 400 MW. These smaller-procurement initiatives will be led by Clean Power Alliance of Southern California’s 357 MW share, a share which far outweighs the rest of the smaller requirements.

The need for procurement has been identified due to a medley of projected energy shakeups in the regions future. First come the closures, of which their are two kinds anticipated: nuclear power plants and once-through cooling (OTC) plants across the coast. For anyone wondering, OTC generates energy via the process of diverting water from bodies of water to cool steam after it has passed through a turbine to create power. The process has been found to entraps and kill billions of aquatic organisms annually, mainly fish larvae and shellfish, as well as remove water from habitats used by aquatic organisms and fauna.

However, the CPUC is operating under the idea that the procurement objectives may not be met and, to prepare for such an outcome, has advised that the State Water Resources Control Board extend of the once-thru-cooling (OTC) compliance deadlines for units currently slated to retire by December 31, 2020, for capacity of at least 2.5 GW and up to 3.75 GW, for up to three years beyond their current 2020 deadlines.

Outside of plant closures come projections of  projections tightening capacities for both natural gas systems and energy imported from other states.

Even with all the intricacies of the proposal, this is a massive opportunity for solar development in a state that isn’t exactly short on massive opportunities for solar development. It’s not every day that an energy need equivalent to the capacity of the state with the 8th most installed solar in the nation comes along. Even more rare is the need arising in a state which has shown a historic propensity towards solar as a generation source.

 

California regulators identify multi-gigawatt energy shortfall, by Tim Sylvia, PV Magazine, September 16, 2019.

Looming Grid Shortfall Prompts 2.5GW California Procurement Proposal

State regulators have proposed a major set of responses to what could be a looming grid reliability shortfall in Southern California, including a 2.5-gigawatt reliability resources procurement between 2021 and 2023.

Although the proposed ‘all-source’ procurement would allow existing natural gas-fired peaker plants to compete, it could also open a massive new market for renewable energy, energy storage, demand response and other preferred alternatives to fossil fuels.

The proposal could also allow hundreds of megawatts of seawater-cooled gas plants, known as OTC plants, to keep running past their 2021 retirement dates, if the reliability shortfall it fears can’t be met by other means.

Thursday’s proposed decision from the California Public Utilities Commission (PDF) is the culmination of more than a year of study and debate over the state’s grid reliability needs, as part of its Integrated Resource Plan proceeding. Specifically, it’s focused on Southern California, where a combination of nuclear power plant closures, natural gas system constraints, the coming closure of OTC plants along the coast, and projections of tightening conditions for capacity available for import from other states, has led state grid operator CAISO and utility Southern California Edison to project gigawatts of reliability shortfalls by 2021.

Not all parties agree on the significance of the coming grid reliability threat, and the CPUC and CAISO are continuing their analysis, Thursday’s proposal noted. Even so, “given the imminence of the 2021 system reliability needs, there is not time to complete that analysis, allow additional input and vetting from parties, and still have procurement take place in time to meet a potential shortfall in the timeframe of Summer 2021,” administrative law judge Julie A. Fitch wrote in Thursday’s proposed decision.

In that light, ordering an all-source procurement, backed by extending the lives of OTC plants, represents a “least regrets” strategy, “since electricity shortages would most certainly lead to regrets,” she wrote.

Southern California Edison in the hot seat

Southern California Edison, the investor-owned utility responsible for nearly 70 percent of the load in the grid region under consideration, will be responsible for the lion’s share of the procurement, or 1.75 gigawatts by 2023. But a significant portion of it will also fall to the region’s community-choice aggregators (CCAs), the city and county entities that have taken energy procurement for a small but growing share of the utility’s customer base.

The biggest is the Clean Power Alliance of Southern California, formerly Los Angeles Community Choice Energy, which has been adding cities across L.A. and Ventura counties. The CCA is now responsible for about 14 percent of load in the region, and will be responsible for 357 megawatts of procurement by 2023. Five other, much smaller CCAs will each need to procure between 5 to 17 megawatts apiece by 2023.

