Per statutory authority conveyed to it last year in Assembly Bill 1373 (AB 1373), the California Public Utilities Commission (CPUC) has made an initial determination in Decision 24-08-064 that California needs up to 10.6 gigawatts (GW) of new long lead-time (LLT) resource procurement, including up to 7.6 GW of offshore wind (OSW), 1 GW of geothermal, up to 1 GW of multi-day long-duration energy storage (LDES), and up to 1 GW of LDES with a discharge period of at least 12 hours. The selected resources were chosen because they “present opportunities to help California achieve our greenhouse gas emissions reduction goals for 2045 and beyond, they represent emerging technologies that need to achieve economies of scale to bring costs down, and/or they are not currently being procured by individual LSEs [load serving entities] in significant enough amounts to achieve cost reductions, meet long-term environmental goals, or increase resource diversity.”
With the CPUC’s need determination complete, AB 1373 calls for the CPUC to request that the California Department of Water Resources (DWR) initiate centralized procurement of the identified resources. Per the CPUC’s recommended schedule, DWR will complete preparatory activities in 2024-25, in consultation with the CPUC staff and a procurement review group. Sequenced solicitations will then be conducted in the 2026-2030 timeframe. Authorized quantities in each solicitation may be adjusted by DWR. Results of each solicitation will be brought to the CPUC for reasonableness review and approval of proposed costs and contract terms.
LSEs will not be permitted to opt out of their share of authorized centralized procurement. Costs and benefits will be allocated to all jurisdictional LSEs, and non-jurisdictional publicly-owned utilities may opt in to allow their customers access to energy from LLT resources. Recognizing that LLT resources, particularly OSW, require long-range planning for supporting transmission and other infrastructure, the decision indicates that the CPUC will address the OSW need determination in its upcoming 2025-2026 transmission planning process recommendations to the California Independent System Operator.
Contact: Lynn Haug or Chase Maxwell
