California regulators order major IOUs to collectively procure at least 1,000 MW of demand- and supply side resources

The commission said that its decision requires the state’s major investor-owned utilities to collectively procure at minimum 1,000 MW of demand- and supply side resources for this summer

The California Public Utilities Commission on March 25 said that it has ordered utilities to implement a suite of programs to decrease energy demand and increase energy supply during critical hours of the day to ensure reliability in the case of an extreme heat event in summer 2021 and 2022.

The commission said that its decision requires the state’s major investor-owned utilities to collectively procure at minimum 1,000 MW of demand- and supply side resources for this summer. The commission noted that more than 500 MW in supply side resources have already been contracted for at the direction of a previous decision. The March 25 decision will activate about 500 additional megawatts in demand-side resources by this summer, the commission said, adding that by summer 2022, demand-side resources are expected to increase in total to nearly 1,000 MW by way of its decision.

Beyond the new resources being developed through the March 25 decision, another 2,000 MW of battery storage will be ready to serve the grid next summer and more than 8,000 MW of clean energy resources are already under development to be online over the next three years, the commission said.

CPUC President Marybel Batjer said in the statement: “We are mobilizing the resources required to avoid a repeat of last year’s outages and to better protect the safety and wellbeing of Californians for this summer and next. The acceleration of climate change and the increased intensity and frequency of the extreme weather events we have experienced in California in recent years necessitate a portfolio of solutions to ensure we are prepared for various scenarios.”

The commission said that its decision is the most recent action in a proceeding that it opened in November 2020 in response to the mid-August 2020 extreme heat event that required the California ISO to initiate rotating power outages to prevent sustained, widespread service interruptions.

The commission noted that in January, it, the ISO, and the California Energy Commission issued a final Root Cause Analysis on the August 2020 rotating outages, recommending, for instance, expediting the regulatory and procurement processes to develop additional resources that can be online by 2021.

The commission said that the new initiatives and enhancements to existing programs include ordering Pacific Gas and Electric (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E) to pilot an Emergency Load Reduction Program (ELRP) that would give demand response providers and other companies providing new services to manage electricity demand, the ability to demonstrate how their innovative programs can support the grid.

As noted in the proposed decision of an administrative law judge that the commission voted on on March 25, the purpose of the ELRP is to allow the large electric investor-owned utilities (IOUs) and the ISO to access additional load reduction during times of high grid stress and emergencies involving inadequate market resources, with the goal of avoiding rotating outages while minimizing costs to ratepayers.

The initial duration of the ELRP pilot program will be five years, 2021-2025, with years 2023-2025 subject to revision in a DR application proceeding that is expected to begin in November, the filing noted.

The commission said in its statement that it also ordered utilities to modify their critical peak pricing programs, which charge a higher price for electricity consumption during peak hours on selected days. The commission said that it ordered several modifications to the Critical Peak Pricing programs to ensure that the program is more effective and responsive to the critical hours of a grid emergency, including shifting the Critical Peak Pricing event window for residential and non-residential customers to the hours of 4 p.m. to 9 p.m., increasing the maximum number of Critical Peak Pricing events allowed per year, and providing customer education with a focus on increasing participation.

Among other things, the commission said that it also reinstated the Flex Alert paid media program to educate consumers about the positive impacts of conservation, help customers understand grid conditions, and inform customers of the need to conserve when energy demand is high.

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About Corina Rivera-Linares 3269 Articles
Corina Rivera-Linares, chief editor for TransmissionHub, has covered the U.S. power industry for the past 16 years. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines. She can be reached at clinares@endeavorb2b.com.