The California Public Utilities Commission (CPUC) on Thursday approved a series of actions to reduce the risk of power outages during extreme heat events, including possible increased natural gas-fired generation from existing plants.

Following prolonged heat waves across the western United States in 2020 and 2021, the measures aim to reduce energy demand and increase supply during peak consumption hours.

CPUC is directing utilities Pacific Gas and Electric Co. (PG&E), Southern California Edison Edison Co. (SCE) and San Diego Gas and Electric Co. (SDG&E) to procure a total of 2,000 to 3,000 MW of demand and supply-side resources for summers 2022 and 2023.

This includes 900-1,350 MW each for PG&E and SCE, and 200-300 MW for SDG&E, the regulator said.

“Existing authorization to procure additional supply-side resources such as storage, imports and gas plant efficiencies is expanded” under the decision, CPUC said.

While the decision allows for incremental generation from existing gas-fired plants through upgrades and efficiency improvements, procurement contracts “for fossil-fuel development at new sites or for redevelopment or full repowering at existing or mothballed electric generation sites will not be considered,” CPUC said. 

The call for new capacity is in addition to CPUC orders in November 2019 and last June for utilities to procure a combined 14,800 MW of emission-free clean electricity resources to enter service between 2021 and 2026.

The June order was for 11,500 MW, the largest single procurement ever directed by CPUC. 

The state regulator is aiming to shore up capacity in response to more extreme weather events while replacing 3,700 MW of retiring natural gas plants and 2,200 MW from PG&E’s retiring Diablo Canyon nuclear power plant.

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Peak demand managed by the California Independent System Operator (CAISO) was 47,121 MW in 2020, while 43,982 MW in September was the peak so far this year, CPUC said. The U.S. Department of Energy in September authorized CAISO to dispatch 200 MW of natural gas-fired capacity beyond permitted levels to compensate for projected shortfalls in supply.

In addition to Thursday’s procurement order, CPUC approved a program within its Emergency Load Production Program (ELPR) that would pay residential customers $2/kWh for reductions in energy use at critical times, with special outreach to low-income customers and those in disadvantaged communities.

“This new offering allows residential customers to get paid the same way business customers are paid to reduce energy demand at key times,” CPUC said.

Customers with electric vehicles (EV) may participate by shifting their charging behavior or discharging from the vehicle’s battery.

The California Energy Commission last month approved $1.4 billion in funding to build out the state’s EV charging and hydrogen refueling infrastructure, in line with Gov. Gavin Newsom’s executive order to phase out new gasoline-powered passenger vehicle sales by 2035.

Other measures approved include:

  • Efficiency programs for the summers of 2022 and 2023 to rapidly deploy energy savings at peak or net peak times, with payments made on a performance basis and energy savings measured at the meter.
  • Two dynamic rates pilot programs to test the effectiveness of customer response to electricity rates that change rapidly during grid emergencies. One pilot is to incentivize shifting agricultural water pumping to off-peak times in response to price signals, while the other would do the same for other end-uses such as EV charging.
  • Up to four new energy storage microgrid projects for SDG&E to provide up to 160 MWh of capacity to fill expected summer shortfalls in 2022 and/or 2023.
  • Authorization for PG&E to study the possibility of augmenting its temporary generation program by identifying sites that can safely interconnect to the grid to address capacity shortfalls.