Finally, about 14 percent of Southern California Edison’s load in the region is commercial and industrial customers being served by electricity service providers (ESPs) under California’s limited direct access program. These providers will be responsible for 355 megawatts of procurement by 2023.

CPUC has proposed to stage this procurement over three years, requiring each load-serving entity (LSE) in question to get 60 percent of their total by 2021 and 80 percent of their total by 2022. The results are shown in the chart below:

As we noted in a July article in GTM Squared, stakeholders in California’s IRP proceeding have pushed for a variety of solutions to the possibility of a coming reliability shortfall in Southern California. Solar industry groups have pushed for new rules that would better value “hybrid” solar-plus-storage systems as part of this and other CPUC proceedings.

The California Community Choice Association (CalCCA) initially opposed adding a procurement, based on its concerns with the methods that went into the forecasts it’s premised on. Those include changes to how CPUC calculates the effective load-carrying capacity of utility-scale solar farms being built by developers under power purchase agreements with CCAs — changes that could, in effect, de-rate how much solar power is determined to be worth to the grid during different times of the day, week, and year.

But the CPUC deferred to the urgency of CAISO, which projects shortfalls of at least 2.3 gigawatts by 2021, and 2.2 gigawatts in 2022, and of Southern California Edison, which offered the even more dire prognosis of as much as 5.5 gigawatts of shortfall by 2023, given the retirement of OTC capacity.

On the issue of picking utility-owned versus third party-owned assets, the CPUC offered few details, beyond saying that Southern California Edison may “propose to own a portion of the resources to be procured,” but that it must “adhere to the existing rules about utility participation in utility-run solicitations.” While existing resources will be allowed to compete in the all-source procurement, projects already under contract or proceeding under other programs are ruled out.

SoCal’s grid headaches

The proposal follows a string of unusual orders from the state’s regulator to deal with the ongoing reliability crises for Southern California’s power grid.

It started with the forced closure of the San Onofre nuclear power plant in 2013, which led the CPUC to order Southern California Edison and neighboring utility San Diego Gas & Electric to conduct a first-ever procurement of distributed energy resources such as solar, batteries, demand response and energy efficiency to help meet the resulting capacity and reliability shortfalls by decade’s end — although the CPUC also allowed both companies to build new natural gas plants as well.

The forced closure of the leaking Aliso Canyon natural gas storage facility in 2016 forced the CPUC and utilities to respond much more quickly to the possibility of running short of fuel for peaker plants during summer months. The fast-tracked battery procurements ordered to fill the gap were able to supply nearly 100 megawatts of energy storage from Tesla, Greensmith Energy and AES Energy Storage within less than a year, and Southern California Edison and Southern California Gas also launched big demand response programs with Google’s Nest and tens of thousands of its customers in the region.

CCAs have also been inking solar and energy storage contracts at a rapid clip — albeit almost exclusively amongst the older and larger CCAs in Northern California. Silicon Valley Clean Energy and Monterey Bay Community Power signed a joint deal with Recurrent Energy in October for a 150 megawatt solar plant with 45 megawatts/180 megawatt-hours of batteries, as well as a deal with EDF Renewables North America for 128 megawatts of solar with 40-megawatts/160-megawatt-hours of batteries.

And East Bay Community Energy in Alameda County has contracted for a 20-megawatt/80 megawatt-hour battery from Vistra to replace a jet fuel-fired peaker plant, behind-the-meter solar-battery systems from Sunrun to provide a half-megawatt portion of its future RA needs.

But because the looming capacity shortfall is concentrated in Southern California, the CPUC isn’t asking northern California CCAs, or bankrupt utility Pacific Gas & Electric, to participate in this procurement.

 

Looming Grid Shortfall Prompts 2.5GW California Procurement Proposal, by Jeff St. John, Greentech Media, September 9, 2019.