The California Public Utilities Commission on Friday proposed a spate of measures aimed at ensuring grid reliability during the next two summers, when the state faces capacity shortfalls as it transitions from fossil fuels to renewable resources.
The measures include new and expanded demand response programs and additional capacity procurement, including temporary gas generation, to meet demand from the type of extreme heatwaves that struck the West in the summers of 2020 and 2021.
“The proposals are part of the CPUC’s ongoing efforts to help ensure safe and reliable electric service and to respond to Gov. Gavin Newsom’s July 30, 2021 Emergency Proclamation urging all state energy agencies to ensure there is adequate electricity to meet demand,” the commission said in a news release. “A CPUC analysis found that a range of 2,000 to 3,000 MW of new supply- and demand-side resources will help address grid reliability in the most extreme circumstances in 2022 and 2023.”
Rolling blackouts in August 2020 and energy emergencies the past two summers occurred during hot summer evenings as solar ramped down but demand remained high. The CPUC, the California Energy Commission (CEC) and CAISO have been taking steps to brace for next summer under the governor’s order. (See Calif. Governor Proclaims Emergency as Blackouts Loom.)
The CEC issued emergency gas generation permits and sped up battery interconnections. CAISO won FERC approval for generation needed to maintain grid reliability and kept small aging gas plants from retiring by designating them as reliability must-run resources. (See DOE Orders CAISO Emergency Reliability Measures and CEC to Issue Emergency Gas Generation Permits.)
Since late 2019, the CPUC has directed the state’s investor-owned utilities to collectively procure more than 17 GW of additional capacity, including a June order for 11.5 GW of new resources to come online between 2023 and 2026.
Under a plan issued Friday, the CPUC would direct utilities to procure up to 3,000 MW of demand- and supply-side resources for the next two summers, including up to 1,350 MW each for Pacific Gas and Electric and Southern California Edison and up to 300 MW for San Diego Gas & Electric.
“The proposal also expands existing authorization to procure additional supply-side resources such as storage, imports, and gas plant efficiencies,” the CPUC said.
The proposed decisions fall under three proceedings dealing with summer reliability, energy efficiency, and microgrids and resiliency.
One plan would also allow San Diego Gas & Electric to build four new microgrid projects totaling 160 MW to serve summer demand and would authorize PG&E to install additional temporary gas generating units.
The proposals would create a new demand response program to pay residential customers $2/kWh for reducing consumption at crucial times and would double the current rate to $2/kWh under the state’s Emergency Load Reduction Program.
A proposed smart thermostat program would provide $22.5 million in incentives for customers to adopt thermostats that can automatically reduce usage during peak hours. Dynamic-rate pilot programs would test consumer response to “rates that change rapidly during grid emergencies,” for example by shifting agricultural pumping and electric-vehicle charging to off peak times. Another program would pay consumers based on their energy savings at the meter.
CPUC commissioners plan to consider the measures at their Dec. 2 voting meeting.