right
we're gonna start momentarily
we're just waiting for two
more members so we can begin
with a quorum and then
we can move forward from that
point so when for two members
-- things
this is the other person
Mayes hi I'm texting
chat right now okay
Cristina Garcia
Gloria
of
you want to start will
well like we have it would
have to bring we'll probably
have to just to the rules
there was another yeah yeah
if we can guess whenever
yeah yeah
afternoon I we're going to
begin with -- our utility
energy committee -- hearing
-- this is -- dealing with a
variety of topics but basically
focusing on the the evolution
in metamorphosis is taking
place in the energy sector while
maintaining reliability -- and
affordability on the road to
the carbonization -- it was
my hope that we would have a
quorum at the beginning so we
can improve our -- our rules for
this -- this committee about
will probably gonna have to do
that in another time because
I know we also have members
who are here who will have to
appear in other committees and
so -- we're going to begin with
this hearing a give them the
opportunity to participate at
various times along the way --
that will allow them to -- to
drop back and so -- in respect
for their time we're going to
begin let me just say again
thank you for for being here
this is -- informational
hearing will examine as I said
before the metamorphosis of the
energy sector of foundational
to successfully achieving
our environmental mandates
is keeping energy affordable
and reliable we know from
the energy crisis that those
critical foundations were
compromised in response to the
energy crisis the legislature
mandated the California
public utilities commission to
establish a regulatory program
a paradigm which mandates that
entities under the C. P. UC's
jurisdiction which mandates
that entities under their
jurisdiction maintain sufficient
power resources to reliably
Sir the man that regulatory
paradigm is fundamental to the
well being of the energy sector
this hearing will discuss the
recent improvements to the
resource adequacy explore the
deficiencies in other areas of
concern this hearing is being
held prior to legislation being
heard him this committee so that
led just say there's can better
understand the immediate and
growing needs of the electric
system at all levels of the
system there are a growing
number of entities assuming the
responsibility to procure energy
to serve the dim energy demand
of their communities each one
of those entities is playing
a vital role in maintaining
the well being of the
complex energy infrastructure
much like a car engine each
component is vital to the car's
performance I'm convinced that
by working together we can
address the challenges before us
and to continue to demonstrate
to the world the California is
a showcase for how to reliably
and affordably the carbonized
our energy infrastructure we
have two panels that will be
presenting to us today and give
us an opportunity to hear their
presentation and the question
each of these individuals so
let me call if I could the
first panel forward to join us
-- they will be providing an
overview on the changing needs
of the energy system of would
like to call for Michael picker
president of California public
utilities commission Dr Austin
brown executive director of
the university of California
at Davis policy institute for
energy environment and the
economy mark Ross letter
vice president of renewable
integrations and market quality
for the California independent
system operator to have a quorum
one more
and --
morning I Michael Victor
this big run about now
hi better okay great
slow hard to tell from here
I'm a kick off and talk a little
bit about our examination of
on the changes that we're seeing
in the electric industry in
California how their reflects
on our ability meet our clean
energy goals reliability
-- and some of the other key
elements of what it is that we
need to do I'll just start out
by saying that three years ago
I used to go to to the
legislative hearings like this
conferences the small meetings
where we are talking about the
death spiral of the electric
utilities due to the net
energy -- meter group of
fine roof top solar
and so currently the utilities
are still here although there
are a lot of stress but two
of the largest to than that
companies who actually -- sold
into the net energy metered
market are gone south solar
city and son Addison so what
I'm gonna try to do is spend
about ten minutes just odd
brawling broad perspectives and
trends as opposed to focusing
on any one particular element
that it was important to
remind ourselves that utilities
electric utilities have not
-- new generation since about
nineteen ninety eight at
legislative direction as a
picker if I could -- we've got
a quorum now so we're going to
of visually open the
meeting with the roll call
Holden present
Patterson here Burke
Carillo Chen
Cunningham Eggman
Cristina Garcia Eduardo Garcia
Mayes more
Muratsuchi -- sissy Jerry
quirk here Reyes
Thiago teen
Hey we have a quorum is there a
motion to adopt them thank
you there's with enthusiasm
thank you -- roll call on
the motion to adopt the
committee rules for this year
Holden hi Holden aye
Patterson Patterson hi Burke
Carillo I Chen
Cunningham Eggman Eggman I
Cristina Garcia Garcia
I Eduardo Garcia I
Mayes Muratsuchi
quirk aye quirk aye Reyes
he is I San Diego teen
okay they are a rules just
ended up to thank you members
present picker please continue
Sir I was just say this is just
commenting that the that the
legislature actually for a bed
the electric utilities to own
new electric generation after
about nineteen ninety eight --
they do that through contracting
into kind of a complicated
bilateral market the drives
the price down and gets the
best project based on least
cost best fit for the needs
-- but we're moving into a
different universe these days
in a variety of other ways and
so the changes taking place
on two axes one is technology
and the other is business models
and so there's opportunity
for customers to make choices
based on business models as
well as making choices about
technologies they will use
on their own out that most
of the discussion really takes
place on the generation side
because it's full of all kinds
of cool things like battery
storage and and rooftop solar
but in reality the most
important choice and the most
important opportunity for
customers to take control
has been in terms of energy
efficiency and other demand side
opportunities and I'll get back
to that in just a second but the
other pieces that energy itself
has just become a commodity
and and the services that
people used to be able to manage
their use of electricity is
becoming increasingly valuable
so let's to examine some of
the technologies that are
actually taking more and more
place in the marketplace energy
efficiency again it's reducing
demand for electricity through
building an appliance standards
probably the most significant
source -- changing the building
envelope through insulation
we're starting to see new
technologies come into play
that actually swap one fuel for
another -- grandma geothermal
for heating and cooling and
homes is new homes it's as
cheap as hot water heaters and
gas furnaces and it is cleaner
-- combined heat and power in
the industrial and and a large
commercial sector very important
to actually meeting our energy
needs early and -- the seventies
eighties and and continues to
be an important part this came
about as a result of federal
program called purpose -- I
won't go into the act in them
but it actually required that
if you could get a a license
to operate one of these cho
Chen facilities and the utility
had to take the contract it
was very very very -- affected
-- self generation I'm in a
point to the fact that Amazon
and Google for example --
at Hey I can actually buy their
own Nguyen plants they can buy
their own solar plants sometimes
in the desert sometimes even
out of state they pay a price
to send their electrons over
the wires to their facilities
and all over the state of
California that's about three
gigawatts of electricity it
shows up in most of our
over view of electricity use
as actually being a reduction
because it's new goes away
from those regulated utilities
rooftop solar that's about five
to maybe six gigawatts of
power again it looks a little
bit like energy efficiency
this is could be considered to
be a business model since most
of that was built through a
financial engineering product
than an energy metering --
though it's fairly complicated
but it involves getting a lot
of people to sign up for lease
-- that they the owner of
the solar panels is actually
the companies like sun at its
centre solar city or son run
they then sell those leases
into the secondary market so I
mean you have to find customers
have high fight go scores of
the fuel cell batteries this
is sort of a it's a choice of
people who want to pay more but
-- act asking for additional
reliability so it's really
applicables and not people
who have online sales -- crate
and barrel for example if you
miss the the Easter process
you sales market if you miss
the Christmas mark sell it at
seventy percent your sales cross
year she'll pay extra to make
sure that your servers have
