California’s Resource Adequacy Program Hits Snag on Out-of-State Imports

Greentech Media

Over the past month, the California Public Utilities Commission’s effort to reform its Resource Adequacy program has hit a major snag, one centered on longstanding conflicts about how to value out-of-state imports as part of the state’s future grid capacity mix.

California has faced numerous challenges in its year-long effort to change the RA program, which sets the rules for how investor-owned utilities, community-choice aggregators and other load-serving entities contract for future generation or load-reduction capacity. These challenges include how to measure the value of all kinds of future grid resources, from the economically struggling natural-gas-fired power plants that have been closing across the state, to utility-scale solar-battery projects that are contracted for but have yet to be built.

One of the most contentious aspects of the RA debate has been over the value of imports from outside the boundaries of California grid operator CAISO. These can range from Pacific Northwest hydropower connected via the Pacific DC Intertie to a variety of fossil-fueled or renewable-powered resources from across the Western U.S.

In simple terms, the argument over imports breaks down to what rules California should use to determine whether the imports can be relied on in future years when the grid needs them the most.

Stakeholders such as the California Community Choice Association (CalCCA) have argued that import RA should retain its place as part of a diverse portfolio of resources, and that the California Public Utilities Commission’s proposed remedies would undercut that value. Other stakeholders, including CAISO but also environmental groups such as the Natural Resources Defense Council and the Environmental Defense Fund, have expressed concern that growing demand for carbon-free capacity resources across the Western U.S. could put pressure on California’s reliance on out-of-state resources and sap efforts to secure in-state resources to meet the same goals.


All of these arguments have been sidelined at present to address a much more pressing concern. On Oct. 17, the California Public Utilities Commission issued a decision (PDF) affirming its new Resource Adequacy rules for 2020. Included in the decision are new requirements for import RA that the CPUC said are needed to assure that future reliability.

But according to stakeholders, these new rules are not only legally flawed, but will also force them to renegotiate or cancel tens of millions of dollars’ worth of import RA contracts for the new year.

The firestorm over new import Resource Adequacy rules, explained

According to the community-choice aggregators (CCAs), generator groups and others, the CPUC’s decision uses a faulty legal premise to throw many existing RA contracts into doubt. CalCCA filed a motion to stay the decision, along with an application for rehearing (PDF), telling the CPUC that its decision “violates state and federal law.”

What’s worse, the CPUC’s new rules came mere weeks before the Oct. 31 deadline for load-serving entities to file their year-ahead compliance “showings” for meeting 2020 RA needs as well as a Nov. 17 deadline for RA showings for January 2020. That’s given the LSEs almost no time to absorb the changes before presenting new or existing contracts for approval.

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An Inside Look at a Groundbreaking Solar-Storage Procurement in California

Greentech Media

Early this month, three community-choice aggregators and one municipal utility serving much of California’s San Francisco Bay Area launched a 30-megawatt distributed energy storage-plus-solar solicitation. It breaks ground on multiple fronts.

First, it’s one of the largest-ever efforts to aggregate distributed energy resources (DERs) at a scale that can help California’s power grid meet its capacity needs.

Second, it’s being launched by CCAs, the city or county energy procurement entities that are taking over an increasing share of customers from the state’s investor-owned utilities — and thus an increasing share of responsibility for securing the state’s long-term clean energy needs.

Then, of course, there are the blackouts.

East Bay Community Energy, Peninsula Clean Energy and Silicon Valley Clean Energy are all served by bankrupt utility Pacific Gas & Electric, which has cut off power to millions of its customers over the past two months as part of a statewide fire-prevention regime. PG&E has warned that these blackouts could continue for another 10 years, despite its efforts to reduce their scope and scale over time. The safety threats from blackouts have outraged state lawmakers and regulators, forcing counties and cities to foot the bill for emergency services to deal with them.

And because CCAs’ interests are aligned with the cities and counties they serve, they’re positioned to act far more quickly than utilities to supply their most vulnerable customers with solar-storage systems that can help them survive blackouts. That’s important, because the CCAs want at least some of these new solar-storage systems to be in place for next year’s fire season.

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How Silicon Valley is rising to climate challenge

Mercury News

Long before Silicon Valley counties declared a climate emergency, we knew that we were facing a climate crisis. For half a century, scientists warned of the looming threat. Yet, the collective legacy of climate action leadership has been far too slow, tepid and cautious.

Policy makers have too often tinkered around the edges of the market economy hoping it would somehow respond with miraculous solutions, despite the fact that market forces in the energy sector, a system dependent and premised upon abundant and cheap fossil fuel, was a basic root cause of the problem. Perhaps, it was hoped, the consumer would demand change. But as real income shrank over the course of the same half century, consumers lacked the financial resources to purchase homes, cars, electricity, and other products and services that would reduce their carbon footprint.

The result of this folly is now upon us. Our children have organized millions of people in the Youth Climate Strike demanding that we take action now. We cannot run from rising sea levels that will soon flood our communities if left unchecked.  We cannot hide from searing heat waves that will become more intense and more frequent, nor the resulting wildfires and droughts. As they absorb more CO2, our oceans are trapping heat and becoming more acidic which imperils the largest ecosystem on earth.

