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PG&E Pursuing California Power Project Sans Natural Gas

In keeping with a long-term goal to reduce nuclear and natural gas-fired power generation, San Francisco-based Pacific Gas and Electric Co. (PG&E) has begun to wind down its reliance through distributed renewable and energy efficiency projects in Oakland.

Instead of replacing a 40-year-old jet fuel-powered generation plant operated by Dynegy Corp. with natural gas, PG&E has launched the Oakland Clean Energy Initiative, which would use a series of alternatives.

"It would be a cleaner and more affordable option than the traditional approach," a utility spokesperson said.

The proposal, still in its early stages, calls for PG&E to deploy a combination of energy resources, including storage, efficiency and electric-system upgrades, to ensure reliability for Oakland and the state grid operator, which uses the existing central power plant as a reliability-must-run (RMR) facility.

While noting that there are a number of approvals and bidding processes to surmount, CEO Geisha Williams said the project would be a "milestone" and a new model for other California cities and beyond. She said various local government, political, union and environmental leaders have been brought into the planning process.

"If the proposal is approved, it will mark the first time that local clean energy resources are proactively deployed as an alternative to fossil fuel generation to provide transmission reliability," the utility’s spokesperson said.

Oakland Mayor Libby Schaaf cited multiple potential benefits for the city.

"It is not every day that you get to make the air cleaner, improve the health and quality of life for your residents, and support green jobs, but that's what this project will do for Oakland," Schaaf said.

PG&E plans to work with the East Bay Community Energy organization to solicit requests for offers (RFO) from distributed energy providers. This process is expected to turn up projects that collectively represent 20-45 MW.

The overall PG&E proposal is scheduled to go to the California Independent System Operator (CAISO) in its annual transmission planning process and a decision is expected in early 2018.

 With CAISO's approval, PG&E would begin the RFO process and make the necessary filings for cost recovery.

The regulatory filings to the Federal Energy Regulatory Commission and the California Public Utilities Commission (CPUC) are expected by the end of next year, with an in-service target for the initiative of mid-2022.

The other major gas utility in the state, Southern California Edison Co., is deploying more efficient electrification plans too.

PG&E's push comes as it is negotiating a global initiative including closing by 2025 the state's last remaining nuclear plant at Diablo Canyon. Under a joint agreement hammered out last year with stakeholders, PG&E plans to pursue greenhouse gas (GHG)-free replacement sources of power in three tranches: 2,000 GWh/year in energy efficiency, 2,000 GWh/year in renewables, and a third effort from 2031-2045 during which it is committed to providing 55% of power supply from renewables, exceeding a state goal of 50% by 2030.

A driver for the agreement comes from state law SB 350, which requires the CPUC to "identify a diverse and balanced portfolio of resources" needed to provide reliable power supplies for the state while integrating more renewables onto the grid "in a cost-effective manner." SB 350 also authorized the CPUC's creation of an integrated resources planning process (IRP).

Under the IRP, a GHG emissions reduction target was set at 40% of 1990 statewide levels by 2030, the same year renewables are mandated to equal at least half of the power supplies.

The state law also recognized that PG&E and other major utilities in the state face "the challenge of managing over-generation and intermittency conditions under a resource portfolio increasingly influenced by solar and wind production," as well as increased distributed generation.

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