electricity on those on those
weeks -- business models
sec so just to to mention
as of September two thousand
eighteen rather than having
three electricity providers we
have thirty seven what we call
load serving entities under
P. R. C. jurisdiction that
doesn't include the publicly
owned utilities -- that's
three I -- use nineteen CC
ace and fourteen electric city
service service providers their
important and I'll come back
to them in a second there's
additional business model called
pace property assessed clean
energy loans that is used
for people who who want to buy
a rooftop solar array in on it
or sometimes it's used as a
way to help finance those nam
projects and and
did spews for energy efficiency
it's usually sold door to door
or in other kind of high volume
sales tactics -- the recently
the consumer product
-- -- protection board
and have established by -- Dodd
Frank after the the collapse
of the housing market due
to toxic loans decided they
needed to step in because a
predatory marketing of these
prayer pace loans to people who
actually couldn't afford them
and couldn't pay them based
on the energy that they saved
direct access that's rob was
was the original -- deregulated
market of two thousand two
thousand one when -- we we had
a number of failures there and
day a lot of predatory tactics
by people were supplying some
of these electricity service
providers the legislature chose
to re regulate and made several
important reforms but there are
a number of people who continue
to serve that market the
legislature cap that it fourteen
percent of all the customer
usable actress city in the state
of California it's mostly in
the commercial and industrial
sector -- still very important
to the -- is one of the things
he keeps prices competitive
for for manufacturing in
other high energy intensive
-- -- businesses --
but it light they like it to
grow senator Hertzberg carried a
bill that would have lifted the
cap completely he agreed to
allow a more orderly progression
and -- it's now it's seventeen
percent and and
then -- he's asked us to come
back with the planned for two
in twenty twenty to lift the cap
completely so there's
a traditional utilities like
the investor owned utilities
and the publicly owned utilities
the irrigation districts and and
-- and if you co ops these
are a we used to be vertically
integrated which meant that
they own the generation the
Senate to the customers over
the wires and transmission the
day on and then they -- they
had a service area that they
completely controlled nobody
else was allowed to compete with
them there as you can see that's
change more recently we've
seen the growth of the clean
-- they keep me the the the --
the community aggregators --
their authorized in two thousand
three Marin clean energy
actually started up in two
thousand one there now flashing
-- two people pay a lot of
attention to them but as you
can see there's a wide range of
different -- business models and
technology that are all starting
to move into a competition
with our traditional providers
so here's a kind of where we
get into our uncharted and
potentially dangerous territory
where neither here nor there
we stepped away from that
model that the legislature
sent us back to after two
thousand and one but slowly
over time market share has
moved away and we have a lot
of different providers who are
regulated in different ways
if you know the act the cleanest
way would be if we had
vertically integrated utilities
or we went to fall competition
where everybody picked erect
lecture city provider and then
you had discrete transmission
and the street distribution
companies that's what Texas in
New York do it works for
them not clear if it work
for here but it's also clear
we're not going to go back to
a vertically integrated system
so the question is what do you
do and I just got tired a bit
about out some of the challenges
that we're seeing so reaching
our clean energy goals the the
clip of the CCA's two gigawatts
of growth from two thousand to
the gate -- to to eight
today during that same period
the investor owned utilities
-- actually contracted and
built -- something like twenty
gigawatts of power so there's
some value to having that
central Lusatian on that scale
SB three fifty requires all of
the load serving entities within
their C. C. A.'s electricity
service providers for investor
owned utilities to happily sixty
five percent of their our PS
eligible contract procurement
from contracts that are ten
years or longer they have to
do that by twenty twenty one
that's a real challenge for
some of these the the providers
like the CCA's in the S. P.'s
so based on -- just use some
information it was more of
readily available to us based
on the CCA's renewable that
short calculations and that
was presented to us in our --
in our to October thirtieth
two thousand eighteen our PS
report the CCA's will have
an immediate C. R. renewable
portfolio procurement need of
about six thousand nine hundred
-- can get what hours beginning
in twenty twenty the current
load forecasts -- indicate
their overall need would be
about sixteen thousand gigawatt
hours and twenty twenty that's
that's a step up in a talk a
little bit in terms of just the
peak capacity of what they've
been able to picture so again
they stay indicate to us they
are two gigawatts of renewable
energy projects that are on
development or already built
to serve load by twenty twenty
that's a list of about fifty
six projects that the total two
thousand one hundred and
thirteen megawatts we don't know
if all those projects will be
constructed my experience with
with the large projects that I
worked on between two thousand
and eight and two thousand
fourteen before I came to the
P. you say is it takes a lot
are you we were successful in
getting over over a hundred
and fifty large projects
over a hundred and megawatts
and it was -- it was a complex
task to permit interconnecting
in and help them seek financing
so I just will say it I think
it's going to be a challenge
the average project size of the
the the projects that currently
are indicated by CCA's as to be
under contract is about forty
megawatts but the median size
that means half of them are are
are are small our small because
this size or smaller is about
a hundred and seventy five
megawatts so at that media
projects sides of the CCA's
would need to procure more
than five thousand seven
hundred additional projects to
add a total of ten gigabytes
to California's electrical
grids which is a challenge
the challenge that's two orders
of magnitude larger than what
they've done so far fifty six
projects Hannah and that that
will that will that will be a
challenge it's made a little
more difficult because my many
of them may have customers
but they don't have experience
they don't -- assets so it's
hard to establish a ballot
she and to get financing from
many of the normal sources now
I'm I'm just using them as an
example because we had better
information on the projects
electricity surprise service
providers have some of the same
problems but they're usually
this many of the successful
yes peas not all are actually
out of state utilities who
own a lot of generation and
what they do is they sell some
of their excess power into the
California market through these
electricity service provider
contracts they are not bound by
geography that their opt in
which means a customer has
to choose them versus the
CCA's which are opt out so
-- but they're having the same
kinds of problems I'll just the
they have real it relatively
-- significant the procurement
challenges as well subsidies
different topic so all both
net net energy majors solar
CCA's and electricity service
providers don't pay their full
share of the fixed costs to the
system and this is a problem
that we've been struggling
to deal with than a couple of
different settings we're making
progress in the the P. C. I. A.
we have more to go it's a very
controversial project at one
point many of the parties wanted
this to move very quickly but as
they got into it all of the said
they wanted this to take more
time because they really had a
lot that they wanted to discuss
were losing this market scale
that I described before that was
helpful to getting that hundred
and fifty are projects of a
hundred megawatts a larger --
it's just specially going to be
a challenge and new technologies
like battery storage you want
to reach -- scale the people
can do a lot of good innovative
small projects but not many
of them if you really want to
scale quickly then you want to
have large a large companies
with big balance sheets to
be able to move a quickly
liability I know that mark
Crossley or probably speak a
little bit to this but just will
quickly up until last year
we maybe had two requests
for waivers from our resource
adequacy requirements this is a
fundamental requirement of the
California legislature after
the the the energy crisis
to two thousand two thousand one
it says that you must have
under contract and available
as much electricity as you'll
need for that biggest day of
service of your customers in the
year so two waivers
where people couldn't get it for
one reason or another last year
we had eleven waivers mostly
CCA's and and E. S. P. S.
