By Jason Fordney

The California legislature ended its 2017 session in the early hours of Saturday, drawing criticism for its last-minute pursuit of CAISO regionalization and for letting a 100% clean energy bill die in committee.

Assembly member Chris Holden (D) took the political heat on both the regionalization effort and SB 100, the clean energy proposal by Senate President pro Tempore Kevin de Leon that was hotly anticipated by renewable energy supporters. That latter bill died in the Assembly Committee on Utilities and Energy, which he chairs.

On Thursday, police officers guarded Holden’s office in Pasadena as a small band of protestors appeared, according to social media posts. As news spread that SB 100 had stalled, Holden was tagged on social media and actor Leonardo DiCaprio posted Holden’s phone number — and those of other lawmakers — to his more than 18 million Twitter followers.

Holden’s main vehicle to boost regionalization, AB 726, was kicked back to the Senate Rules Committee on Tuesday and would have required policy committee approval before returning to the Senate floor. Another bill containing regionalization language, AB 813, was amended by the Senate and referred back again to the Rules Committee the week before.

“It’s important to recognize that these bills did not authorize regionalization of the grid,” Holden said in a statement on Wednesday. “The bills established the next steps for the ISO to follow.  But there is still more to discuss starting with the role of the legislature in review of any proposed governance structure of a new ISO.  We will continue our work on the issues over the fall and likely revisit it in the second half of this two-year session.”

In an interview with RTO Insider last week, Holden said: “What we wanted to do on the regionalization piece is make sure there was legislative review of whatever came out of a committee evaluation. We wanted that committee to be unanimous. The strategy was then to move to the legislature where people who represent all parts of California had a chance to sign up and speak. It is big legislation, and we wanted to make sure everybody had a say in it.”

Both bills also contain a provision that would require California electricity sellers with more than 100,000 customers to procure “tax-advantaged” renewable generation above that required by the state’s renewable portfolio standard and recover costs from retail ratepayers. The measure is intended to encourage the development of new renewable resources within the state before the expiration of federal production tax credits in 2020.

Holden said his initial focus was on taking advantage of expiring tax credits on wind and solar and addressing concerns among geothermal producers.

“Regionalization was introduced into the conversation around the bill, which I had no problem with doing, as long as it was broken into two pieces — multiple pieces — so it’s not like ‘here’s what we’re going to do and we are cutting everybody out,’” he said.

Independent Energy Producers Association CEO Jan Smutny-Jones said that regionalization would make it easier to export excess solar energy from California and allow access to lower-cost renewables from around the West.

“Obviously, we have spent a lot of time on these issues this year. It’s unfortunate that we couldn’t quite get it out of the legislature this first year, but we look forward to working on it when we come back in January,” he said.

The ISO has allowed for more efficient use of transmission, and the same would be true with regionalization, Smutny-Jones said.

“From a market efficiency perspective, it will work a lot better,” he said. He noted that the Western Energy Imbalance Market (EIM) is working well on a regional basis, but it is only a five-minute market and does not allow day-ahead transactions like a full ISO.

In a blog post Wednesday, Natural Resources Defense Council Co-director Ralph Cavanagh said: “By not authorizing changes in how the grid is managed this session, lawmakers are delaying a prime opportunity to reduce utility bills, cut pollution and increase electric service reliability. And it wouldn’t have cost the taxpayers a dime.”

CAISO, which favors regionalization, said it had no comment.

SB 100 Fizzles, Drawing Ire

SB 100, the zero-carbon bill, widely anticipated by renewable energy advocates, faced strong headwinds, according to Holden. (See California Zero-Carbon Power Bill Advances.)

About SB 100, Holden said, “That is not going to move — there is overwhelming opposition to it. And there is not time to work that out.” He said he hopes to integrate several proposals so there is “a global fix to everything. But we are out of time.”

Labor unions, worried about the potential loss of jobs, also urged the legislature not to pass SB 100. The Coalition of California Utility Employees and the California State Association of Electrical Workers issued public statements opposing the bill, saying that the state is on the way to meeting its current renewable goals and that more information is needed on the proposal.

Legislature Passes Energy Storage Bill

The legislature did succeed in passing legislation meant to encourage the development of energy storage technology in California. AB 546, authored by Assembly member David Chiu (D), is intended to streamline the approval process for new storage installations. Chiu is chair of the Assembly Housing and Community Development Committee.

“Our future energy needs will require us to dramatically improve energy storage and increase the flexible management of electricity supply and demand,” Chiu said in a Sept. 7 statement. “California should encourage simplicity and standardization with local permits. When permitting conditions vary between cities, it can slow the industry down. Guidance that draws from best practices can help local governments standardize their processes so that the energy storage industry will grow quickly and safely.”

The bill requires the development of an energy storage-permitting guidebook by 2020 and requires cities and counties to accept electronic submissions of storage projects.

Aliso Canyon Bill Passes

The legislature also passed SB 801, introduced by Sen. Henry Stern (D), that would require publicly owned utilities in the Los Angeles Basin to support deployment of distributed energy resources (DERs) and energy storage and reduce the region’s reliance on gas-fired generation. (See Aliso Canyon Measure Clears Calif. Assembly Committee.) The bill was drawn up in response to the 2015 leak that resulted in the closure of the Aliso Canyon natural gas storage facility.

A spokesperson with Stern’s office said Gov. Jerry Brown is expected to sign the legislation.

The bill was amended to remove a requirement that investor-owned utilities make data available that would help DER providers identify solutions to increase reliability in the region. That provision that now applies only to the Los Angeles Department of Water and Power.

Also struck was language that would have required IOUs to maximize the use of demand response and other technologies in the areas affected by the well failure at Aliso Canyon.

The legislature reconvenes in January, when renewable energy interests, CAISO and other stakeholders will renew the debate over how aggressively California should pursue regionalization and further strengthen the most ambitious renewable energy requirements in the country.