The California Public Utilities Commission on Thursday adopted measures aimed at securing up to 3 GW of additional capacity through supply- and demand-side programs to prevent shortages in extreme heat waves in the summers of 2022 and 2023.
The measures include ordering the state’s three big investor-owned utilities — Pacific Gas and Electric, Southern California Edison and San Diego Gas & Electric — to accelerate procurement of battery storage and to increase production from existing natural gas plants, as well as increasing payments to demand response customers.
The CPUC projected shortfalls of 2 to 3 GW during the next two summers, but PG&E, SCE and SDG&E have already procured 1 GW in response to earlier commission decisions, President Marybel Batjer said.
“While the gap is large, I want to be clear that there is already significant procurement that can be used toward this need,” Batjer said.
Measures approved in three decisions Thursday include:
- expanding the use of a central procurement entity to ensure local reliability served by community choice aggregators and other load-serving entities;
- doubling the payment to participants in the CPUC’s Emergency Load Reduction Program to $2/kWh and paying residential customers the same rate for reducing use during grid emergencies; and
- funding a $22.5 million smart-thermostat incentive program “designed to reduce air conditioning a few degrees during emergencies” and creating pilot programs “to test the effectiveness of dynamic rates that change rapidly in response to grid emergencies.”
Other measures allow PG&E to install additional temporary gas generators and authorize SDG&E to build four new microgrid projects totaling 160 MW. (See CPUC Proposes Summer Reliability Measures.)
Since late 2019, the CPUC has directed the state’s IOUs 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. The rolling blackouts of August 2020 and energy emergencies the past two summers lent urgency to the efforts.
Thursday’s actions were taken in response to an emergency declaration by Gov. Gavin Newsom in July that said the state could face up to a 5-GW shortage this summer. A subsequent CPUC analysis found the shortage to be 3 GW at most.
The commission cited the potential for continuing high temperatures, wildfires and drought in the West as reasons for boosting the planning reserve margin in CAISO territory to 20-25% in the coming summers.
The state’s increasing reliance on solar power — which ramps down as the sun sets — adds to the challenge, the decision said.
“This perfect storm of reliability challenges requires urgent action now,” it said.
