2. Background
Public Utilities Code Section 380 (as amended by Stats. 2008, ch. 558,
Sec. 13, effective January 1, 2009) requires that "the Commission, in consultation with the California Independent System Operator, shall establish resource adequacy requirements for all load-serving entities." The statute establishes a number of objectives for the Commission to achieve with the program, including development of new generating capacity and retention of existing generating capacity, equitable allocation of the cost of generating capacity, and minimization of enforcement requirements and costs. Section 380 (j) defines "load-serving entities" for purposes of this section as "an electrical corporation, electric service provider, or community choice aggregator."
Based on the statutory language, the Commission's Resource Adequacy (RA) program and requirements apply to all load-serving entities (LSEs) under our jurisdiction. Certain small or multi-jurisdictional LSEs are subject to different RA requirements which are more appropriate to their situations than those described in this order.
This proceeding has been divided into two phases. Phase One considers local capacity procurement obligations for 2013 applicable to
Commission-jurisdictional electric LSEs and several proposed RA program refinements. Phase Two will consider local capacity procurement obligations for 2014 applicable to Commission-jurisdictional electric LSEs and any further RA program refinements.
An Assigned Commissioner's Ruling and Scoping Memo (Scoping Memo), issued on December 27, 2011, identified the issues to be considered in Phase One of this proceeding as well as the procedure and schedule for their consideration. Two broad categories of issues were established. The first category, local RA issues, pertains to the California Independent System Operator's (ISO) 2013 local capacity requirements (LCR) study as well as this Commission's establishment of local procurement obligations for 2013 based on the LCR study. The second category, program refinement issues, pertains to various proposals to modify the RA program.
The Scoping Ruling identified the following issues for this proceeding:
1. Review the yearly LCR recommended by the ISO;
2. Refinements to the RA program:
a. Standard Capacity Product implementation for demand response resources;
b. A reevaluation of the Maximum Cumulative Capacity (MCC) buckets to include demand response resources as a supply resource, as well as other policy and implementation improvements to the MCC construct;
c. Adjustments to the RA coincidence adjustments;
d. Development of qualifying capacity (QC) rules for dynamically scheduled and pseudo-tie resources;
e. Allocation of RA credit for third-party demand response providers who participate in Reliability demand response programs;
f. Recommendations from the ISO regarding the type of resources needed to manage the grid, and how to provide such resources to the ISO within the RA program;
g. Update RA rules to account for differences in procurement due to the 33% Renewable Portfolio Standard requirement, the electrical system's operational needs, and related issues;
h. Staff implementation proposals, including:
· QC rules for dynamically scheduled or pseudo tie resources;
· Revisions to the MCC bucket percentages and some policy changes to refine and clarify additional policies; and
· Changes to the rounding convention as adopted in Decision (D.) 07-06-029.
The Commission's Energy Division facilitated workshops on RA program refinement issues1 on January 26 and 27, 2012, summaries of which were transcribed and are on the record. Not all of the issues in the Scoping Memo were developed sufficiently to resolve in this decision. Those issues not resolved herein remain in the scope of the proceeding, subject to further scoping by the assigned Commissioner. On March 2, 2012, the ISO filed a supplement to its proposal regarding flexible capacity from the January workshops.
An Administrative Law Judge's (ALJ's) Ruling on March 23, 2012 provided that parties may comment on an attached Energy Division workshop report and all topics addressed in presentations and/or in the transcripts of the January workshops, and on the ISO supplemental proposal. Comments on the Phase One issues discussed in the workshops were filed on April 11, 2012 by Abengoa Solar, Inc. (Abengoa); Alliance for Retail Energy Markets (AReM); Brookfield Renewable Energy Partners LP (Brookfield); Calpine Corporation (Calpine); the ISO; California Energy Storage Alliance; California Large Energy Consumers Association, Center for Energy Efficiency and Renewable Technologies (CEERT); Cogeneration Association of California (CAC); Division of Ratepayer Advocates (DRA); GenOn California North LLC and GenOn Delta LLC (GenOn); EnerNOC, Inc. (EnerNOC); Interstate Renewable Energy Council, Inc. (IREC); NRG Energy, Inc. (NRG); Pacific Gas and Electric Company (PG&E); Shell Energy North America (US), L.P. (Shell); Southern California Edison Company (SCE); San Diego Gas & Electric Company (SDG&E); and The Utility Reform Network (TURN). EnerNOC; the ISO; California Wind Energy Association; DRA; IREC; NRG; PG&E; SCE; SDG&E; Shell; the Vote Solar Initiative; and TURN filed replies on April 20, 2012.
1 Excluding the 2013 local capacity requirements.