this year we expect to have
another eleven it's tough
because when you get into
a small geographic area and
your serving customers there
there may not be enough
transmission to bring power
in from outside on those
big peak days so you need
to have a contract with some
generation that's within that
load pocket and if you can't
get that because you don't
have the ability to compete for
a contract because you don't
have a big enough ballot she
you're asking us for a waiver
ice consider that to be a
weakness in the design I think
it's a big problem we are
currently working on that we've
required rather than one year
contract because of the changes
in whose actually serving
electricity we're now requiring
three year contract that may
make it easier for people to
get contracts with some of those
generators we don't know if that
fails to materialize by the end
of the summer we may actually
impose a Central buyer and
there's currently a legislative
proposal to do that as well
so I just say that this is one
of the things that scares me
you may be a small company
but your failure to provide
electricity your customers
can cause a brown out they can
escalate in it can actually
affect customers in somebody
else's service area so
-- you know it
it's it's it's it's a challenge
I think we need to develop a
backstop for business failures
we've seen it happen before in
two thousand two thousand one we
saw in San Diego a small
electricity service provider who
was operating in the deregulated
environment similar to what
some of the new providers are
doing and they had didn't have
that resource adequacy they
were in a tight market the whole
west was really hot for a two
week period all of the access
electricity was going at premium
prices this is even before we
started to detect the gaming
and this company had not put
enough money aside to be able
to buy all the electricity they
need they were hemorrhaging cash
they went bankrupt two hundred
fifty thousand customers were
dumped in the lap of -- of the
incumbent electric utility who
had not counted on having a
quarter million customers show
up and say we need electricity
so all of a sudden day were
paying a premium price for the
failure of this other company so
we need a backstops to prevent
that from happening again
customer protections I talked
a little bad about predatory
marketing in the pace market we
have lots of indications that
happens in the nam -- around
we need to talk a little bit
about what's the pathway of
these processes continue for
the regulated utilities to
get rid of some of their fixed
costs public goods program
what happens to them so
all of the care programs and
other Ste I'll just say that
we looked a lot about this era
I think you all got copies of
our two reports the first is
actually our study of four
different markets where they've
tried these different models to
see what worked and what didn't
work how they dealt with this
provider of last resort for the
customers who might get dumped
how they dealt with reliability
and then here's our plan
going for now say that that
I'm in I am very honored but
the legislators of started
to write bills out of this to
actually address some of the
weaknesses that we've detected
I think that's helpful I
can't take a position on him
yeah because they're still
doing the fiscal analysis to
share with the department of
finance without which were
not allowed to take a position
but -- I'm confident that the
legislature is starting to see
some of the same risks that we
are starting to move forward
so I'll be happy to take
your questions perhaps
after the other two --
gentleman of presented
thank you brother picker
-- yes we'll take some
questions after the next two
presenters and -- Austin brown
-- Europe and then followed by
mark eight then thank you Mister
chairman and and thank you to
the committee for having here
today -- a to talk about this
is -- issue of utmost urgency
right were utterly reliant on
a reliable electric grid -- and
yet facing some pretty amazing a
new challenges were asking that
great to accomplish for us --
so I think it's it's a really
timely issuance really privilege
to be here thank you -- my name
is Austin brown I direct the
UC Davis policy institute for
energy environment economy --
we attempt to help make the
current research that's out
there available to -- exactly
that's what the people in
this room our making research
informed decisions affecting
the future of our energy and
transportation systems so
I've tried to put together a few
slides that contain some sort
of -- background information
if you're a visual person like
me you might I might use those
is the one that's got my name
on the front -- -- if you're
not a visual person then you
can just listen I will try
to cover the main points --
and if you're really in it
for just the summary that the
first slide after the title
fight has the the big picture
summary so I can go over that
and then -- if that's all you
want you can tune out -- or --
listen on and I'll try to go
into a little bit more detail
-- with some of these other --
some of these other points --
every got one -- so
so the summary which I'll try
to list here is that California
really is doing an amazing
job of leading terms of clean
energy goals we're reaching
further in many ways than other
states and really any other
country -- -- on the planet
and so far we've seen that
are grade is generally up to
the task -- and reliability
is doing -- at least stable
by most of our conventional
metrics that just look at how
many hours of time are we as
the average customer losing to a
blackout -- but other worries
raised by researchers another's
about potential brittleness
in the system and because
the grid and reliable across
the supply is so critical --
that means that we need to be
thinking in advance we can't
wait for the system to break to
understand that we need to fix
-- so in particular I call
that for challenges on within
considerable overlap with
present picker that'll hopefully
let me to be more efficient with
with covering them since they've
already been discussed to some
extent -- that are there facing
the grade and some of these are
of course also opportunities
right none of these are are
bad things are all really --
important features of our system
they just could provide of new
challenges the systems you go
and the for the -- call out
our integration of variable
renewable energy so that's wind
and solar photovoltaics -- the
incorporation of new business
models with specific focus on
the -- impressive growth of of
CCA's looking at incorporating
electric vehicles into our great
and with special notice to the
kinds of benefits they could
potentially provide to the grid
and then the on the present
challenge -- of climate change
other were tempting to deal
with from vacation perspective
can also offers significan
adaptation challenges to the
great is the over arching
question which will just begin
to touch on is and how high
can clean energy immigration
go with our current grade and
what those integration options
are to help us do more I'm
so next line I have a map --
of from the Lawrence Berkley
lab of the current renewable
portfolio standards and just
to make the point that a states
have been key drivers of clean
energy policy and none more so
than California and that doesn't
even include a hundred percent
clean energy goal -- by twenty
forty five -- that that's now
it really that the big target
in the electricity sector on to
California's been a big leader
there the state policies have
really helped get renewables
and other clean energy sources
I'm to the place that they
are -- where they are today
-- so the next looks at the
what we would face as we move
towards ultra high levels of
variable renewable energy and
this comes from a national
renewable energy lab report --
I should have actually tried to
avoid using any a public utility
commission or I SO charts and
reports year that's not because
I don't think that's important
as to want to try to tell my
colleagues -- what what their
own reports say so I really
try to focus on national lab
in university -- university
sources here so this is from
a national energy lab study
and each dot on this chart is
a essentially a grid and it's
craft on the X. axis but system
size the bigger grades are to
the right of that chart and then
on the Y. axis the percentage of
wind and solar and so you see is
that so far it's only relatively
small grids on the scale of a
single city or single island
but we might think of as a big
microcredit that have been able
to incorporate very high levels
of renewable energy and they're
usually because they don't have
a larger great as an option we
had to see some countries like
Denmark and Ireland right in the
middle there that have started
to incorporate relatively
high levels -- and then we see
California since this report
we've moved up that access is
we've added more wind and solar
-- but what the report found
was that immigration options
work right now to get up to
around the twenty five percent
of variable renewable energy but
getting beyond that to the sorts
of fifty percent -- of variable
renewable energy that we would
need to to accomplish our clean
energy goals will require new
policies and new efforts that
the great as it's currently
designed today would find it
challenging to incorporate
renewals up to that level
we also see that report not
shown here that diversity is
incredibly important so you
can't rely on only one source
you want complement resources
both by type of rules by type
of energy generation -- and then
also by geography so that we
integrate -- energy resources
from a wider variety it's much
less likely that the wind will
not be blowing in multiple
places at once and the bigger
of an area you can integrate
the more you're able to mitigate
that challenge on the next
new challenge facing electric
grid that I want to highlight
-- present picker already
mentioned we see a really
dramatic gross in community
choice on the map shown shows
the sort of current status
of the different community --
choice programs and -- their
dramatic growth and then the
right side shows up from --
UCLA report -- shows that by
and large these programs have
higher levels of clean renewable
energy then the -- the utility