Fortunately, our local power, supplied by local community choice energy agencies in Santa Clara and San Mateo counties, is now almost entirely greenhouse gas free, coming from sources like wind, solar and hydro.

Seizing the opportunity, cities across Silicon Valley, varying in size from San Jose and San Mateo, to Mountain View and Menlo Park, have shown climate leadership by adopting ordinances, including reach codes, to transition away from the use of fossil fuels in new buildings. More than 20 other cities in Silicon Valley are now exploring actions to promote the construction of all-electric new buildings, which is vitally important as buildings contribute approximately 40% of our carbon emissions.

The aim is to build future cities that feature decarbonized buildings and to challenge the market to provide the technology not wished for, but required to achieve this goal. A carbon free future is exactly what our children, our cities, and our region deserves. As local leaders, we plan on working together to make it a reality.

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Community Choice Aggregators on the Rise as an Alternative Electricity Provider

National Law Review

Community choice aggregators (CCAs) are growing in popularity as an alternative electricity provider for communities that want more local control over their energy mix. And so, financiers, CCAs and other business leaders must assess what this growth means for the electric grid, utility business models and project finance. While there’s a primary focus on California, increasing energy loads being served by CCAs and other non-utility suppliers have been trending across the country. The recent American Council on Renewable Energy (ACORE) Forum united dealmakers, policymakers and systems experts to confront the business opportunities, policy and regulatory issues, and technology challenges associated with integrating high-penetration renewable electricity on the grid.

The goal of ACORE’s 2019 forum was to advance efforts for a modernized grid that values flexibility, reliability and resilience. One important session was Community Choice Aggregation: Impacts on Project Finance and Grid Management, which was moderated by Ed Zaelke of McDermott Will & Emery and included panelists Nick Chaset of East Bay Community Energy, Daniela Shapiro of ENGIE, N.A. and Britta von Oesen of CohnReznick Capital. By and large, the CCA platform in California is considered a success and has positive momentum.

Other states are actively investigating a similar-to-California choice for customers and untangling potentially complicated matters of regulation and assessing price and controls. Though structured to provide modest discounts to customers, CCAs strive to offer a more durable value proposition in their delivery of innovative, locally focused customer programs. In fact, they’re banking on it. Rates may fluctuate over regulated utilities at some point, but with tailored programs to meet the specific needs of a customer base and their priorities, CCAs are confident in their resilience and in maintaining the vast majority of their customer base.

There’s a continued evolution on the path to 100% clean energy goals and CCAs are an integral component. As the industry develops and CCAs grow in prominence, so too will the number of parties willing to provide financing for projects with CCA offtake agreements and financing.

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California Demands 3.3GW of New Resources as Grid Shortfall Looms

Greentech Media

California regulators have approved a 3.3-gigawatt “all-source” procurement that will pit new renewables, energy storage, demand response and other clean resources against natural-gas-fired power plants in a race to meet what could be a major shortfall in grid capacity over the next four years. Thursday’s decision from the California Public Utilities Commission (CPUC) sets the stage for every utility, community-choice aggregator and third-party direct access provider in the state to secure a share of resources needed to keep the grid running during times of peak demand. The all-source procurement is technically open to existing natural-gas plants. But carbon-free alternatives are likely to be the primary beneficiary of the new opportunities opened up by the decision. Those include solar paired with batteries to shift daytime output to late afternoon and early evening, when California faces its steepest demand peaks, and demand response that shifts energy consumption away from those critical hours. But the CPUC’s decision also contains the controversial option of keeping a set of natural-gas-fired power plants open past their current 2020 closure dates, a move opposed by local environmental justice groups and clean energy advocates alike. Opponents have vowed to challenge that part of the plan with state coastal water authorities, which ordered the closure of the once-through cooling plants in the first place. Those plants use seawater for cooling, which was deemed environmentally harmful.  Under

Thursday’s decision, CCAs across the state will be responsible for roughly one-quarter of the 3.3-gigawatt procurement. Some of the largest include nearly 200 megawatts for Clean Power Alliance of Southern California, nearly 100 megawatts for East Bay Community Energy, 78 megawatts for San Jose Clean Energy, 67 megawatts for Silicon Valley Clean Energy, and about 55 megawatts apiece for Peninsula Clean Energy and Clean Power San Francisco. CCAs have already been signing new renewable energy contracts at a rapid clip. This week, the California Community Choice Association announced that its members have contracted for nearly 3.2 gigawatts of renewable power-purchase agreements, almost all of it utility-scale solar. While standalone solar doesn’t provide nearly as much capacity value as it once did, CCAs have also inked contracts for 239.5 megawatts/788 megawatt-hours of energy storage, more than half of it in the last year alone.  Of this battery capacity, 86 percent is co-located with solar that charges batteries for use later in the evening, making it potentially suitable for service as grid capacity. These contracts, as well as others that haven’t yet been counted in the CPUC’s baseline, will be eligible for meeting its new procurement targets, as long as they’re able to provide the capacity services required.

