CalCCA Calls for Resource-Adequacy Reforms in Wake of Outages

California Energy Markets

Tight power supplies during a recent heat wave indicate an urgent need to reform the existing resource-adequacy rules in California, the California Community Choice Association told Gov. Gavin Newsom.

CalCCA sent a letter to Newsom Sept. 9, after rolling blackouts caused by inadequate energy capacity on the system.

“As the root causes of the extreme emergency events are revealed, they may point directly to solutions necessary to mitigate the risk of repeating similar events in the future,” CalCCA Executive Director Beth Vaughan said in the letter. “Even without certainty regarding those causes, however, California can begin now to take steps to increase reliability through action in the regulatory, legislative, and federal arenas.”

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New Bay Area Partnership Could Increase Grid Resilience

California Energy Markets

A new grid storage program rolling out across the San Francisco Bay Area could increase community resilience to blackouts and decrease a power provider’s resource-adequacy obligations, but regulatory uncertainty remains, speakers said during an Aug. 28 webinar.

The program, Power On Peninsula, is one of three being implemented through a 10-year contract between three California community choice aggregators and solar developer Sunrun, a representative from Peninsula Clean Energy said during the webinar hosted by the California Community Choice Association.

In addition to PCE, community choice power providers East Bay Community Energy and Silicon Valley Clean Energy also signed agreements with Sunrun (see CEM No. 1601). Collectively, the solar company will install up to 20 MW of residential solar power for around 6,000 households. The program is the result of a joint solicitation issued in November 2019.

It will also allow PCE to modify its load, decreasing the “duck curve” by dispatching storage capacity during peak load hours, Peter Levitt, associate manager of distributed energy resources strategy with PCE, said during the webinar. Under the agreement, PCE will pay Sunrun to continually discharge energy storage from the company’s distributed residential and multifamily solar-plus-storage systems in the 4 p.m. to 9 p.m. window, when PCE’s peak load traditionally hits, in order to create a permanent load shift to the evening hours.

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How to Reform California’s Inadequate Resource Adequacy Regime

Greentech Media

California’s heatwave-driven rolling blackouts last month, and the threat of more to come, have focused state political leaders and energy regulators on how to fix the California Public Utilities Commission’s resource adequacy (RA) program, the state’s primary tool to ensure grid resources to meet peak demands.

After nearly two decades of incremental changes, it’s becoming clear that RA may be unsuited for the state’s increasingly clean-powered and battery-backed future grid.

The CPUC’s decision this year to centralize local RA procurement with utilities to try to reduce market power problems has also undermined CCAs’ ability to earn money from locally procured behind-the-meter assets. And the CPUC’s new requirements on import capacity, meant to increase visibility into what out-of-state resources are being relied upon, were opposed by CCAs on the grounds that they undermine existing contracts.

More radical options for restructuring are also in discussion. Most notable is a proposal from the state’s only electric-only utility, Southern California Edison, and backed by CalCCA, the trade group representing the state’s CCAs, that would essentially rebuild RA from a “bottom-up” approach.

That’s because the SCE-CalCCA proposal would move away from today’s “top-down” assessment of RA needs which then splits them up amongst individual LSEs. In a state with dozens of CCAs, that’s “no longer sufficiently accurate to ensure reliability,” the proposal says.

Instead, it envisions each LSE building its own “load duration curve,” or forecast of loads for every hour of every month, and then combining them to yield a system-wide set of requirements. That’s a far more accurate way to determine “system needs as California transitions to an electrical grid with 100 percent of retail sales served by zero-carbon resources,” Eric Little, SCE’s wholesale market design manager, said in an email.

To help solve the “net peak” problem, SCE and the CCAs propose subtracting the contribution of solar and wind resources to each hour of each day.

“We are moving to what we now call a net peak load,” said Beth Vaughan, CalCCA’s executive director, or a measure of reliable capacity that’s “more honest” than the systems now used by RA, such as “effective load carrying capacity,” that attempt to estimate the average capacity value of renewables that can’t be dispatched.

“This is a big paradigm shift, and we’re not going to get there overnight,” CalCCA’s Vaughan said. The example of last month’s heatwave highlights the need for getting started now.

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Bay Area is fighting the real blackout culprit – climate change

Mercury News

This is a trying time for the Bay Area. After struggling for more than five months through a pandemic, economic recession and social unrest, we are now confronted with an unprecedented onslaught of wildfires and record heat.

While some rhetoric blames the rolling power outages on the State’s transition to clean energy, the real culprit is a changing global climate. The only remedy remains the very same emission-free electricity that we and others have been working hard to add to the power grid.

