State utility regulators unanimously approved revisions to local capacity and supply cushion requirements between 2023-25 to ensure sufficient electricity resources are on standby 24 hours a day when temperatures and demand spike so the lights and air conditioning stay on.
“It is critical to update our program to ensure load can be met all hours of the day,” said California Public Utilities Commission member Genevieve Shiroma during the June 23 meeting. She pointed to the changing energy landscape and increase in renewable and storage resources, shrinking gas plants, extreme weather and rising electricity demand with the electrification of vehicles and buildings.
Commissioner John Reynolds said adopting staff’s methodology looking at demand in 24-hour slices will increase the granularity of supply and demand, be more precise and fair, and align with the value of the resources on the grid today.
He noted the new complex framework does not include distributed solar and storage systems. He said the Commission’s Emergency Load Reduction Program approved last year, should first provide data on how well those behind-the-meter resources respond to grid demands.
This emergency program adopted in December, which kicks in during roasting hot days that stress the grid, allows small and large energy consumers to reduce their energy consumption to safeguard the grid. Up to 3,000 MW and negawatts, including from homes, can participate in the program run by Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric for five years. Participants will be paid $2 per kilowatt-hour saved. Low-income and disadvantaged homes are automatically opted in.
Thursday’s new local capacity decision adopts the California Independent System Operator’s findings that next year, 25,450 MW of local capacity across the state is needed to safeguard reliability, 23,904 MW in 2024, and 24,221 MW in 2025. Those annual numbers are the total capacity deemed needed in nine regions of the state from Humboldt to San Diego. The lowest capacity need is in Humboldt at 141 MW next year, 143 MW for 2024, and 144 MW for 2025. The highest needs are in the Los Angeles Basin and Greater Bay Area, at 7, 312 MW for the Bay area in 2023, 7,369 MW in 2024, and 7,424 MW in 2025.
The new decision also incorporates CAISO’s assessment of flexible capacity needs, which is the maximum monthly demand for a three-hour stretch, which ranges from a low of 19, 034 MW in July to a high of 24,732 MW in November.
The decision also calls for a minimum 16% planning reserve margin for next year and 17% for 2024.