sources that they are replacing
as a generation source so this
is provided a lot of value to
customers and they've often
able to source new generation
it at relatively low prices
-- but it does potentially if
not done carefully dissociate
the sourcing of power from
the planning process and
can create new challenges in
terms of ensuring reliability
I think of him more about
that on the second panel
on the third trend which is
maybe one that could provide
a lot of benefits if -- if
integrated with smart policy in
good research based approach is
the transition towards electric
vehicles so independent of our
religious the goals California
has very strong policies --
developing new markets for
lectured vehicles right now
the vast majorities vehicles
are just plugged in whenever
it's convenient for the driver
of that vehicle but it's --
entirely chief both technically
to make those vehicles charge
whenever the greed has surplus
capacity to do so so this is a
graph shown from a demonstration
project -- with about a
hundred vehicles between BMW
M. P. Jeannie just an example
tonight's you know small scale
compared what we would need to
be doing but you can see that
these vehicles -- so the the
the bottom a chart shows the
solar power coming on during
the daytime and then the Orange
Line is when those vehicles are
charging and so they're set to
essentially charge when they're
surplus solar available on the
grid and it macroscale we know
that before too long we're
gonna have a surplus during the
daytime of solar on most sunny
days and it's already happened
on a few days so if you could
set up select vehicles are
basically able to soak up that
demand and potentially as a
curse a couple of times in this
a demonstration project tensely
return some of that power to
the grid in times when prices
are high and demand is high
and supply is less available
so that's more integration
of luck vehicles could be an
enormous -- asset that can help
manage excuse me I manage
the future of the grid the
last risk and -- the one that
I think even if we act now
-- we will be dealing with
for a very long time -- is
the increasing risks that
climate provides to the grid
-- so -- there's challenges
to essentially every single
one of our -- energy supplies
that can be made worse into
a world of a changing climate
-- risk from warmer water
supplies can actually make
thermal generation from example
for example natural gas less
efficient -- and in some cases
at the temperatures get to
hide plants are then unable to
operate -- warmer weather can
also make transmission line
sagging can lower efficiency
-- at the potential for drought
-- would affect hydro power
supplies we actually seen
that several times of the past
years and increased drought --
potentially -- sustain drought
due to climate change a could
exacerbate that problem I'm
changes in weather patterns
like clouds and wind patterns
could affect our ability to
forecast the future of solar
and wind -- and it would affect
Cooley demand which is a in some
cases the dominant -- energy
demand at different times of
day out and that's without
even getting into wildfires
which I think we'll have to
leave for deferred discussion
about which would expects to
to increase dramatically in the
the woman climate were CA so
that provides this over arching
the challenge that we're going
to have to ask our great to
be able to -- to handle all in
the context of incorporating
the new clean energy options
we need to avoid making the
climate challenge even worse
as we go so the good news at
the end is that there are many
immigration options available
-- if we can accomplish this
energy transition in a measured
and effective in research driven
away I'm I won't go through
all of them we tend to think
of storage as the one that we
would just want to incorporate
but there's many options that
are probably cheaper in most
contexts so there's options
in efficient system operation
in the development of a new
an efficient markets -- in
managing load in some cases so
there's a already examples of
that industrial -- context but
be able to expand that into
other kinds of flexible load
I'm having flexible generation
available to meet unexpected
demands -- improve networks
and then incorporating storage
where it makes the most sense
in the grid so a research in
forming part portfolio -- based
approach is needed here and I
really applaud the committee
for taking on this issue
that way thank you very much
thank you for the opportunity
for -- presenting this
important topic -- my name
is mark profit arm the vice
president market quality
and renewable integration
of the California IRA so
yes -- manages the high voltage
power grid a and runs the
wholesale market for about
eighty percent of California
be touching on three points --
and those point to built around
our responsibility as bouncing
area those responsibilities
include balancing supply and
demand on a second by second
basis ensuring security
of the system meaning we
don't overload any lines and
we are prepared for loss
of a line or element without
overloading the parallel line
-- then maintaining reserves
if we lose a resource we have
to have sufficient reserve
capability to ramp up in case
we lose a resource at any given
time and our last responsibility
is around restoration if we
have a major blackout and we
have to restore the system
do we have the resources and
the capability to restore the
system my comments today are
largely focusing around the
balancing responsibility and the
challenges that are were facing
in that area and forget
jump into those three points
I I kind of the equivalent
Z. the challenge of changing
a all four tires of your car
while driving down a bumpy road
at the same time and --
and all the tires are being
purchased by not you the driver
but multiple people out in
the industry that are bringing
you the tires so the point is
that there's a timing issue
there's a sequencing issue and
-- it it's a juggling act
to say the least the three
points are gonna be touching
on is is the fact that
-- in balancing supply and
demand we have increased
variable resources and we must
dispatch other resources down
or increased demand when we have
a surplus of supply at the
same time when those very well
resources are not producing we
need to be able to balance the
system by your ramping up other
resources during those times
currently the second point is
that the natural gas fleet is
currently used and many of
those times when we have to make
up for that supply that's not
delivered by very well resources
lastly -- imports also
make up to the -- --
supply when we are insufficient
with a not very well resources
and those times that were not
insist were insufficient for
resources are not infrequent
okay and I'll get into that
more as I discussed this
all the factors point to a
trend as we transition to a
low carbon grid that I also
may find meeting its demand
when the renewable supply is
not producing such as evenings
are stormy day is becoming
more and more difficult and
therefore we'll all need to find
innovative solutions that work
together to reliably operate
the grid I will expand upon
these points and the innovative
solutions that the we should
consider at as a as I assembly
is a must be considered to
address these operational needs
at a reasonable cost as the
great continues to reduce
reliance on emitting resources
California has a diverse set
of resource -- than resource
mix in the mix is continuing
to evolve the single most
significant change over the last
few years has been the rise of
renewable energy currently
the over the years we've we've
got to the point where about
one third of our demand is
being met over the year by
renewable resources but from
the operator perspective we look
at more ground yearly what is
it happening on any given dot
day or given our and what we've
seen is that we've seen as much
as more than seventy percent
on a given our of the demand
being met by actual renewable
resources in fact we've
had we've on may twenty six
of last year we get the point
where ninety three percent
almost a hundred percent of our
demand instantaneous the man
was being met by carbon free
resources if you include nuclear
and -- hydro resources so we
are being we're we're making
success the last I want to
make on this is that as we
as a result we have actually
reduced twenty two percent
of but reduced carbon
emissions from our dispatch
relative to twenty fourteen
levels by twenty two percent
these numbers all indicate
we are making significant
progress towards meeting the
state's climate goals and
that Wilk need to continue to
unfold opportunities including
technological advances and
pioneering policies to support
the shift to a greener grid
of the future but as we do
so we all my we also must
remain mindful of the growing
operational challenge we are
facing why will you
why would we will continue to
reduce our reliance in carbon
emitting resources there will
remain periods when solar
and wind production falls off
in the near term during such
conditions will continue to
rely on gas generating plants
as well as imports to serve the
demand and maintain reliability
in the long term we will need to
deploy other technologies and
systems including things like
storage or repurpose ceasing
the gas generation fleet to use
renewable gas in order to
reduce the carbon footprint
of maintaining reliability
to achieve this fundamental
transit transformation we will
need careful consideration about
sequencing timing technical
capability and the cost of
replacement alternatives to
the gas fleet to ensure we
maintain reliability during this
transition why will you while
we expect to have and be
able to leverage periods when
we have abundance of clean
supply we must also be prepared
to meet the demand when those
cloudy days when those --
or when there's little solar
production we observe on days
with significant cloud cover
like we've had experience
recently across the state that
soul resources can read can
reduce reduce in production
relative to their cat capacity
to only ten percent or twenty
percent of their installed
capacity we have more than
twelve thousand megawatts
of resources now on the grid
that's not including the behind
the meters -- solar resources
so in a lot since January
