A California Public Utilities Commission judge has proposed that the commission order an additional 6 GW of capacity for the state between 2029 and 2032 to get ahead of disappearing federal tax credits and loans for renewable energy resources.

Under the proposal, 3 GW of additional procurement would be required by 2029, 4.5 GW by 2031 and 6 GW by 2032.

While ordering an additional 6 GW of resources now might be “premature,” the extra capacity likely would be needed “to achieve long-term goals,” CPUC Administrative Law Judge Julie Fitch said in a Sept. 30 ruling.

The additional resources are needed in light of the California Energy Commission’s 2024 Integrated Energy Policy Report (IEPR) demand forecast, which shows significant load growth between 2028 and 2032. Compared with the 2023 IEPR, the 2024 IEPR shows an additional 2 GW of load needed by 2030 and 5.8 GW by 2040.

The bump in future load is caused by forecasts for new data centers, increased electric vehicle charging and expanded building electrification, the ruling says. Additionally, a decreased amount of behind-the-meter solar and storage will be installed in the coming years, the CEC’s load forecast showed.

Current tax policies that make renewables more cost competitive are assumed to last only through 2029, CPUC staff said in a presentation associated with the ruling. If the federal investment tax credit and production tax credit are eliminated, ratepayers would experience “negative cost impacts” related to procurement of renewable resources, the ruling says.

“Ordering procurement now may help load-serving entities take advantage of any projects eligible for expiring federal tax credits or other incentives, such as grants or loans, that may be at risk at the federal level,” the ruling says.

However, some stakeholders are concerned a new procurement order could increase ratepayer costs due to a “frenzy of procurement by a large number of LSEs in an already tight market,” it says.

Many LSEs said they already are procuring as many resources as possible. Ordering them to find more resources would “not assist in the areas where procurement is delayed because of interconnection and permitting issues or supply chain issues,” the ruling says.

The ruling does not specify which types of energy resources are needed or in what amounts for the proposed 6 GW. As more energy storage is added to the grid, there might be “a question about the need for energy resources to generate sufficient additional electricity to charge the storage,” the ruling says.

In the ruling, Fitch also asked stakeholders to provide feedback about whether repowering existing energy facilities should be eligible to count toward “new” resources.

In most past decisions, the commission did not allow procurement to include repowering facilities or tapping into existing clean energy or natural gas resources, but in the late 2020s and early 2030s, certain resources will be of retirement age, Fitch said in the ruling.

Fitch also asked stakeholders to respond to certain questions related to new procurement, such as:

• • Should the new procurement be for generic capacity, or should there also be an energy component due to the declining effective load-carrying capability of battery storage?
  • Should a procurement order specify particular types of resources, such as clean long-duration energy storage, or should the order be for generic capacity resources?

Stakeholder comments on the proposal are due Oct. 22.