Advocacy at the California Energy Commission (CEC)

CEERT is actively taking part in the CEC’s Integrated Energy Policy Report (IEPR), which is focusing on transportation issues and on transmission, the impacts of land-use planning efforts, the use of environmental screens in energy procurement, and the expansion of renewable energy. We are also participating in the CEC-based interagency group working to implement SB 100’s goals of 100% zero-carbon energy for the state.

Recent Developments:

The California Energy Commission (CEC) and the Interagency SB 100 Planning Process

CEERT has been following the implementation of AB 205, which established and funded programs to ensure there would be sufficient resources for extreme weather events. The legislation established three new programs: the Demand Side and Grid Support Program ($314 million), the Distributed Energy Backup Assets Program ($595 million), and the Electricity Supply Strategic Reliability Reserve Program ($2.4 billion).

CEERT has been encouraged by the CEC’s administration of these programs, and believes they could provide at least 1,200 megawatts of contingency resources that would be available during extreme weather. We also believe there is significant potential for more than 500 megawatts of demand-side resources through third-party aggregators, and great potential for pairing batteries with rooftop solar, both in front of and behind the meter.

When AB 205 was passed in 2022, there was concern that the combination of supply-chain constraints and delays in interconnecting clean energy and battery storage projects could delay the availability of those projects, and a belief that the possibility of extreme weather events, massive wildfires, and low hydroelectric resources necessitated the procurement of additional generation resources. In May 2022, the state energy agencies made the finding that additional generation resources would be needed for several years. Fortunately, the drought has been alleviated and reservoirs are largely full, and the supply chain constraints have been largely overcome in the intervening 20 months. In 2023 California was successful in procuring both renewable energy resources and batter storage projects in large quantities, resulting in significantly increased resource adequacy.

In light of these changed circumstances, and with the state budget facing a $70 billion deficit, CEERT is urging the CEC to rethink the need for continuing to operate the soon-to-be-retired once-through-cooling (OTC) gas-fired plants, and return the plants’ $2.1 billion of expenses to the general fund. Moreover, the hasty decision to push for the extension of Diablo Canyon’s operations for at least the next five years was based on the same panicked response to the possibility of reliability disruptions during extreme weather events, along with supply-chain and interconnection issues, that led to the effort to extend the life of the old, polluting, and expensive OTC plants. Part of the package to induce PG&E to keep Diablo Canyon open, along with a $1.5 billion forgivable load from the federal government, was $400 million appropriated to support operating cost increases, which has not yet been spent, and another $800 million to underwrite further cost overruns.

While it is probably too late to walk back the decision to continue operating Diablo Canyon until at least 2030, given the state’s enormous budget deficit and cutbacks in spending on climate and clean energy programs, California should rescind these operating subsidies from the general fund, instead of incentivizing PG&E to make more money on Diablo.

CEERT has written a detailed memorandum to CEC Vice Chair Siva Gunda outlining the changed circumstances and the need to rethink ongoing general fund expenditures and support for these out-of-market, highly polluting and expensive resources, and instead allocate the remaining funds to clean energy infrastructure and demand response measures.