As long as we keep releasing harmful greenhouse gas emissions, conditions like those we are experiencing now will only get worse. According to the Santa Clara County Office of Sustainability, the County is projected to have 15 additional extreme heat days on average annually by 2050 and as many as 45 by 2100. All the while, the bitter reality remains that the burden of extreme heat falls disproportionately on low-income residents and communities of color.

Bay Area Community Choice Energy agencies, also known as Community Choice Aggregators (CCAs), are taking comprehensive action to achieve our climate goals and improve local resilience. While our agencies were formed to serve our local communities, we are also working on solutions to help transition to a cleaner, more reliable power grid statewide.

Just as Californians have come together to address the coronavirus and social inequities, we need to come together to rethink how we respond to the extreme weather that is challenging an electricity delivery system that was built for the last century. Today, we need a multi-pronged approach to transition to a carbon-free grid. We need long-duration storage to allow for 24/7 renewable power. We need to change how we use electricity through smarter appliances and buildings and continue to empower consumers to use energy wisely.

Last week’s events showed that asking for voluntary conservation helps. It is truly impressive that so many residents curtailed their electricity usage during a heatwave. However, this was still a challenge for many that was compounded by unhealthy air quality that precluded opening windows to cool off overnight.
But conservation is just one tool.

Adding more storage onto the grid would help ensure greater reliability when using intermittent clean resources such as solar and wind. Our broader network of five Bay Area agencies have already procured nearly 500 megawatts of battery capacity that will come online over the next several years, with that figure likely to rise in the coming months.

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California’s three big utility companies stand in the way of consumer choice

San Francisco Chronicle

“With great power comes an even greater electricity bill.”

— Anonymous

One planet, dozens of cities and 10 million Californians collectively benefited during the past decade from the creation of community choice aggregators, or CCAs, in local communities throughout the state.

More commonly known as community choice energy programs, locally controlled CCAs give residents and businesses the ability to select greener, renewable sources of electricity often at a lower cost than provided by California’s three investor-owned utilities: Pacific Gas and Electric Co., San Diego Gas & Electric Co., and Southern California Edison.

In recent weeks, Californians have endured a heat wave, rolling blackouts, lightning storms and more than 500 wildfires, making clearer the imperative to confront our existential threat of climate change by embracing the clean energy future that CCAs enable.

CCAs aren’t just good for the Earth, but good for the pocketbooks: as nonprofit local agencies, they can secure better deals for their ratepayers by prudently managing their portfolio and keeping operating costs low, and they avoid the burden of compensating shareholders and C-suite officers. If utility executives and investors continue to have their way, however, recession-battered ratepayers could endure rapidly escalating bills in the months ahead. By approving hikes of an obscure exit fee charged to customers, state regulators have shifted hundreds of millions of dollars in the utilities’ costs to local residents and businesses. In theory, this exit fee, known as the Power Charge Indifference Adjustment, ensures that CCA ratepayers bear their fair share of the more expensive electricity supply contracts that utilities signed on their behalf many years ago. As ratepayers leave those investor-owned utilities to join CCAs — the logic goes — they shouldn’t saddle PG&E, San Diego Gas & Electric and Southern California Edison and their remaining customers with the entire burden of those costly legacy contracts.

In practice, however, exit fees hardly resemble a fair share.

Since 2013, exit fees have risen more than 600% in the PG&E service area, all for the financial benefit of a criminally convicted and chronically mismanaged utility. It will increase another 35% this fall, boosting an average customer’s exit fee in PG&E’s territory to $220 annually. PG&E is hardly unique; San Diego Gas & Electric recently proposed a larger increase to its exit fee this fall, and we’ve seen similar increases in Southern California Edison’s territory as well.

Exit fees lack guardrails. The fees adjust annually through the California Public Utilities Commission’s regulatory process, based upon opaque cost data provided by — wait for it — the big utilities. Those same utilities have blocked CCA efforts to obtain their cost data, even though that information underlies every commission rate-making decision, and even after PG&E was caught committing hundreds of millions of dollars in “calculation errors.”

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Marin Clean Energy earns new, higher investment grade credit rating from Fitch Ratings

Public Power Daily

Fitch Ratings on August 25 assigned a ‘BBB+’ Issuer Default Rating to Marin Clean Energy (MCE), an upgrade of the California community choice aggregator’s previous rating of BBB.

Among the reasons for the upgrade are MCE’s increase of available cash on hand from 80 days to 160 days, as well as almost doubling MCE’s available liquidity over the past year.

The BBB+ rating takes into consideration MCE’s strong financial profile and successful management of its load during COVID-19 shifts.

