A Coalition of Electricity Providers and Clean Energy Companies Serving Over 8 Million Californians Call on California’s Energy Agencies to Adopt Common Sense Electricity Regulatory Changes to Deliver Clean, Reliable Energy by Summer of 2021

October 22, 2021

Oakland, CA (October 22, 2020) – A coalition of public electricity providers, leading clean energy technology companies and advocates submitted a letter to the California Assembly Committee on Utilities and Commerce in response to their October 12, 2020 hearing on the root causes of the August 2020 blackouts. In their letter, the coalition is calling for the California Public Utilities Commission (CPUC), the California Energy Commission (CEC) and the California Independent System Operator (CAISO) to adopt five commonsense regulatory changes and enhancements to California’s Resource Adequacy program that will both support the deployment of new, clean energy resources and enhance electric system reliability.

Provide Value Certainty for 4-hour Energy Storage Resources: Currently, entities that supply power to the grid — like East Bay Community Energy — have signed contracts for hundreds of MWs of new energy storage projects, many of them paired with solar energy. One of the most significant risks that these projects face is that the value of energy storage projects will erode over time as new duration requirements are implemented. This jeopardizes the ability to invest in the quantities of storage resources that the state’s planning processes indicate are required to ensure reliability. To fix this, the CPUC should guarantee the value of existing energy storage resources at the time of development.

Ensure Energy Storage Resources Can Respond to Grid Stress: The events of mid-August 2020 highlight the need for resources that are able to rapidly respond to grid conditions in order to mitigate net load variations derived from the integration of renewable generation. The CAISO should ensure storage resources have the correct market signals and maintain enough flexibility to continue contributing to reliability within the CAISO’s footprint.

Maximize the Value of Behind the Meter Energy Storage: Homes and businesses across California have increasingly been installing battery storage paired with rooftop solar to provide backup power during the seasonal power shutoff events. When aggregated together and intelligently dispatched in response to strained grid conditions, these solar-charged “behind the meter” batteries can provide hundreds of MWhs of clean peaking energy generation to help alleviate power shortages. But right now, California does not have policies and programs in place to allow us to make full use of this storage capacity to help the grid during power shortages and for customers to be fairly compensated for that service. The state should enable residential battery customers to provide capacity at the same value as that assigned to large-scale batteries and fossil power plants.

Eliminate Limitations on the Procurement of Conservation: The cheapest way to meet our need for electricity is not to generate more of it, but to induce customers to conserve electricity – particularly during the peak, early evening hours. But the CPUC recently capped procurement of conservation resources by load-serving entities (LSEs) at 8.3% of their total energy production requirement. As an immediate step, the CPUC should suspend this procurement cap for 2021.

Streamline and Simplify CPUC Processes to Incentivize Conservation and Behind-the-Meter Energy Storage: The energy market is rapidly changing, innovating and becoming more decentralized. But many CPUC decision-making processes remain geared to the old energy world, in which utilities generated and provided all electricity to customers. The state should take steps to reduce the cost and barriers to entry for non-utility conservation and battery storage providers to unleash innovation that can dramatically reduce our need for more electricity.

As California works to build an electricity system that is ready for the challenges that climate change has in store, it’s imperative that we immediately implement these common-sense changes that can not only help stabilize the grid by 2021, but save consumers on their electricity bills while also having the benefit of reducing air pollution and GHG-emissions from burning more natural gas.

The Letter to the Assembly Utilities and Commerce Committee can be found here

About the Coalition:

The coalition is made up of a group of California Load Serving Entities, clean energy technologies, generators, demand response providers, trade organizations and advocates who are or represent active participants in the California electricity market. Jointly, the coalition serves over 8 million Californians, has deployed 10,000 MWs of clean electricity generation and employ thousands of Californians.

Signatories to the Letter