of last year with that
amount of capacity we have
experience about twenty days
when solar production actually
fell below five thousand
megawatts relative to its troll
thousand megawatts capacity
indeed on January fourteenth
from January fourteenth
January seventeenth of this
year we actually saw the
four consecutive days that
the production was the maximum
production for the day of the
solar was as little as two
thousand and as high as four
thousand megawatts so that we
can have sustained long periods
of of lack of production from
these renewable of variable
resources I just spoke
about the grid side on the
behind a meter side we have
about six thousand megawatts of
the band now being met by
behind the meter solar resources
similarly when we have the cloud
cover about eighty percent
of that six thousand megawatts
demand comebacks comes comes
back on to the system and
requires us to be able to serve
that so if you consider the
grid side and the behind a meter
side between a cloudy day and
a non cloudy day you can have
as much as fourteen thousand
megawatts swinging in terms of
renewable production and when
you do all that production
doesn't exist or doesn't
produce you have to make that
up fourteen thousand megawatts
of the Cuillin to about seven
nuclear units of resources
since twenty fourteen we have
been discussing the change
an operational conditions
since then we've we've been
watching in managing over
supply in the middle of the
day while the at the end of the
day we managed that spike of
demand that have to meet the
evening ramp when the sun was
setting the increase in these
challenges hasn't come faster
than we had expected because
the successful adoption of
solar generation in the Golden
State we now are projecting
that will need between fifteen
and twenty thousand megawatts
to be able to be ramps in
over a three hour period
as I pointed out in my beginning
testimony the evening ramps
currently being served by a
combination of imports and
gas resources as well as hydro
what we've observed is that
the reliance on imports is
becoming more challenging there
are increasing periods of time
where the especially in during
the highest low periods where
there's a scarcity of supply
outside the area because that
generation is meeting the demand
outside the area it may not
be available so what we have
thirteen thousand megawatts
of import capacity wires in
the air to support that we
see like it last year during
our peak conditions only three
thousand megawatts of imports
coming in so if we assume
that there's going to be ten
thousand megawatts we may
be assuming in correctly the
availability we need to secure
that if we're going to rely upon
the economic lastly the
economics of the existing
ghastly is changing the
renewable energy production has
brought holes whole sale energy
prices down as well capacity
payments are going toward a
renewable resort resources as
they well should be but that
results in the fact that these
gas resources are becoming
more and more economically
distressed because they're
not being picked up through
the resource adequacy and the
revenues through the wholesaler
you market -- insufficient
yet as I previously discussed
there are times when the system
will need these resources to
be available and if they start
retiring in large numbers
we will have those resources
available so the continue
down the path of reliable and
affordable energy supply the
I also recommends that the
suite of solutions be deployed
first diversify the resource
fleet both geographically
intent technologically at
this is described earlier
enable incentives for demand
participation and increased
energy efficiency so it's
a responsive to the system
conditions as these change
leverage periods of abundance
clean supply to de carbonized
other sectors including the
transportation heating and
cooling sector promote energy
storage on the system to
capture abundant supply for use
when the supply other support
when that supply is scarce
foster regional collaboration
to share an insurer resource
efficiency across the region
ensure all resources including
renewables are providing
essential reliability
services not just energy
so that the search sufficient
operation visibility and control
those resources bill
flexibility into all resources
including the exist making the
existing gas fleet more flexible
and then lastly secure import
capacity if you're gonna rely
upon that so you ensure that's
available when you need it
using one of these alternate
will not solve the challenges
that we face we'll take a
combination of these solutions
to meet the reliability needs
and I can't tell you how much
of each at this point I think
they'll be a a discussion about
how to do it at the least cost
diet so pledges to commit
at pledges its commitment to
work with you all as we plan
and prepare for the future
thank you very much thank you
that I appreciate all three
of you coming today in your
presentation I just wanted
to kind of laid off with two
questions one -- to you --
Mister Ross letter and then --
Mister Baker one for you and
then I'll turn to the members
of obviously over though it your
your presentation talk a little
bit about obviously looking
at grading greater efficiency
for the grid and how of
we can utilize resources
more efficiently as we look
at the intermittent periods
of time when we have solar
-- not -- working force
or wind -- and --
the last couple of years there's
been the conversation around
reach allies in the grad and
now we're talking a bit about
the -- resource of the energy
imbalance market as maybe a
way of growing into a more
regional as approach can you
talk a little bit about how
the hi so is looking at
of the strategy around and
energy imbalance market and
how that is going to be
of structured in such a way to
address some of the concerns
and issues that you're sure
outlined sure and I'll be brief
the -- the motivation of the
energy about the market was to
-- allow for effectively
enter our in trial were trading
to occur if it was economically
beneficial to occur it's helped
with renewable immigration
because it allows police when we
have a surplus of supply
it allows us to actually
use that supply to dispatch
other resources in the region
down and then when we are in
the evening and we need supply
to come back in we actually can
leverage and use the rest of the
-- energy imbalance market and
our neighbors to provide that
supply it builds upon
the fact that that supplies
available it doesn't guarantee
that that supplies available
so it really works around
-- minimizing are maximizing
the use of the available --
capability and so the point
I want to make is that it
doesn't address a making sure
that sufficient supply to is
is available nor does that
ensure that the right commitment
of resources is occurring
on a day ahead basis some of
these resources you have to
make commitments because they
take a long time to start and
that's where we believe we can
enhance and leverage the energy
imbalance market and extended
into our day ahead market and
be able to make larger decisions
commitment decisions day ahead
doing so we think we'll have
significant benefits com and
leveraging eight and energy
amounts market but that
extension into their market does
not address the longer term how
do you plan the system both from
a transmission perspective and
and from a resource procurement
perspective it doesn't enable
that to occur -- there may
be regional opportunities as
are still left on the table
-- -- if you only go as
far as the day had market
thank you for that miss
Parker -- back in February
the commission -- did some
reforms to the resource
adequacy program and and in
that program there was --
-- some detailed direction on
-- looking at a capacity --
-- I'm sorry not capacity but
the -- June the central
procurement you talk a little
bit about it in your in your
presentation if you're expecting
a report to come back at the
end of the year and it's gonna
guests Dillon at how this
would have -- be structured
what which your assessment on
the reality or the viability
of having a detailed plan
for center procurement authority
in place by the end of the year
well -- first there was very
little agreement between all
the parties as to whether we
should have this a centralized
procurement mechanism -- there
was -- there some of folks who
said bill maybe after we've
gotten the easy stuff than
there can be a residual fire
to take care of the hard stuff
-- nobody's really quite
come to grips with how you'd
pay for it -- there are some
people who favor a capacity
market similar to the ones
that we see in other states as
opposed to a bilateral buyer
similar to the way that we
care -- lecture city contracts
so that service is waiting
to see if people can develop
their thinking a little bit
better if there's consensus
what people did agree on
is it would probably allow
on some of the smaller players
who have a hard time in really
rough and tumble competitive
electricity markets to be
able to get contracts if they
bought three years ahead they
might be able to tell a a
I operator of a power plant
look it's not going to be year
to year we're going to give
you a three year contract are
you willing to deal with this
now so that's worth where
we left the decision were asking
people to come back and tell
us what is the best solution
to trying to make sure that
there's some way to fill in
the blanks for all these new
entities that are entering the
market place you can't obtain
market they can't can't obtain
the all the reliability that
they need in the market place so
again because it's still a
process I can't tell you in that
I have an opinion until all the
evidence is in but the
at sign commissioner tells us
that we should have a decision
by October but I don't a I don't
see that we can we can avoid
having some way to fill in those
weak spots again we there's
no one solution for all
these different business models
and all these different ways
people are by and technology
that everybody will agree on
and so we're trying
to be as a gnostic as we
can about CCAC the espys
in direct access about whether
people self generate but we
know that we have to keep
the great hall and we know
that a large series of large
three large central per cures
have made it work that may be
