Low-Carbon Grid

CEERT’s Low-Carbon Grid Program promotes the integration of large amounts of renewable energy on the grid by tracking and intervening in crucial proceedings at the California Independent System Operator (CAISO) and other agencies. We also seek to foster joint operating agreements between the CAISO and the state’s municipal and investor-owned utilities, and promote coordination and consolidation of the Balancing Areas in our state and region as a low-cost means of integrating renewable power. The issues are often highly technical, but have enormous impact on the price of renewable energy projects and their access to the transmission and distribution system.


Recent Developments:

Grid Modernization and Reform

CEERT has continued its efforts to find solutions to decrease the gas burn in California. Grid Policy Director Liz Anthony has begun to use the now largely completed gas-fleet database for policy applications. Her outreach to environmental and environmental-justice advocates has helped to further coordination and assistance on policy issues directly relating to the gas fleet, an orderly retirement of gas-fired capacity, and the potential retirement of the Aliso Canyon gas storage facility. The gas database has also been utilized to map gas capacity and usage for local capacity areas and requirements.

 

Western Grid Integration

CEERT’s ally Clean Power Campaign has been meeting regularly with the Fix the Grid Steering Committee and related subgroups to discuss new developments, media, and political strategy on the proposed legislation to begin the transition to an integrated regional grid. But Assemblymember Holden’s decision to include amendments in AB 813 that would restrict the importation of renewable energy from outside the current CAISO footprint would effectively eliminate the use of dynamic transfers of regional wind for purposes of Renewable Portfolio Standard (RPS) compliance. This amendment is all but certain to lead to a court challenge to the legislation, because it appears to directly conflict with the Dormant Commerce Clause of the U.S. Constitution, and it undermines one of the principal goals of regionalization, which is to allow California to access lower-cost, grid-friendly wind and solar from neighboring states.

A group of Fix the Grid affiliates met with Assemblymember Holden and expressed strong opposition to this language being included in the bill, but were told that the amendment wouldn’t be dropped unless the Governor and Mr. Holden determined removing the language would increase support for the bill. In addition, a number of Fix the Grid affiliates, led by Environmental Defense Fund, are seeking to add language to the bill that would be designed to strengthen California’s ability to defend itself from hostile action by the Federal Energy Regulatory Commission. To date, Assemblymember Holden has declined to accept the proposed FERC amendments.

Concern is growing about the risks of FERC interference in state environmental and clean energy policies, based on two recent decisions involving state clean energy subsidies and their potential to distort electricity markets. While these two decisions would not apply in regions such as California where there are no capacity markets, two recent filings at FERC by natural gas generators La Paloma and Calpine, protesting California’s Resource Adequacy programs as interference in wholesale markets and requesting FERC intervention, have raised concerns about the possibility of future FERC intrusions, especially in light of the prospect of President Trump appointing two new FERC commissioners.

Fix the Grid affiliates are divided on the value and risks of moving AB 813 forward without additional amendments, amid fears that the Governor will jam the bill through in August, perhaps as part of a mega-deal on SB 100 (de León) and wildfire liability.

There is growing interest by some members of the Fix the Grid Coalition in having the legislation be amended to require approval of the Legislature and the next Governor of the final governance proposal developed by CAISO and stakeholders and utilities in neighboring states. There is also concern about the provisions of AB 813 specifying that California would only have three members out of 12, or possibly 18, on the States Committee, which would approve nominations to the new board of CAISO’s successor agency and advise on key policy issues such as resource adequacy and transmission cost allocation.

Meanwhile, CEERT continues to work with colleagues from the Pacific Northwest to advocate for further coordination between California and the Northwest. Current barriers to a solar-hydro exchange between the regions are largely due to misalignment of timelines and seams issues. In order to receive resource adequacy (RA) payments, Northwest entities would have to bid capacity before they know what the hydro levels are, and therefore what capacity will be available. For shorter timeframe transactions, Northwest entities typically buy and sell excess hydro capacity days before the CAISO’s day-ahead market bidding occurs. CEERT and our Northwest allies have been successful in pushing for a new framework for flexible resource adequacy that would better allow Northwest hydro to count for RA compensation.

Grid Policy Director Liz Anthony and Technical Director Jim Caldwell have also been in discussions with colleagues about a recent increase in the Bonneville Power Administration’s southern intertie southbound short-term transmission rate. That increase made current low-carbon imports from the Northwest much less affordable, and created another significant barrier to an ex-change of California midday solar surplus for the Northwest’s hydro ramping capacity. CEERT is working with Northwest advocates on a strategy to push back against this rate increase.

 

Discussions with the Governor’s Office

V. John White joined other renewables advocates for meetings with the Governor’s new Executive Secretary Diana Dooley and Special Advisor Alice Reynolds to discuss the importance to the renewables industry of keeping the investor-owned utilities solvent and spreading and sharing the current massive wildfire liability obligations. The group also discussed the de facto moratorium on new renewable procurement, and the fact that without substantial new renewable investment that takes advantage of expiring federal tax credits, California would fall behind in its renewables and greenhouse-gas reduction targets.

V. John White and Liz Anthony also met with Alice Reynolds and Saúl Gómez to discuss discrepancies and errors in the CPUC’s modeling assumptions for current and future projections for air pollution and greenhouse-gas (GHG) emissions, and the CPUC’s mistaken assumptions that California is on target to meet 2030 RPS procurement and greenhouse-gas (GHG) reduction targets.