Excerpted from an article by Herman Trabish, Utility Dive, February 22
California is conducting what may be the most ambitious electricity customer empowerment experiment ever done anywhere; whether it will work remains very much in doubt.
The state is the national leader in both utility-scale solar and distributed solar capacities and fourth in the nation in wind capacity. Yet California’s dominant investor-owned utilities (IOUs) procured zero new MW of renewable energy capacity in 2017. And a preliminary plan released in January by state regulators proposes almost no 2018 procurement.
But the failure of procurement is just the symptom. The problem is widespread power sector uncertainty causing what one key observer called an “upheaval.” The disruption does not support California’s goals to cut its greenhouse gas emissions 40% below 1990 levels by 2030 and achieve its 50% renewable energy by 2030 mandate. And it threatens the stability of utility-scale renewable energy builders.
Efforts to resolve the problem have, however, been stymied because the state’s regulators and factions representing utility-scale renewable energy developers are sharply at odds over its urgency.
California’s successful transition to renewables is one cause of the current upheaval. It has left the state with midday solar over-generation and a sharp, difficult to manage demand spike in the late afternoon and evening.
Key recent developments include PG&E’s decision to shutter the state’s last nuclear power plant, Diablo Canyon, by 2025, and the rise of community choice aggregation (CCA). CCA entities were authorized by a 2002 law to act as load serving entities (LSEs) and take on IOU customers. Active CCAs now serve 660,000 California electricity customers. And cities and counties with populations totaling more than 15 million people are considering the move, according to the CPUC. All of the above are considered contributing factors to the overall problem.
CCAs Marin Clean Energy, Lancaster Choice Energy, Sonoma Clean Power and Peninsula Clean Energy have a total of nine wind and solar contracts. Between 2018 and 2021, they expect to add 768 MW of new wind and solar capacity to the 2.4 GW built by the state’s IOUs.
Nancy Rader, Executive Director of the California Wind Energy Association, said the CPUC needs to act to prevent utility customers from “missing out” on savings of as much as “$444 million annually” that would come from procuring for post-2020 electricity needs before the federal tax credits for wind and solar expire.
For his part, CPUC President Michael Picker said the state is “dealing with the consequences of success.” Though the procurement slowdown is hard on some developers, the commission’s job is not “economic development,” he said. “It is to meet state electricity needs, and the closure of Diablo Canyon in seven years does not create a present need.” The present challenge is to affordably integrate renewables, despite lowered overall demand and higher peak demand, he said. “More renewables does not address that.”
[...] A solution to the upheaval has so far been prevented by the basic differences between renewable energy advocates and California’s regulators.
“We may need a new oversight mechanism that the CCAs will accept,” V. John White, Executive Director of the Center for Energy Efficiency and Renewable Technologies (CEERT), told Utility Dive.
“They are going to need to coordinate with each other because they are state LSEs and local considerations are not the only ones,” he added. He also signed the letter to Gov. Brown.
The original CCA legislation may need reconsideration because it has had unintended consequences, he said. It did not envision them becoming a statewide avenue for climate activism at the local level. And state level oversight that CCAs accept could allow the state to help with some of their startup challenges.
Former CPUC staffer Matthew Tisdale, now executive director for California think tank Gridworks, said CCA obligations to compensate the IOUs for departing load and to cooperate with state regulators will soon be formally clarified. That will resolve this “transitional upheaval” and restart procurement, he said. Until then, “it is prudent for the commission to be cautious.”
Gridworks’ Tisdale added that the “real story” is that “the most progressive regulatory commission in the world decided the state has enough renewables to take a minute and understand how the system is developing before it turns any more cranks.”
Original article: https://www.utilitydive.com/news/customer-empowerment-upheaval-forces-california-into-hold-on-renewables/517329/