that what we need to do some
form of that for everybody
who can't make it work and
they're just gonna have to pay
thank you any
questions from members
structure thank you
Dodd
I'm gonna try to be brief
Mister chairman side but this
we are twenty years into
the twenty first century state
of California is the fifth
largest economy on the planet
and we are literally sitting
here today talking about
a grid that is
significantly on reliable
Mr rustler I want to
ask a little bit about that
to have eighty percent of the
electricity in the state of
California managing yes
fifteen thousand to twenty
thousand megawatts is
necessary to rapidly ramp
up right yes
and the
apparently that has grown I
I thought it was somewhere
around thirteen to fifteen
free look about in twenty
fourteen to start about eight
eight thousand megawatts over
three hours it's increase now
to -- about fourteen thousand
and you continue you you AB
characterize your
effort as an automobile
going down a bumpy road changing
four tires and
-- not knowing when or
if the tires would show up
I would ask you straight
out question that
analogy seems to me to
suggest that your task is
if not impossible borderline
impossible I want to ask
you your level of confidence
that given the sets of
circumstances that
we will have an electric
grid that will not
go brown or dark in the near
future I have a concern
about that and I
don't want to miss read your
testimony but it seems to me
that there is an undercurrent
in your own testimony that
suggests this is a very very
difficult challenge to meet
I am expressing that there
is a difficult challenge and
I would like to emphasize
we have met the challenge
to this point we have been
able to operate the grid
reliably the challenges
will leave and maintain the
right system set a resources
and capabilities to continue
down the path of a reliable
operation and I'm feel confident
that that is possible okay
I am hopeful that the
systems and the processes
and will be in place that we
will bring the right resource
and right resource capability
to bear to maintain that
reliability we look forward
to continuing to work with
the CPUC in president picker
to ensure that the right set
of resources at the right
time in the right location
are all there to maintain
this reliability I am not
suggesting we should shy away
from the challenge I'm saying
we have to be thoughtful about
meeting that challenge with
respect dem to reliability
is there some kind of a
definition of what we mean
by reliability I've been
here six years I think the
reliability that we were
achieving six years ago was
a better kind of reliability
than we are achieving presently
I think that affordability
is a question of how much
and the definition can you
give us an idea of what the
definition of reliability
is and what the definition
of affordability is I think
that's a longer discussion and
I have to be able to answer
in a short period there are
measurements of reliability
and they measure from -- howl
-- north American electric
reliability -- Burke
basically measures that they
measure how we perform to meet
that reliability you can also
measure reliability in terms of
the probability of loss low
is -- probability of losing
also and this is this is
used by the commission to
ensure that that loss of low
probability is maintained
above a certain threshold and
ensure that those resources
meet that level reliability
you suggested that the
electrons that keep our
grid balanced often are
from the ghastly -- and
-- oftentimes from -- imports
and you talk about a date
February eighteenth sometime
back he gave me a report that
to be my birthday in which
the balancing act was on kind
of a nice edge again of this
thirteen to fifteen thousand
dollar ramp up fifteen thousand
megawatt ramp up very very
quickly when fifteen thousand
make a lot of demand was
coming on line and the like
it seems to me that we have
been managing this grit
reliability with the kind of
electrons that some in this
California legis lecture
would like to see us eliminate
and I have a
a concern over what amounts
to morally acceptable
electrons an immoral electrons
and your aye if I'm hearing
you correctly it is the
-- less than favored electrons
that have kept us balanced
and yet we continue to
try and push and move farther
and farther away from the
very kinds of electrons that
have been available from sources
that keep us balanced but
they're not the sources that are
favorable I think that
if the fines a reliability
problems as we move
off of the the gas fleet
what we places the reliability
that right now you are being
we're relying on that correct
so February eighteenth I noticed
that that day -- we run a
nice edge and it was imports
natural gas and other forms of
electricity and electrons that
we are trying I guess our dead
level best to eliminate so I
I again I I I I still
have an on easy feeling
about the reliability as
we move forward can I get
the feeling that you are hopeful
and optimistic but that is
aspirational the reality of
the grid is that it is physics
and I sometimes wonder if
the aspirations are warring
with the physics of electrons
thank you I'll just say it
to my point is that's why I
mentioned that we have to be
careful about not letting these
resources go that we rely upon
the reliability until we have
no and are secure in knowing
that those replacements
provide all the reliability
needs that we will need
and that is the channel
with any other
questions the quirk
so
first of all obviously this
is a very difficult problem
it's a lot easier our
with integrated our providers
particularly if they can be
just three of them they have
lots of capital it cetera so
we're definitely in a place
where we don't know what
to do next certainly for
something like serving a week
where the sun isn't shining and
we don't have a terribly large
amount of wind either -- we're
going to have to have storage
and that's multi billion dollars
and -- the cheapest type
is a course pump solar and
it's not clear how you get and
you've actually stated this
is not clear how you get these
many different small agencies
to get together to purchase
that and that is certainly
something that we like to do
-- and you really have a dress
this and you said there really
isn't a solution right now I'm
hoping when the CCA's in other
load serving entities come
up they'll give us some ideas
but I think it's important to
stress that we have reliability
now but to have it in the
future for going to more --
renewables we're going to need
to make major purchases and it's
not clear who has the credit
and the ability to do this so
but again you haven't told me
there's a solution so there's
one other thing I'm worried
about P. Jeannie went bankrupt
not because of particular
claims from fires but because
their credit rating when to
junk bond status at which point
they couldn't borrow money
and further their providers
of electricity were insisting
that they pay cash up front
-- or at least have cash in
the bank to show that they
could buy the energy this is
about to happen to southern
California Edison it's now one
click above --
-- junk bond status
if they go to that status
still be out in a couple
of weeks even though again
date date we don't see a threat
right now to them not being
able to pay off these but
none the less it is happening
the P. you see has tools
which it has used for example
during the -- San Bruno
-- gas explosion to say
alright rate payers will pay
for such and such and will
guaranteed that de
stability of fee utility
-- to continue to do business
without having to go into
bankruptcy to get -- a
debtor financing up do you
do you see Mr picker
a way to help --
southern California Edison over
the next month or so well this
thread hangs over their head
so having had lots
of conversations through
our financial adviser with
capital markets I'm not sure
that there is anything we can
do legally that will satisfy
them they are looking for
first and foremost changes in
states inverse condemnation --
definition they would like to
have a way not just to know what
the eventual will rate
payer contribution will be for
-- utility costs of wildfire
recovery and victim compensation
but they want to know it soon
they want to know it right
away that's very difficult to
do because the statute that
the legislature adopted in the
governor signed SB nine a one
requires that the utility come
forward with an application
that specify the cost there
won't be known right away so
there's a lack of confidence
in any of the tools that
are available to us so we're
struggling with this along with
the governor's office in his
strike force to find a solution
that both protects rate payers
insurers reliability of our
electric supply and ensures
that like that there's a a fund
it'll compensate those victims
who were who are entitled to
payment by the utilities and
they make their utilities
investable but I think that
that so far nothing that that
we have put into statute or
in to regulation is going to
satisfy the rating agencies
okay so just one more problem
down the road all right
thank you very much thank you
thank Mister cook I am
other members wanting
to -- question this Pam
right thank you appreciate your
participation will a call up
the next panel the load
serving entities and generation
storage providers Colin the
cushioning vice president of
the energy procurement and
management southern California
Edison Scott that murder Chau
senior adviser regulatory
affairs California's solar and
storage association Beth Vaughn
executive director California
community choice association
and chance money Jones chief
executive officer independent
energy producers association
welcome to you all and you
may begin your presentation
-- good afternoon a vice chair
Patterson and -- assembly
committee members -- my name
is Colin cushioning home a
vice president at a southern
California Edison responsible
for power supply energy
chairman and market operations
can preset the opportunity to
be here today to talk about a
very important issue reliability
like lead off by noting that
SB one hundred -- was a very
proud culmination of a long
history of California energy
bills of that will now be a
seek to provide a higher percent
clean energy in California by
twenty forty five and its C.
