CPUC Opens New Resource Adequacy Rulemaking

The California Public Utilities Commission (CPUC) has issued Rulemaking 19-11-009 to address the 2021 and 2022 resource adequacy (RA) compliance years, and consider changes and refinements to the CPUC’s RA program. Such refinements may include “larger structural changes” that may be needed to address the state’s increasing reliance on use-limited resources to meet reliability needs.

The prior RA proceeding (Rulemaking 17-09-020) will remain open until the CPUC issues a final decision addressing implementation of a central procurement structure. Comments on the new rulemaking are due 20 days from the rulemaking issuance date, and reply comments a week later. A prehearing conference to discuss schedule and scope is scheduled for December 16 at the CPUC.

The preliminary scope of issues for the new RA rulemaking includes:

• Refinement of RA Program Elements: Prioritizing and considering other program changes, which may include adjusting the current penalty and waiver process, counting conventions and requirements for hydro, hybrid, third party demand response, and other resources, and marginal effective load carrying capability counting conventions for solar, wind and hybrid resources.
• Local and Flexible Procurement Obligations: Identifying local capacity requirements for load-serving entities (LSEs) for the 2021-2023 RA compliance years, including consideration of how the California Independent System Operator’s local RA study process can be improved, whether LSE procurement obligations should be adjusted or waived for local areas with resource deficiencies, and the reliability criteria targeted through procurement obligations. Identifying the flexible capacity requirements for the 2021/2022 RA compliance years. Examining the inputs, processes and results of the local and flexible capacity requirement studies in order to improve the process.
• Structural Changes: Considering structural changes to the RA program and the process for identifying and addressing those structural changes. Related topics may include examination of the broader RA structure in light of increased use of use-limited resources, greater reliance on preferred resources, replacement of long-term tolling contracts, and increased prices. Potential modifications to capacity buckets, consideration of capping imports or use-limited resources. Possibility of multi-year forward local RA requirements.

For more information about Resource Adequacy issues, compliance, or the new RA rulemaking, contact ESHD attorneys Brian Biering or Andy Brown.