ORIGINAL REPORTING: Customer empowerment upheaval forces California into hold on renewables

Customer empowerment upheaval forces California into hold on renewables; Utilities and renewable energy developers wait while regulators decide the future of customer choice.

Herman K. Trabish, Feb. 22, 2018 (Utility Dive)

Editor’s note: Since this story was filed, California regulators and lawmakers have taken major steps to calm the upheaval with a new short term procurement mandate, a new 100% renewables mandate, and a resolution of the exit fee issue.

California is conducting what may be the most ambitious electricity customer empowerment experiment ever done anywhere; whether it will work remains very much in doubt. The state is the national leader in both utility-scale solar and distributed solar capacities and fourth in the nation in wind capacity. Yet California’s dominant investor-owned utilities (IOUs) procured zero new MW of renewable energy capacity in 2017. And a preliminary plan released in January by state regulators proposes almost no 2018 procurement. That is the symptom. The problem is widespread power sector uncertainty causing what one key observer called an “upheaval.” The disruption does not support California’s goals to cut its greenhouse gas emissions 40% below 1990 levels by 2030 and achieve its 60% renewable energy by 2030 mandate and 100% by 2045 goal. And it threatens the stability of utility-scale renewable energy builders.

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California’s successful transition to renewables is one cause of the current upheaval. It has left the state with midday solar overgenerationand a sharp, difficult to manage demand spike in the late afternoon and evening. Another source of upheaval is the Pacific Gas and Electric (PG&E) decision to shutter the state’s last nuclear power plant, Diablo Canyon, by 2025. It raises the contentious question of how the state should fill the 2,200 MW deficit of emissions-free baseload generation. The state needs flexible generation, but natural gas peakers will make the climate goals harder to reach. The third and biggest cause of upheaval is the rise of community choice aggregation (CCA). A 2002 law allows CCAs to act as load serving entities (LSEs) and take on IOU customers. Active CCAs now serve over 1 million California electricity customers and projections show IOUs could lose 85% of their customers to alternatives by the mid-2020s… click here for more

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