fully supports this objective
however if you've heard in the
earlier panel we must do so
in a manner that ensures the
lectures city is reliable and
affordable to all Californians
if we fail to make reliability
and affordability our priority
we will fail in achieving our
clean energy goals and we'll
certainly fill California
in order to succeed we have
to carefully plan our energy
future and we have to make sure
that all those serving at ease
CCA's energy service providers
I -- use PO use have equal
responsibilities and achieving
our goals may briefly touch
on reliability clean energy and
market operations in the context
of the ongoing fragmentation
of our load serving at ease
in doing so I want to fully
-- underscore that has and
does support customer choice
we support who they get their
electricity from in technology
that they -- they deploy
but we must balance customer
choice -- with a very rigorous
planning an accountability
framework to ensure that all
load serving eighties of or
able to -- fairly meet their
-- the requirements are clean
power goals so beginning with
reliability a California has a
resource adequacy framework that
requires the jealousy to procure
it's pro rated share of system
local Arian and flexibility
resources need to ensure
reliable electric system and
because our our a requirements
have been imposed on a year had
a month ahead basis resource
adequacy is really only
procuring existing resources
it's not procuring new resources
the way we secure new resources
in the past is we've -- through
the CPC's long term procurement
plan process more recently
the IRP process integrated
resource plan process that water
the investor owned utilities
to develop the needed resources
are to ensure that there's
enough electrical capacity
on the system the the -- use
have their own system they
have their integrated resource
plans and and and through their
own boards state make sure
they have sufficient resources
our resource that I was the
program has worked well to date
of because when we first started
there were three investor owned
utilities and about a dozen
years peas and investor owned
utilities procured eighty five
percent of everything that need
to be purchased and because we
understand our system so well
we made sure we purchased the
things that were needed to keep
the crab reliable and we could
afford to pay a premium for that
because we could socialize that
premium across all customers
today arm the investor owned
utilities are gonna be serving
less than half their load of
we have is many is a fifty
low serving eighties coming into
existence by twenty twenty one
and the we're not no longer
able to go out and secured those
expensive resources because we'd
be disadvantaging the customers
that stay with us so what we
do is we go out the care the
resources that technically meet
the requirements but that make
up this cold but in in in --
in a collective sense do not
fully meet the requirements
and then the cal I SO has to
backstop those resources that
leads to very expensive double
procurement so we need to
come up with a better system
than having each Los serving
ID trying to buy the lowest
cost resource that technically
meets the requirement even if
it's not fully effective in in
meeting the reliability mandate
the other challenge that we
have in our resource adequacy
program is that we do have some
large generators -- that make it
very difficult for smaller loads
serving entities to purchase
present picker the CPC briefly
touch on this but just to put
it into context we have some
some generators that their size
is greater than the load of
some of the smaller ESP isn't
CCS and if we have to procure
that specific facility who is
going to do it -- if you were
running your house you would not
appreciate it if forty people
showed up and sub all rent your
kitchen all right your bathroom
all right your garage alright
your attic you want somebody
to rent your whole house and
so we got to come up with a
mechanism that will enable
these larger facilities that
are needed for reliability to
be cared by a large collection
of of load serving at ease
so we think two things are
necessary to get there the
first is we do think that
central buyer framework should
be adopted for local resource
adequacy and recognition that
these transmission constrained
areas have either very limited
resources to procure that
you can't allocate to forty
different entities or they
have very large generators
that you can't allocate the
forty different generators
we also believe that the I'll
use who are the reliability
custodians of our grads should
be the ones designated to be
the central buyers and that they
would procure those resources
and allocate the net cost
the net benefits to all those
serving entities through the
legislature's and the CPC's cost
allocation mechanism it's called
the cam it exists and we've
already developed thousands of
megawatts through this process
so from medicines perspective
we don't think we need to
revisit how did you central
procurement it already exists
you just need to instruct the
CBC or the CPC needs to adopt
the utilities as the central
buyers in doing this I want to
be real clear on something the
utilities don't make a profit
and reselling power we're
not allowed to by law we pass
these costs through as their
incurred we may actually lose
money the CPC says that we did
something inappropriate but we
don't big money the reseller
purchase power so this would be
strictly reliability function
that would enable the multitude
of Los serving eighties that
are on the system to still do
what they can do but maintain
reliability which is got to
be our mission number one
a second to ensure that we
timely build the needed new
resources in a way that can
be -- the can be allocated
to all although Cervantes
the CPC needs to be given the
ability to help procurement
-- enforcement authority on
all the jurisdictional low
that it regulates today the
integrated resource planning
process the only -- can impose
procurement requirements on the
utilities and energy service
providers and CCA's submit
our peace the CPC are but
they will not -- necessarily
be held accountable to perform
relative to those are peas they
can decide to procure something
different -- and that puts the
state's reliability at rest
because if we thought somebody
was going to do something
then they did something
different there there could
be an unintended consequence
up to changing gears your
quickly on renewables report
had a great discussion on
renewable so I'm not gonna
repeat -- much of that I do
want to identify that the state
California's relied on three
investor owned utilities to
develop the largest renewable
flea and the state in the
country skews me -- between
three utilities were projected
to be delivering over fifty
thousand gigawatt hours are in
a one or two starting in twenty
twenty one already basically
there now of which more than
meets the utilities -- our PS
requirements in contrast the
CCA's and use peas are have
through the reporting to the CPC
indicated that they cared about
a third of their actual our PS
requirements -- if effective
twenty twenty one no I'm sure
this is a start up issue because
a lot of these low serving as
have just begun operation up
but twenty twenty one is a very
important date right because
under -- SB three fifteen SB one
hundred two thirds of our our PS
has to be long term and so the
resources have been procured yet
they can't deliver and twenty
twenty one so we want to make
sure of that there's appropriate
oversight of the CCA's needs
peace making sure that they are
procuring a in a timely manner
the necessary renewal resources
to allow the grid to operate
both reliably and to meet our
carbon goals we think the CPC
should have more oversight
and and and check and forty
enforcement authority to make
sure that the -- -- that those
are PS schools being met in a
timely manner what we consider
whether the the vote serving ID
is in a position to circle out
of final issue I want to
touch on here's affordability
efficient market operations
the investor owned utilities
are required to bid all of the
resources that control into the
market cost again we don't
make any money at this we built
it because when we control when
we served eighty five percent
load that meant that the market
generally cleared at cost that
was a really good outcome for
customers now that we're going
to have about fifty load serving
entities and utilities are
serving less than half the load
none of those other entities
have a cost based procure
-- bidding mandate they will
logically think about what you
would do yourself they will seek
to maximize the revenues for
their resources so we have an E.
