Resource Adequacy Rulemaking – Proposed Decision on Central Procurement

Description

In January 2019, the California Public Utilities Commission (Commission) issued a scoping memo for Track 3 of the Resource Adequacy (RA) Rulemaking. Track 3 is intended to define and adopt local, flexible and system requirements, as well as address other refinements to the RA program, such as load forecasting methodology, consideration of how storage and combined resources should count for RA credit and other modifications and refinement to the RA program as identified by the Energy Division.

On August 30, 2019, CalCCA, Calpine and other stakeholders filed a joint motion to adopt a settlement agreement for a residual procurement entity structure of RA. The settlement agreement intended to get ahead of any Commission decisions that might be unfavorable to load serving entities (LSE), including CCAs. It further described the framework of a central procurement entity (CPE), a procurement structure that had been introduced by the Commission in a previous decision. The settlement agreement proposed guidelines under which the CPE would operate. At a high level, the settlement agreement proposed an operational framework whereby LSEs would continue to have the ability to self-procure, and only the procurement of unmet obligations, or residual needs, would fall to the CPE. The proposed framework maintained LSE procurement autonomy and flexibility to procure local resources based on each LSE’s particular objectives and preferences.

On March 26, the Commission issued a proposed decision (PD) that effectively dismissed the settlement agreement and establishes SCE and PG&E as the CPE for local RA in their service territories. The concerns include the loss of procurement autonomy, the creation of barriers to local investments in generation and IOU conflict of interest.

Next Steps

CalCCA is working with other stakeholders to identify and convey concerns to policymakers. CalCCA and other stakeholders have filed comments, which were due April 15. In the comments, CalCCA will be making several recommendations, including reexamination of the settlement agreement allowing CCAs and other LSEs to preserve their self-procurement autonomy, improvement of CPE procurement process to protect LSE and CCA customers, and a limit on the term of the IOU as the CPE. The PD will be voted on no sooner than the May 7 Commission meeting.