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California Gov.'s "Strike Force" Report Recommends Evaluation Of Resource Adequacy Back-Stop Options, State Procurement Entity

POLR Obligation Could Be Examined As Well, Report Says

April 15, 2019

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Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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A "strike force" assembled by California Gavin Newsom Strike to examine the state's wildfires and energy future released a report recommending that the state evaluate resource adequacy back-stop options through the legislative process

Notable recommendations from the report are:

• Evaluate Resource Adequacy Back-Stop Options Through the Legislative Process:

"Procurement by the IOUs, under supervision by the CPUC, has been effective over time. But as the state transitions to more LSEs, gaps and inefficiencies could emerge. To manage this transition, new procurement support models, including a new state procurement entity that could enter into long-term contracts, provide credit support or otherwise facilitate purchases of electric energy, should be explored. Procurement support could have a number of benefits, including providing back stop resource adequacy procurement and ancillary services needed to support reliability. To maintain cost-effectiveness and achieve rate benefits, it will be important to continue to focus on procurement through integrated resource planning or a similar framework," the report says. In addition, the POLR obligation and the responsibility for implementing public purpose programs could also be examined, the report says

• Increase Transparency for Load-Serving Entities and State Coordination of Procurement:

"Customers in California should have access to complete and accurate information about the energy they are procuring, regardless of whether the procurement is from an IOU, POU, CCA, or ESP. This should include transparent information about prices, compliance with resource adequacy requirements, and the sources of energy being procured (including reliance on renewable energy sources). To the extent that customers have a choice regarding their retail electric provider, transparency is required so that they are able to make informed choices. Of course, transparency also is required for the appropriate government agencies to ensure compliance with applicable RPS, resource adequacy, and other requirements. Additionally, new programs or legislation may be needed for coordination of purchasing by CCAs and ESPs to ensure they continue to meet California’s standards for integrated resource planning, resource adequacy, clean energy progress, consumer protection, and hedging risk," the report says

Additionally, the report says that, "no options can be taken off the table to reform PG&E, including municipalization of all or a portion of PG&E’s operations; division of PG&E’s service territories into smaller, regional markets; refocusing PG&E’s operations on transmission and distribution; or reorganization of PG&E as a new company structured to meet its obligations to California."

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