CPUC Focused On Addressing Summer 2022 And 2023 Electric Reliability

State energy agencies have forecasted a shortage in electric supply capacity to meet peak summer loads in the summers of 2022 and 2023. To avoid the kind of power outages experienced in August 2020, and in response to Governor Newsom’s July 30, 2021 State of Emergency Proclamation, the California Public Utilities Commission (CPUC) is looking for new ways to decrease demand and increase supply in the near future.

Three proposed decisions, issued after expedited proceedings focused on demand and supply-side resource solutions, microgrid development, and energy efficiency measures, are available for comment and likely to be voted on at the CPUC’s December 2, 2021 business meeting. Briefly:

Demand and Supply Side Actions

The Proposed Phase 2 Decision Directing Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE) and San Diego Gas & Electric Company (SDG&E) to Take Actions to Prepare for Potential Extreme Weather in the Summers of 2022 and 2023 adopts several demand and supply-side requirements to ensure reliability to meet power demand during summer peaks in 2022 and 2023.

• Demand-side changes include:
  • Expansion and modification of the Emergency Load Reduction Program (ELRP), including an increase in compensation rates and addition of an option for residential customers to participate.
  • Allowing aggregation of electric vehicle to grid charging/discharge to support the grid at net peak.
  • Leveraging the Flex Alert media campaign to support existing and new programs.
  • Changes to each of the large IOUs’ existing demand-response programs.
  • Approval of a large smart thermostat incentive program.
  • Pilots to test the effectiveness of dynamic rates that change rapidly in response to grid emergencies.
• Supply-side changes include:
  • Allowing energy storage projects that are not fully deliverable as long as they provide peak and net peak grid reliability benefits in summer 2022 or 2023.
  • Expanding use of a centralized procurement entity (CPE) to procure reliability resources located in local areas.
  • Encouraging accelerated on-line dates for integrated resource planning procurement already authorized.

Microgrids and Resiliency Solutions

The Proposed Decision Adopting Microgrid and Resiliency Solutions to Enhance Summer 2022 and 2023 Reliability authorizes a number of projects and resiliency measures proposed by the large California investor-owned utilities, and other actions, including:

• Pacific Gas and Electric Company (PG&E) is instructed to expand its Temporary Generation Program for filling system capacity shortfalls anticipated in the summers of 2022 and 2023. PG&E’s implementation filing will include a description of how PG&E will use renewable diesel and/or hydrotreated vegetable oil “to the maximum extent possible” to avoid environmental impacts caused by diesel generators.
• San Diego Gas & Electric Company (SDG&E) is authorized to procure up to 4 circuit-level energy storage microgrid projects providing a total of 160 MWh of capacity to fill system capacity shortfalls and provide peak and net peak grid reliability benefits in the summers of 2022 and 2023.
• Los Angeles County is encouraged to propose its Eastern Avenue Emergency Operations Battery Storage project, an LA Department of Public Health Solar/Battery Storage project, and Pitchess Detention Center Solar/Battery Storage projects within the existing CPUC Microgrid Incentive Program.

Energy Efficiency

The Proposed Decision on Energy Efficiency Actions to Enhance Summer 2022 and 2023 Electric Reliability will approve $185 million in additional funding for energy efficiency programs in 2022 and 2023, while also allowing electric utilities to shift funding between programs to address summer reliability needs. Specifically, the funding would go to:

• A new 2-year $150 million market access program to reward peak and net peak demand savings in residential and commercial buildings.
• An additional $30 million statewide for third-party solicitations to reduce peak and net peak demand.
• Authorization for Marin Clean Energy to shift funds to enhance its Peak FLEX program, which will serve as the model for other market access programs.
• $5 million in additional funding for the Tri-County Regional Energy Network to expand its Energy Assurance Program to additional counties.

To enable rapid implementation, the Proposed Decision recommends allowing single-stage solicitations to third party providers, and streamlining CPUC staff review of projects.

Comments on the Demand/Supply-Side and Microgrid proposed decisions are due November 10, reply comments November 16.

Comments on the Energy Efficiency proposed decision are due November 18, reply comments November 23.

All of the proposed decisions are expected to be on the agenda for the CPUC’s December 2, 2021 business meeting.

Contact: Lynn Haug or Andy Brown