MCE noted that it was the first CCA to receive an investment-grade credit rating, with a Baa2 Issuer Rating issued by Moody’s in May 2018, as well as the first to receive a second from Fitch Ratings in August 2019.

Fitch’s upgraded investment-grade credit rating generally reflects the ability of MCE to meet its financial obligations. MCE has no direct debt outstanding.

The rating also reflects MCE’s Board decision made in November 2019, to increase reserves of cash onhand to 240 days.

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Ensuring a power-grid backup avoids setbacks when PSPS events return

Marin Independent Journal

Wildfires have become a familiar threat for Marin County. Both city officials and local utility companies are trying to avoid a recurrence of the devastating past few years.

Public safety power shutoff events were put into place to prevent the electric utility infrastructure from starting wildfires but left thousands of Marin residents without power. It seems we are set to experience more PSPS emergencies this year. Unfortunately, much of the momentum to deploy solutions that offset the shuttoffs, such as the installation of backup energy storage systems, have been derailed by the coronavirus pandemic.

So, what can homeowners do to protect themselves and be fully resilient this fire season? Think about the best ways to generate energy and store it, then find a combination that makes the best sense for you. For minor, occasional outages, small storage systems would suffice. But for prolonged outages, you need a way to refill the batteries.

Renewable energy from solar is incredibly reliable and, in many cases, cheaper than utility power. Adding solar and storage creates a system that, if sized appropriately, could power your basic needs indefinitely.

Marin County has been an active proponent of solar energy for years, spearheaded by MCE (formerly known as Marin Clean Energy) installing 31 megawatts of solar power. Marin County was even the first in the state to enroll its entire county into Marin Clean Energy’s program. But solar panels are not enough on their own to power a home. Solar panels only produce energy when the sun is shining and won’t work when the grid is down.

Energy storage systems, which is a sophisticated battery, store excess solar energy generated on your roof during the day and allow you to use it when the sun is unavailable or when the grid is down.

We call this grid independence.

Historically, the high cost of home batteries deterred homeowners from purchasing, but battery prices have dropped by roughly 80% over the past five years. Marin County residents are further incentivized through property assessed clean energy programs (PACE), which offers financing on home energy systems. Although budgets for initiatives like PACE and investment tax credits are available, they won’t last for much longer. Systems purchased and installed in 2020 are receiving the maximum credit available, but these credits will decline next year.

These incentives are a timely resource in the face of shelter-in-place mandates and PSPS but require us to use them to truly realize the benefits of battery storage and grid independence, or they may disappear.

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Here’s how California can keep the lights on while meeting its clean energy goals

LA Times

Even before California’s rolling power outages threatened to become a full-on crisis in the last few days, long-standing critics of the state’s aggressive push into renewable energy were sharpening their knives.

Solar power, they said, had failed California, never mind that state officials never expected the sun to keep shining into the night.

The Wall Street Journal’s famously conservative editorial board was particularly gleeful Sunday, calling brief blackouts the previous two evenings “a warning to the rest of America about the risks of Green New Deal policies.” President Trump echoed the theme Tuesday, tweeting that the “Bernie/Biden/AOC Green New Deal plan would take California’s failed policies to every American!”

The president of California’s power grid operator, Stephen Berberich, dismissed those types of criticisms, saying renewable energy wasn’t to blame for the outages. The real problem, he said, was a statewide failure to assemble the right mix of energy sources for the completely predictable situation of electricity demand staying high after the sun goes down.

Although the exact causes of the blackouts are still up for debate — some critics have blamed the California Independent System Operator for poor management of energy markets — there’s no question that lining up enough power on hot summer evenings is one of the main challenges California must confront as it continues to phase out fossil fuels.

Fortunately, experts say, there are many possible clean energy solutions.

Last year, the California Public Utilities Commission ordered utilities to add 3,300 megawatts of new power capacity, most of which is expected to be big batteries connected to the power grid. But that’s a small fraction of what the state may ultimately need.

California celebrated a milestone last year with the completion of its 1 millionth small solar system, primarily rooftop installations. Now clean energy advocates want the state to pursue 1 million small batteries.

The end goal is for networks of far-flung solar panels and storage systems to operate as “virtual power plants” that can help electric utilities meet demand, including during heat waves. Homes and businesses would sign up for programs in which they’d agree to occasionally discharge their batteries in unison when called upon, in exchange for financial compensation.

“It takes the Flex Alert and puts it on speed,” said Bernadette Del Chiaro, executive director of the California Solar and Storage Assn., a trade group. “It’s not just, ‘Turn off your lights and set your thermostat to 78.’ It’s do those things and give us 5 kilowatt-hours from your battery in your garage. And we’ll pay you for it.”

