Moving to shore up reliability of the state\u2019s electricity supply, the California Public Utilities Commission June 21 adopted local procurement obligations for 2008 for investor-owned utilities and other regulated load-serving entities. Under regulators\u2019 resource adequacy policy, the decision aims to ensure that the California Independent System Operator has adequate capacity available to maintain reliable grid operations and prevent bottlenecks in constrained transmission zones such as Path 26 in Southern California. The CPUC adopted a \u201cPath 26 Counting Constraint,\u201d which the CAISO jointly proposed in lieu of an explicit zonal requirement for Path 26. The CPUC decision prohibits utilities and direct access providers from procuring more power from suppliers north of Path 26 than the grid can accommodate to efficiently serve load in Southern California. The policy will be in place until upgrades or new transmission lines are built to ease the bottleneck along Path 26, which is located just south of the Tehachapi Mountains. The CPUC warned that if it failed to impose local procurement obligations for load-serving entities the CAISO would have to rely on more costly power supply options to balance load requirements within zones in its control area. Hence the program amounts to an insurance policy for reliability of the transmission grid. \u201cWe should not await the actual occurrence of a zonal reliability event before we take prudent action to avoid the occurrence of the next such event,\u201d the commission stressed. The state\u2019s power supply typically flows from north to south, particularly during peak summer demand periods served by hydroelectric generation in the Pacific Northwest and the Sierra Nevada. The CPUC decision provides an exception for counter flow situations when suppliers are moving power from south to north. \u201cWe\u2019re happy to see them taking this action,\u201d said Gregg Fishman, CAISO spokesperson. \u201cIt\u2019s assuring that load-serving entities are procuring power in such a manner so it can be delivered to the grid and customers. You can only get as much from the north as the path will let you carry.\u201d The CAISO identified four components for determining zonal capacity requirements: forecasted load, import capability, generation outages, and the \u201csingle largest contingency.\u201d The zonal requirement will enable the CAISO-controlled grid to withstand the zone\u2019s single largest contingency. The grid operator determined that the single largest contingency for SP 26 as the loss of 2,000 MW from the Pacific DC Inter-tie, and for NP 26 the loss of a 1,160 MW Diablo Canyon unit.