The California Public Utility Commission voted unanimously on Thursday to order state load-serving entities to procure a total additional 6 GW from 2029 to 2032 to cover an anticipated reliability shortfall resulting from demand growth.
“Eligible new resources must be either zero-emitting or otherwise eligible under the [renewables portfolio standard] program,” the CPUC’s order said. LSEs must also “pursue any viable projects that can still qualify for federal tax credits or other incentives.”
The order mandates that 2 GW be brought online by 2030, then the same in 2031 and 2032. Each LSE’s procurement obligation has been determined by its share of the managed peak on the electric system as of this year, with load forecasts taken into account, the CPUC said.
For instance, Pacific Gas and Electric will have to procure an additional 1,077 MW by 2032, while the much smaller utility of Pico Rivera Innovative Municipal Energy will only have to procure an additional 6 MW.
“It's critical that we closely scrutinize procurement amounts, and that we should all be concerned about any excess procurement that could needlessly add to ratepayer costs,” said CPUC Commissioner Darcie Houck before the vote to Commissioner John Reynolds and President Alice Reynolds, who led the proceeding. “And I think you took a really careful look here in this decision, and that we need to ensure that we have sufficient energy supplies while making sure that it's cost effective.”
This decision also transmits a reliability and policy-driven base case electricity portfolio and a sensitivity portfolio to the California Independent System Operator for analysis in its 2026-2027 Transmission Planning Process.
Outgoing CPUC President Alice Reynolds said the procurement order aimed to “thoughtfully balance the uncertainty with an identified need” and offers LSEs “alternative pathways for compliance, given the known challenges with resource procurement.”
Thursday’s CPUC meeting was Reynolds’ last. She was appointed by Gov. Gavin Newsom to the California Independent System Operator Board of Governors, with Commissioner John Reynolds replacing her to lead the CPUC.
“The commission does not intend for LSEs to procure resources at any costs, and that's a really important point,” President Reynolds said. “Instead, it allows them to show evidence of high, non-competitive or unreasonable pricing in demonstrating that they have made good faith attempts to meet these new requirements.”
The procurement order also gives LSEs flexibility in what can count toward the 6 GW by “allowing any future resource eligibility changes in the resource adequacy proceeding to flow through to this IRP procurement order,” she said.