Several government-run energy providers in the San Francisco Bay Area have plans for one of the largest virtual power plants yet. But Del Chiaro said big utility companies and state regulators, including the Public Utilities Commission and the Independent System Operator, are biased toward traditional power plants and have mostly failed to embrace the concept.

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How local energy providers are ensuring energy resilience


In the past month, I have passed two wildfires on the side of the freeway. That’s now life during California summers. As the pandemic rages on, limiting people’s movement, the prospect of another year of public safety power shutoffs — the utility program that preemptively shut down power to Californians last summer to avoid wildfires — is scary.

Many smart people have been working hard on this problem. Energy providers across California — from local utilities to massive investor-owned utilities (IOUs) — have been tasked with cracking the energy resilience code.

As the west begins to burn, how are those efforts going?

Community choice aggregators (CCAs), programs that allow cities or counties to buy energy for their residents, are a bright spot for energy-resilient offerings.

Last week, three San Francisco Bay Area CCAs — East Bay Community Energy (EBCE), Peninsula Clean Energy and Silicon Valley Clean Energy (SVCE) — announced a partnership with Sunrun to install roughly 20 megawatts of solar with a battery backup on up to 6,000 households n danger of getting their power shut off. The CCAs all have carveouts for low-income customers to ensure this program serves all communities.

The announcement comes two months after Marin Clean Energy, a CCA in Northern California, launched a program to install 15 megawatt-hours of customer-sited energy storage. San José Clean Energy and Peninsula Clean Energy issued a request for offers for similar energy-plus-storage programs to serve their customers.

While both California utilities and CCAs are tasked with finding resilience solutions, the CCAs are the first to offer solar-plus-storage programs to their customers.

According to the CCAs, this is because local utilities work in and for the community.

“SVCE is a community-based organization,” Aimee Gotway Bailey, director of decarbonization and grid innovation at SVCE wrote in an email. “Our community formed us and governs us. That means we’re well-positioned to be responsive to what our community needs. The resilience program we just launched is a testament to that.”

Our community formed us and governs us. That means we’re well-positioned to be responsive to what our community needs.

JP Ross, EBCE’s director of local development, electrification and innovation, echoed that sentiment in a phone conversation. “We’re not responsive to shareholders; we’re responsive to our community,” he said.

CCAs are also in a better position to aggregate behind-the-meter resources as part of a procurement plan for resource adequacy — in other words, they can better monetize the new energy resources when there aren’t outages to shave peak loads.

“Local utilities are leading because there aren’t other organizations in as natural position to lead,” Mark Dyson, principal of Rocky Mountain Institute’s electricity practice, wrote in an email. “[They] are the ones that can enable the ‘blue sky’ benefits of [distributed energy resources, or DERs], and most effectively integrate DERs’ ‘black sky’ benefits with existing resilience planning activities.”

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Inside Clean Energy: What’s a Virtual Power Plant? Bay Area Consumers Will Soon Find Out

Inside Climate News

East Bay Community Energy, Peninsula Clean Energy and Silicon Valley Clean Energy have announced that they are working with the solar company Sunrun on a program that will give discounted solar panels and battery storage systems to up to 6,000 households and businesses.

The systems will have two purposes: Providing renewable backup power to those customers, and also enabling them to band together when needed to send electricity out to the grid, with up to 20 megawatts of battery capacity.

Another term for this kind of system is a “virtual power plant,” and anyone who’s been reading me for a while knows that I geek out at the potential of virtual power plants to make the electricity system cleaner and more reliable.

Sunrun, based in San Francisco, is the country’s largest installer of home solar and batteries. This would be the largest virtual power plant that Sunrun has ever created and one of the largest by any provider in the country.

“What I think is really cool is that a single system, a rooftop residential solar-plus-storage system, will get installed in a day or two and then we’ll immediately be providing direct benefits to the household where we installed it,” said Nicholas Smallwood, Sunrun’s vice president of business development.

“As we install more and more and more to the larger area, we can link them together and provide benefits to the larger area without having to wait for a single large asset to be built like you do with utility scale,” he said.

This latter benefit is one of the big selling points for the Bay Area electricity providers. They plan to use the combined capacity of the batteries in their planning to maintain the grid’s reliability. This means there would be less of a need to rely on natural gas plants and other resources.

“This is the way that utilities and specifically electric service utilities should be engaging in the push for mitigating climate change,” said J.P. Ross, senior director of local development for East Bay Community Energy.

Access to backup power is a big deal because of wildfire risk. Pacific Gas & Electric last year started conducting massive planned blackouts to reduce the risk of sparks from electricity equipment, leaving many East Bay Community Energy customers in the dark.

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