CPUC Ponders L.A. Basin Reliability Roulette

By Published On: October 5, 2012

How to ensure grid reliability from 2013-22--particularly in the region that was served by a fully operating San Onfore Generating Nuclear Station--is a major California Public Utilities Commission focus. “The situation at SONGs presents an opportunity for California to review grid coordination and interconnection options that could allow a greater amount of renewables and efficiency to be cost-effective resources in Southern California,” Kristin Eberhard, Natural Resources Defense Council legal director for western energy and climate projects, said Oct. 4. At issue is how much and what kind of energy the Los Angeles basin will need in the next decade. Not only is the area affected by the ongoing San Onofre outage (see page 2), but there are also pending closures or retrofits of water-cooled coastal power plants. -The grid operator estimates at least 2,370 MW of localized new natural gas-fired generation will be necessary over the next decade. -Southern California Edison generally agrees on that capacity forecast, but doesn’t want to invest in new generation that could soon be obsolete. -Consumer advocates and renewable energy promoters want to count demand-response and efficiency in the forecasts. They say the California Independent System Operator’s requests violate the state’s “loading order.” That policy gives top ranking to the cleanest resources. If the proposed gas-fired power plants are built “they will add new fossil fuel plants to the energy system at the very time when California should be well on the path toward decarbonizing its electric system and economy,” warned the Sierra Club in its commission filing Sept. 26. CAISO’s decision not to count energy efficiency and demand-response resources when assessing local capacity needs “undermines CAISO’s credibility,” adds the Sierra Club. The environmental organization notes that while the grid operator still leaves demand-response and efficiency out of the equation, it argues those conservation resources are important for the system. “How to utilize [local capacity requirements] for long-term planning is a novel question for the commission, and the longer planning horizon greatly increases the uncertainty of the evaluation,” points out the Division of Ratepayer Advocates, in its filing. It calls for the CPUC to authorize Edison to procure only 169 MW of new resources in 2021 and 278 MW the following year for the L.A. Basin and not buy into the CAISO’s worst-assumption scenario. The grid operator projects a need for 2,371-3,741 MW of gas-fired generation in the basin to meet demand over the next decade. While Edison agrees with the grid operators’ numbers, it raises concerns about committing to long-term investment in fossil generation. The utility stated it “would prefer to not procure resources to meet system needs, and does not want to make long-term commitments that could subsequently be rendered less valuable by changed circumstances.” Edison calls for developing a multi-year capacity market or the “flexibility to determine the appropriate procurement method.” The Utility Reform Network recommends that the commission use demand reduction measures to address a quarter of the CAISO’s gas-fired capacity proposal. TURN, like Edison, also is concerned about the cost of so much new gas-fired power. In a filing released Oct. 1, TURN also urges the commission to work with the State Water Resources Control Board to get it to delay its phase-out schedule for the state’s once through cooled coastal power plants. It points to expected hang ups associated with new transmission to help fill the power gap.

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