California regulators on Thursday took actions aimed at both short-term issues of wildfires and power risks due to natural gas storage problems, and supporting long-term climate change program goals.
The California Public Utilities Commission (CPUC) also did some hedging, allocating more than $140 million in electric demand response programs and an undisclosed amount on a forest waste biomass program at Pacific Gas and Electric Co. (PG&E).
As part of approving individual demand response efforts, the CPUC adopted a proposal from Southern California Edison Co. (SCE) for an extra $11.8 million to address the increased risk of summer power outages due to potential shortfalls in gas supplies to power plants in the Los Angeles Basin. For broader demand response efforts, SCE was granted $56.28 million for 2017; PG&E got $59.9 million; and Sempra Energy's San Diego Gas and Electric Co. received $23.8 million.
"Demand response is a way for customers to help California manage its electricity demand," a CPUC spokesperson said. Typically, these are programs and tools by which customers can change or shift electricity use.
In March, the CPUC directed the utility demand response programs this year and next to help mitigate against the state's largest natural gas storage facility, Aliso Canyon, being shut down for detailed testing and review following a four-month-long storage well leak that disrupted thousands of nearby homeowners and has cost more than $600 million (see Daily GPI, March 15).
That ruling directed SCE to intensify its demand response efforts in areas most affected by the leak and to mitigate the impact of reliability issues.
"Our decision creates the opportunity for many customers in Los Angeles County to meaningfully contribute to the emergency conditions created by the Aliso Canyon leaks," said CPUC Commissioner Mike Florio, who urged Los Angeles area customers of SCE to take advantage of the utility programs that can "save them money, reduce emissions, and ease the power pinch LA will feel this summer."
Meanwhile, the CPUC approved a renewable purchase power contract for PG&E with Sierra Pacific Industries focused on the use of dead tree biomass resulting from recent years of drought and bark beetle infestations. The deal calls for using the forest waste at five biomass power generation facilities in the Northern California Sierra Nevada region at the towns of Anderson, Burney, Lincoln, Quincy, and Sonora, CA.
"The amendment takes the form of a unique tolling agreement -- the first of its kind in California -- in which PG&E will deliver hazardous forest biomass waste as fuel at no cost to the five facilities and buy the additional electricity generated," the CPUC spokesperson said. The cost of the contract is being kept confidential to ensure "market sensitive data does not influence the behavior of bidders" in future renewable energy solicitations, the spokesperson noted.
"This is a great price for customers, and it also reduces fire hazards," said CPUC President Michael Picker, noting it is an outgrowth of an emergency proclamation last fall by Gov. Jerry Brown. "This contract sets a high bar for all other biomass facilities in California."