On July 7/30/21, Governor Newsom issued a Proclamation of a State of Emergency finding that “because of the accelerating and compounding effects of continuing wildfires, ongoing drought, and extreme heat conditions caused by climate change, California currently faces an additional projected energy supply shortage of up to 3,500 megawatts during the afternoon-evening "net-peak" period of high power demand on days when there are extreme weather conditions.”
To address the reality that there is “insufficient time or supply to install new energy storage or zero-carbon energy projects to address the immediate shortfall,” the Governor ordered a number of actions to be taken, including the establishment of a California State Emergency Program (CSEP), pursuant to which California’s investor-owned electric utilities (but could also include Publicly Owned Utilities) will pay large energy users an incentive of $0.75/kWh or $2.00/kWh, depending on the circumstances, to reduce electricity demand when “an extreme heat event, a sudden and severe reduction in transmission capacity (including reductions due to wildfire), or both, are projected to result in acute energy shortages this summer.” The CSEP incentives, as well as the utility administrative costs to operate the CSEP, will be funded by the State of California, not ratepayers. The Governor’s intent is that the CSEP will be fully implemented no later than Aug. 15, 2021 and terminate on Oct. 31, 2021 (but could be extended).
In addition to the incentive payments, CSEP participants would be allowed the “emergency use” of stationary and portable generators for the period of time “running from two hours before the beginning of the effective time of the CAISO Grid Warning or Emergency notice to one hour after the end of that effective time.” Permitting restrictions on the use of backup generators, including those by local air quality management districts, would be suspended to the extent they “restrict the amount of power that a facility may generate, restrict the amount of fuel that a facility may use, or impose air quality requirements that prevent the facility from generating additional power, for use in California,” during the specified period of time.
Contact: Ron Liebert
