CPUC signals clear intent to usurp gas-fired plants with ESS

CPUC signals clear intent to usurp gas-fired plants with ESS

CPUC signals clear intent to usurp gas-fired plants with ESS Energy Storage Journal

 

The California Public Utilities Commission unanimously approved on January 11 a draft order that will allow companies to stack more than one service on their energy storage systems. Effectively this allows companies to charge for multiple services along the full power chain from transmission system to customers.

The CPUC adopted 11 rules outlining how multiple-use energy storage applications will be evaluated, definitions of service domains, reliability and non-reliability services.

On the same day, the CPUC directed Pacific Gas and Electric Company to solicit bids for clean energy resources to replace three California, US, fossil fuel plants with energy storage.

As part of its commitment to reducing greenhouse gases in the state, the CPUC authorized PG&E to issue a Request for Offer for battery storage or other preferred resources to meet specific needs in Northern California.

Those resources could replace natural gas and geothermal company Calpine’s Feather River; Yuba, and Metcalf plants. The plants do not have long-term contracts with utilities but have been identified by the California Independent System Operator as needed to serve local reliability needs.

Calpine and the CAISO have requested that the Federal Energy Regulatory Commission approve the CAISO’s designation of the three plants as “must run” for reliability purposes, which would mean that the plants would get paid to operate on an expensive cost of service contract.

CPUC and PG&E have opposed this, according to a CPU statement, partly because a lack of competition can lead to market distortions and unfair rates for power. The CPUC believes there are cleaner, less expensive alternatives, including battery storage and preferred resources.

On the same day as the announcement, CPUC approved PG&E’s request to retire the Diablo Canyon nuclear power plant in San Luis Obispo by 2025.

CPUC president Michael Picker, the commissioner assigned to the proceeding, said the plant was no longer economic, and PG&E, had asked to close it down: “We looked hard at all the arguments, and the commission agrees that the time has come. We have laid out a fair and reasonable pathway to clean power replacement.”

The CPUC will consider any electricity procurement needed to replace Diablo Canyon should be addressed in its Integrated Resources Procurement proceeding. The IRP is considering the optimal mix of resources needed to reduce greenhouse gas emissions from the electric sector while simultaneously maintaining reliability and minimizing costs to customers.