California Regulator Seeks 4 Gigawatts of New Resources to Avoid Power Capacity Shortfall Starting in 2021

The California Public Utilities Commission issued a proposed decision on Oct. 21, requiring load-serving entities to procure 4 gigawatts of additional capacity to forestall potential resource adequacy shortages starting in 2021. The order also recommends extension of the Water Resource Control Board’s once-through-cooling regulation compliance dates for about 3.7 gigawatts of gas-fired units slated to retire by the end of 2020, in order to serve as a bridge to allow new clean resources to come online.

The decision would require the incremental procurement to be in addition to the baseline resources identified for 2022 in the preferred system plan and the retirement extensions. In May, the commission approved a preferred portfolio that calls for 12 gigawatts of new renewables and storage by 2030. The resources would be required to come online at least 60 percent by Aug. 1, 2021, 80 percent by Aug. 1, 2022, and 100 percent by Aug. 1, 2023.

The commission said it remains committed to compliance with the once-through-cooling, or OTC, regulations, and the schedule adjustment is purely intended to ensure electric system reliability. The order recommends extending the current OTC compliance deadlines of Dec. 31, 2020 for the following units for the period specified: 

• Two units totaling about 1,200 megawatts at the Alamitos Generating Station for up to three years;
• One unit having a capacity of 200 megawatts at the Huntington Beach Generating Station, for up to three years;
• Three units totaling about 850 megawatts at the Redondo Beach Generating Station, for up to two years; 
• Two units totaling about 1,500 megawatts at the Ormond Beach Generating Station, for up to one year.

The order also calls for temporary extension for the Moss Landing facility to meet its obligations under the OTC requirements, though this does not result in additional capacity being available.

Utilities would be authorized to consider third-party ownership and own resources to be procured to satisfy the requirements of the order, while demonstrating that utility-owned resources represent least cost to ratepayers. 

Last month, the agency proposed to revise the integrated resource planning process due to the proliferation of community choice aggregators, which could collectively represent a significant share of the demand. The proposal would require all load-serving entities, regardless of size, to file standard plans and remove alternative plans that allowed simplified filing requirements for smaller utilities.