Central Power Procurement Pitch Applauded

During another meeting of state energy regulators and policymakers about how to ensure reliability in an energy landscape where investor-owned utilities are steadily losing ground, a former federal energy regulator recommended against myopically focusing on resource adequacy.

“It does not need to be the tail that wags the dog,” said Pat Wood, the Federal Energy Regulatory Commission chair during the 2000-01 energy crisis, at a June 22 En Banc on Customer Choice.

The California Public Utilities Commission has been grappling with supply cushion parameters, particularly for community energy and direct access providers. State energy regulators are seriously considering creating a centralized procurement authority to ensure grid reliability in California.

Last week, CPUC President Mike Picker said the time was ripe for multi-year procurement and a central purchaser because of the growth of community choice aggregators and direct access providers. They have been unable to enter adequate power supply contracts to assure local resource adequacy.

A central buyer, presumably the California grid operator, would be charged with taking over and divvying up the investor-owned utilities’ pricey long-term renewable contracts they signed years ago. It also would enter resource adequacy deals to satisfy state requirements.

Wood, who hails from Texas, said he was “fascinated” by California having a centralized procurement authority for legacy utility contracts and future resource adequacy and renewable deals.

He also embraced full retail choice for Californians as a means of lowering energy bills. “Put me down for full freedom,” Wood drawled.

Community choice aggregator representatives pushed back against Picker’s steady refrain, repeated again at the end of last week, that another energy crisis is on the horizon because community energy is undermining the state’s energy market.

“CCAs are an integral part of the California Legislature’s plan to prevent a major breakdown in our energy market and meet the state’s climate change goals,” said Kate Sears, Marin County Supervisor and a member of the Marin Clean Energy Board. “CCAs are performing as intended – providing reliable, affordable and clean energy to local customers and delivering innovative programs that address both local needs and state goals.”

CalCCA Executive Director Beth Vaughan insisted that the CPUC’s stance was rooted in “protecting and expanding” the commission’s role and not about solving energy market issues. — Elizabeth McCarthy

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Central Power Procurement Pitch Applauded

William J. Kelly

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