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PG&E outages prompt clean energy programs to focus on solar, batteries

San Francisco Chronicle

Facing the prospect of a decade of PG&E power shut-offs, Bay Area programs that buy energy for local communities are pushing for more solar-powered backup batteries to survive blackouts before next fire season hits.

The goal is to install batteries in around 6,000 homes and hundreds of businesses in Alameda, San Mateo and Santa Clara counties, with a focus on low-income residents and those with critical medical equipment that’s dependent on electricity.

East Bay Community Energy, which buys green energy for Alameda County, is joining with several similar programs — Peninsula Clean Energy, Silicon Valley Power and Silicon Valley Clean Energy — to ask solar companies for proposals to install battery systems in more buildings, with the programs buying the energy that’s produced.

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California’s blackouts could make fighting climate change even harder

LA Times

The state’s plans for slashing climate emissions depend on a stable electric grid delivering clean electricity to the cars, homes and businesses of the world’s fifth-largest economy. The jarring new reality of preemptive blackouts could frustrate those plans by throwing the grid’s reliability into doubt.

Government-run energy providers known as community choice aggregators, or CCAs — which now serve about one-quarter of California residents — say they could play a major role in helping homes and businesses install rooftop solar systems and batteries to protect themselves against blackouts.

CCAs don’t operate the poles and wires at the heart of the state’s wildfire crisis — that’s still the job of investor-owned utilities across most of the state. But they are responsible for electricity rates and customer incentive programs, and many of them have chosen to prioritize local energy resources.

The CCA serving Alameda County, East Bay Community Energy, recently signed a contract with the San Francisco-based company Sunrun to buy 500 kilowatts of “resource adequacy” from rooftop solar panels and batteries the company plans to install at low-income single-family and multifamily homes.

Basically, the CCA will pay Sunrun for the right to draw power from the solar-plus-storage systems. And when PG&E’s electric grid goes down during a preemptive power shutoff or other emergency, those low-income homes will be able to keep the lights on, East Bay Chief Executive Nick Chaset said.

East Bay is planning a much larger purchase of similar solar-plus-storage resources. This time, the CCA may tell potential vendors to prioritize homes most likely to have their power shut off preemptively by PG&E, or perhaps customers who depend on medical devices that run on electricity, Chaset said.

“So far, we have not seen PG&E come out and do this,” he said. “This is more in the wheelhouse of a CCA.”

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Grids and Greed: An Expert Breaks Down Where PG&E Went Wrong and What It—and California—Needs to Do Now

Mother Jones

In the wake of PG&E’s decision to cut power to over one million people in California last week, there has been a torrent of frustration, outrage, and suspicion—about who should be held accountable, what their motivations are, and whether there is a way to keep blackouts from becoming the new normal. California Gov. Gavin Newsom notably took an already damaged PG&E to task on Thursday, saying the utility company’s “greed and mismanagement over the course of decades” was to blame for the state’s aging and poorly maintained electric grid, not simply climate change. (Last year’s Camp Fire in Northern California, sparked by a PG&E power line, was the state’s deadliest on record, claiming 86 lives and the town of Paradise; the company has since filed for bankruptcy.) Then this week, state officials called for the company to issue customer rebates, which would cost it millions, and demanded PG&E executives report to an emergency regulatory meeting planned for Friday.

Beyond blame, the dark days have also set Californians searching for new solutions—from a heavier reliance on renewable energy sources to municipal power distribution to microgrids, or local community-operated energy grids that can operate and be controlled autonomously.

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California needs a new model for how power is delivered

Mercury News

Gov. Gavin Newsom ripped Pacific Gas & Electric on Thursday, calling the power shutdown that affected hundreds of thousands of Californians unacceptable.

“This is not a climate change story as much as a story about greed and mismanagement over the course of decades,” he said. “Neglect, a desire to advance not public safety but profits.”

We agree.

The question is what, if anything, is the governor going to do about it.

The governor should provide incentives for the further development of community choice aggregators (CCAs), which allow local governments to form their own energy providers and act independently from utilities such as PG&E. A half-dozen CCAs are already operating or on the verge of offering energy alternatives in the Bay Area.

CCAs aren’t perfect. But they carry the capacity to install the microgrids that can serve as a power source for cities when utilities shut off power during adverse weather conditions.

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California wants a carbon-free economy by 2045: Can floating offshore wind help it get there?

Utility Dive

Emerging floating offshore wind technologies could save California electricity customers billions in the next two decades and play a key role in achieving the state’s ambitious climate and renewable energy goals, a new report concludes. But the mechanics of floating wind remain unproven at scale and developers face multiple permitting and financing hurdles. Nevertheless, California could be where floating offshore wind (OSW) finally breaks into the U.S. market. Two California load serving entities—community choice providers Monterey Bay Community Power and Redwood Coast Energy Authority—have signed non-binding offtaker agreements with floating OSW developers.

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