Around every two years the CPUC creates a new rulemaking in its series of proceedings evolving Resource Adequacy (“RA”) rules. The most recent was adopted on October 6th as Rulemaking (“R.”) 21-10-002 which continues the Commission’s oversight of the RA program, considers broader structural reforms to the program, and establishes forward RA procurement obligations for LSEs starting in 2023. The CPUC received comments on the initial scope on November 1st and reply comments were filed on November 10th. On December 2nd, the Commission released a Scoping Memo and Ruling. The prior RA Rulemaking, R.19-11-009, remains open but is expected to close after addressing a petition for modification.
The new RA proceeding will be divided into two simultaneously evaluated tracks; the Implementation Track, which will be sub-divided into three phases, and a Reform Track.
Implementation Track – Phase One
Phase One will consider critical modifications to the Central Procurement Entity (“CPE”) structure and, subject to any scheduling delays, is expected to conclude by March 2022. Issues for consideration include: implementation details of the “shown” resource component of the hybrid framework, whether CPEs should be allowed to procure local resources outside of the annual all-source solicitation process, changes to the CPE timeline, and potential modifications to the requirement that SCE and PG&E bid their own utility-owned generation at their levelized fixed costs. Issues left unaddressed will carry over to Phase Two.
Implementation Track – Phase Two
In Phase Two, the Commission will consider flexible capacity requirements for the following year, local capacity requirements for the next three years, and the “highest priority refinements to the RA program.” These high priority refinements include adoption of 2023-2025 local capacity requirements, adoption of the 2023 flexible capacity requirements, modifications to the planning reserve margin, and evaluating qualifying capacity counting conventions (including proposals from the demand response working group report, the behind-the-meter hybrid working group, the supply side demand response working group, and the Energy Division’s biennial update to the ELCC values for wind and solar resources). Phase Two is expected to conclude in June 2022 to give jurisdictional LSEs and the CPE adequate time to meet procurement requirements.
Implementation Track – Phase Three
Phase Three will consider the 2024-2026 local RA requirements and the 2024 requirements for flexible RA. The schedule will be established in a later Scoping Memo.
Reform Track
The Reform Track picks up on R.19-11-009’s direction to examine the broader RA capacity structure given the increasing penetration of use-limited resources, greater reliance on preferred resources, and the increases in energy and capacity prices in California. This examination has been taking place through a restructuring proposal based on PG&E’s “slice-of-day” proposal where several workshops have been held to develop implementation details for structural elements, resource counting, need determination and allocation, etc. The Reform Track will consider a final proposed framework and require the Workshop Report to be submitted in February of 2022.
Contact: Andy Brown and Jessica Melms
