At a California Public Utilities Commission October 1 workshop, independent generators claimed the state\u2019s current resource adequacy market largely shuts them out. \u201cSo long as investments continue to be regulatory-based by the CPUC with utility backing, merchant generation won\u2019t be forthcoming,\u201d said Mary Lynch, Constellation Energy vice president. She said the current market for spare capacity should instead be met with \u201cbilateral contracts based on transparent price signals,\u201d as provided by a capacity market, which meet specific businesses needs. However, The Utility Reform Network attorney Mike Florio--representing a coalition of large and small consumer groups supporting bilateral deals--applauded the last two years of success under the resource adequacy program. Specifically at issue in the workshop was the current and future state requirement that utilities have a 115-117 percent electricity supply cushion, and the possible role, shape and cost of a capacity market. The latter allows the trading of energy capacity, in small or large increments, as a means of shoring up utilities\u2019 supply reliability at times of high demand. The commission and others, in and outside the state, have grappled with ground rules for a capacity market for a number of years. \u201cThe state has gotten through two heat waves and very high demand, and the resources have been there,\u201d said Florio. He agreed, however, that there are problems with the current capacity program because it is resulting in new baseload power projects. Florio warned against allowing \u201cgeneric capacity\u201d in place of reserves that fit the specific needs of the grid. \u201cIf we need quick start power then we shouldn\u2019t be buying baseload power.\u201d Generally, baseload power is fueled by fossil and nuclear so the plants run around the clock. Those plants also need massive transmission systems to get their power from source to use. Non baseload peaker plants also use fossil fuel but may only need local distribution systems to send out electricity. Solar and wind power are intermittent sources. Florio and some utility representatives pointed out that the CPUC\u2019s 115-117 percent \u201cresource adequacy\u201d requirement should not be viewed in isolation. It is only one part of a \u201cvery textured, complicated\u201d energy market, which includes the state\u2019s loading order and its top priority for energy efficiency, the 20 percent renewables portfolio standard, and demand response programs, said Todd Strauss, Pacific Gas & Electric director of analysis. For PG&E and consumer advocates the bottom line is cost, although Strauss admitted that natural gas costs are higher than would be the additional costs of any capacity market. Representatives from the California Independent System Operator urged that the burden and cost of supplying needed capacity not fall solely on their shoulders. \u201cWe need a better assessment of need\u201d to better serve the market, said Lorenzo Kristov, CAISO principal market architect.