Calif. Draft Would Allow Utilities to Procure Local Capacity, With Nonbypassable Recovery

A proposed decision from the California PUC would authorize two utilities to procure generation to meet local capacity requirements, with recovery authorized through the nonbypassable Cost Allocation Mechanism.

The draft order would authorize Southern California Edison (SCE) and San Diego Gas & Electric (SDG&E) to each procure between 500 MW and 700 MW by 2022 to meet local capacity needs stemming from the retirement of the San Onofre Nuclear Generation Stations (SONGS).

SCE would be required to procure at least 400 MW, and up to the full 700 MW of authorized additional capacity, from preferred resources or energy storage. SDG&E would be required to procure at least 200 MW, and up to the full 700 MW of authorized additional capacity, from preferred resources or energy storage.

Both SCE and SDG&E would be authorized to recover the costs of the procurement through the Cost Allocation Mechanism.

"We find that the procurement authorized in this decision is for the purpose of ensuring local reliability in the SONGS service area, for the benefit of all utility distribution customers in that area," the draft says of the decision to grant CAM treatment.

Rulemaking 12-03-014