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Concerned about power shortages, utilities commission bumps up resource requirements

San Diego Union Tribune logo San Diego Union Tribune 4 days ago By Rob Nikolewski, The San Diego Union-Tribune

Worried about a “significant possibility” of a shortfall in the state’s power system within two years, the California Public Utilities Commission voted 5-0 Thursday to increase capacity requirements for energy providers across the Golden State.

The decision also extends by a few years the life of four natural gas power plants in the Los Angeles area that use a method called “once-through cooling” that circulates seawater to absorb heat through a facility’s pipes. Once-through cooling is controversial because it can disrupt local ecosystems and kill fish and other marine life.

“This is perhaps the most difficult decision I have had since joining the commission,” said CPUC president Marybel Batjer, echoing sentiments of the four other commissioners.

The order calls for energy providers including utilities like San Diego Gas & Electric to sign contracts amounting to 3,300 megawatts of new power to ensure adequate resources. SDG&E’s share comes to 292.9 megawatts — of which it must procure at least 50 percent in 2021, 75 percent in 2022 and 100 percent in 2023.

The decision also extends to community choice aggregation, or CCA, energy programs. The share for the existing CCA in Solana Beach will be 1.1 megawatts. No word yet what the obligation will be for proposed a pair of proposed CCAs in the greater San Diego area that are looking to launch in 2021.

The commissioners were persuaded by warnings from the California Independent System Operator, or CAISO, the nonprofit that manages about 80 percent of the state’s electric grid, that a lack of sufficient resources may materialize by the summer of 2021.

That’s due to a number of reasons, including:

California’s peak time for demand on the grid runs from 4 p.m. to 9 p.m., which coincides with a dramatic reduction in solar generation as the sun goes down

capacity from imported sources may become scarcer as an increasing number of neighboring states adopt clean energy mandates similar to California’s, and

greater demand for hydroelectric capacity from states in the Northwest.

Mark Rothleder, CAISO vice president for market quality and regulatory affairs, told the Los Angeles Times if state officials don’t act quickly, price spikes or blackouts may result. “We need new capacity,” he said.

Southern California Edison said the shortfall could be even worse than the CAISO’s estimates unless natural gas generation is extended or new clean energy resources are developed and procured.

But critics say the fears are overstated. They point to an existing requirement that utilities must have a reserve of 15 percent more power than they anticipate needing to be more than sufficient.

“This is additional procurement that is unneeded for reliability that is essentially a handout to fossil fuel generators within the state of California,”

said Tyson Siegele, energy analyst at the Protect Our Communities Foundation, a San Diego-based environmental and energy group “And it is going to cost the ratepayers extra money” because energy providers will pass the costs of the new power contracts onto customers.

Siegele would not hazard a guess how much more a typical SDG&E ratepayer would pay but said the decision would amount to “billions for the whole state.”

The other two big investor-owned utilities — SDG&E and Pacific Gas & Electric — argued during the course of the proceedings that more resources were not yet needed. SDG&E said the CAISO’s analyses were very conservative and shortages would be unlikely.

Commissioner Liane Randolph, said the decision tried to balance the state’s clean energy policies (that include transitioning to 100 percent non-fossil fuel generation by 2045) with the need for greater resiliency in the power grid.

“The presence of natural gas generation will continue to decline between now and 2030 but as we look at the next few years, the reality is that those resources are needed,” Randolph said.

Randolph and other commissioners mentioned grid concerns related to recent power shutoffs by utilities to try to avoid igniting wildfires — particularly PG&E de-energizing power lines to more than 2 million of its customers.

In a late revision, the decision said the CPUC intends to prohibit the building of new fossil fuel plants at sites that have never been used for electricity generation.

“There’s no wiggle room,” Commissioner Clifford Rechtschaffen said. “That’s very clear. There’s not going to be new fossil fuel plants built” as a result of Thursday’s vote.

Siegele, however, said the decision’s language could keep the door open for natural gas at existing sites for years to come.

A suite of once-through-cooling plants in the Los Angeles area are scheduled to retire at the end of 2020 but under the decision, the CPUC will now recommend state water authorities extend the use of the Alamitos Generating Station and the Huntington Beach Generating Station for up to three years, the Redondo Beach Generating Station up to two years and the Ormond Beach Generating Station for up to one year.

“It’s time to end this use of fossil fuel that is a 60-year-old technology, in the interest of public health and sustainability,” Redondo Beach Mayor Bill Brand told the commissioners before the vote.

Commissioner Martha Guzman Aceves said, “I pledge to you I will never support another extension” for the once-through-cooling plants.

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©2019 The San Diego Union-Tribune

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