S. P. or CCA that has a critical
energy storage project and their
bidding in the market but I
could say I just want to cover
my costs bigger say how can I
maximize the revenue for that
second reduce the cost for my
customers of so if if we have
a multitude of entities bidding
yeah I profit maximizing mode
which is how markets operate
not saying that's not not how
market should operate we are
going to increase the cost
of power to all customers in
California and we make literacy
less affordable than it is today
SB very difficult to electrify
of the the transportation and
building sectors that it's
going to be incumbent upon us
to do we want to hit our carbon
goals -- and we're certainly
going to make it difficult
for low income customers to
out to pay their bills so
with with those concerns just
want to remind the committee
here that the electric grid is a
very complex operation that must
be very well managed I in order
to -- to operate it requires
perfect balancing is Mister ruff
leader from cal I SO discussed
and the cheating our first
that fifty percent renewable
goal is gonna be considered
relatively easy to getting
the last fifty percent clean
so many things need to happen
on the grid to get the last
fifty percent clean we have to
have a coordinated centralized
planning process and we need to
make sure the CPC can enforce
procurement requirements on
although serving ID's and to the
extent that those requirements
are not readily assignable
because it's one project word
something very complicated that
can't be given out to fifty
people then we need to look to
the utilities to the central
buyers for those projects with
appropriate cost allocation
and a benefit allocation
central planning social equity
and reliability objectives
need to take the priority over
individual Ellis E. procurement
preferences and with that I'd
appreciate your time here today
thank you appreciate that
-- except Scott Russia
hi good afternoon and --
thank you very much for the
opportunity to come and --
represent Kelso and a sharp
perspectives on the role
that distributed energy
resources could play in
ensuring reliability and
and and affordability --
I have three key points I'd
like to make up first DVRs
can and do contribute to
reliability today I'll talk
about that more -- second
they can do a lot more and
so I'll be I'll be happy to
operate on the ways that the
commission the I SO in the
legislature can help without
and then third we do contribute
to affordability by providing
savings to customers today
and we've seen a growing
trend and cancellations
of utility infrastructure in
transition infrastructure due
to declining loads thanks to
efficiency rooftop solar another
distributed resources I'm going
back to the first point D.
ours contributing to reliability
through the PC approved demand
response pilot program that the
tram demand response auction
mechanism of flexible loads
in customer cited storage are
already providing qualifying for
life resource adequacy capacity
to Alice sees by participating
directly in the chi so market
so they bid and just like a
generator does they --
have a price scheduled they are
able to bid in a at at at any
certain price like a generator
does and when it's cheaper to
use demand response our customer
cited storage those resources
our dispatch directly by the chi
so and that saves customers
money and it and it delivers
resource adequacy credit for
the participating let's serving
entities that's just beginning
to scratch the surface it's
still a relatively young
market but in addition to
that supply side the are where
the demand response resources
participate directly in those
markets distributor resources
also contribute substantially
to reliability by reducing
peak loads and reducing
peak loads -- Ellis sees
are a obligation is reduced in
the future because it's that
peak load that sets each are
a our obligation for each LSE
one obvious example of that
is that we used to have peak
loads in the mid day -- to you
you rates had peak rates from
twelve to six or eleven to
six because that was the peak
load and as you well know with
the dot curve because of the
abundance of solar energy solar
energy has substantially changed
that and push that peak back
but for several years there
a solar energy was contributing
drug directly to reducing
the then current peak --
so now that's just a quick
overview of how de ours are
contributing to the liability
today we think the ours can
do much much more we're close
to hitting the original goal of
the California solar initiative
-- you may remember it was
originally called the million
solar roofs initiative skis
me would you define D. E. R.
a distributed energy resources
thank you for
we are project that California
will literally had one million
so every sometime in the
next few months were at over
nine hundred thousand now
-- that's a that's a big
deal and that's a lot of
energy being produced I think
-- mark cross leader said six
gigawatts of installed by --
behind the meter or customers
I to capacity that's actually
a little bit out of date
looking at the most recent
numbers it's as well over seven
give gigawatts of capacity
that's easy to think that energy
storage is a relatively mature
industry as well it has been
around for a few years the
soft generations and of program
has been funding storage since
two thousand nine and we hear
a lot about storage with a
big name companies like Tesla
often in the headlines but
compared to the nearly eight
thousand megawatts of rooftop
solar installed in California
we have only a little over a
hundred megawatts of installed
stored under the está program
there's another two hundred
plus Michael what's in the
pipeline though so relative
to the dot curve it's still
a relatively small amount --
I want to personally thank
you the legislature for passing
Senate bill seven hundred last
year -- that will extend the
está program for other five
years we estimate that -- that
program in the extension of
the program and that the funds
on least could contribute to
the installation of another
two thousand plus megawatts
of customer cited storage over
the next several years that's
enough to make a considerable
down and the dot curve
as to help to grow the base
it incentivize customers to
install -- customer cited
storage and their other programs
incentivizing other load
modifying resources smart home
energy management automated
demand response but there are
significant barriers that stand
in the way of really allowing
D. E. ours to provide the full
value to the grid both for
reliability and for reducing
other utility infrastructure
needs counsel just released
a report on some of the key
barriers that we see that came
out at the end of January you
can find that easily on our
website at Kelso dot org C. A.
L. S. S. A. dot org I'll talk
about a couple of those report
five years from the report
one is that under
the cuts those demand response
programs the customer side
of resources are not allowed to
export beyond the customer meter
to the grid and count towards
a demand response event to
count their capacity this is
a significant handicap this
means that if you have storage
and the amount of stores that
you have on site at any point
exceeds your minimum load and
the chi so needs that energy and
needs that capacity you can't
get the full amount you have to
stop at the point where you're
the discharge your battery
only meets the onsite load this
is a a huge barrier that we
think just needlessly handicaps
the ability of distributed
resources to contribute to the
cut some marketing contribute to
reliability the others look
at mark arcane I won't I won't
dwell on it very much but it's
what is the relationship to
particularly customer cited
resources that the utilities
might need for local are a or
to avoid a distribution or
transmission about spent and
what's already in the forecast
because all of these needs are
driven by their forecast what
they expect to occur in the
next few years with respect
to load and unload shape and
in that forecast you have some
DVRs this is a a pretty tricky
problem because it any better
at to a solicitation have
to somehow differentiate the
capacity they're offering from
what's in the forecast but I
want to let you know that just
over the last couple of days --
Monday and Tuesday the PC had
some very productive workshops
on on this and other topics
related to the use of DVRs to
provide distribution value and
I think that there is a path
forward with the elimination
of those to be two barriers
I think -- you could see that
substantial more participation
of distributed energy resources
I'm contributing to reliability
and savings that's a good segue
because I want to talk about
savings -- Howard the ours
contributing to affordability
the industry has long argued
that investment and rooftop
solar -- will help save
customers money through
the avoidance of utility
infrastructure we just didn't
have much concrete evidence in
twenty sixteen the chi so in
its transition planning report
announced the cancellation of
a hundred ninety two million
dollars of transition projects
and the P. Ginny territory and
that the to do that largely
due to lower revised demand
for cast because of distributed
solar energy efficiency
and other resources so I
was one of the first really
concrete examples of savings
obtained by the pointy ours
that was exciting then in
twenty eighteen the Kaiser
released another transition
planning report which provided
even better news the cuts
announced it was rescinding
approval of projects worth
more than thirteen times the
savings from twenty sixteen two
point six billion dollars of
cancel transmission projects
-- this is to us game
changer it shows that the
harm that promise that we had
long held out of savings for
customers other than just those
who actually adopt rooftop solar
who dot storage themselves but
other customers can be realized
the same report also described a
project called the Oakland clean
energy initiative this the need
for this project was triggered
by the retirement of an aging --
power plant in the very heart of
Oakland your Jack London square
and this plant was essential
to maintaining reliability in
the area the cut so estimated
that the cost of building a
new transmission line because
nobody wanted a new gas fired
plant in the area Oakland --
as you can imagine strenuously
opposed was something on the
order of three hundred and
sixty million dollars just
for this one transmission
line but in that transition
report the guy so estimated
that a distributed resource
solution of resources in the
area would cost a fraction of
that probably at most somewhere
around a hundred million dollars
so another two hundred sixty
million dollars of savings by
using distributed resources to
avoid -- traditional
utility infrastructure my
understanding is that that --
the solicitations were issued --
mid year last year and contracts
or near finalization that's
what I've heard and it looks
like at the between P. Ginny
and East Bay community energy
this is another interesting
twist on this processes
that they collaborated and
coordinated their solicitations
because the utility need some
some of the the aspects of
the value those de ours is
a community energy needs are
a needs the actual energy
so they work together which
shows that cooperation between
these entities can occur and
then successfully procure
a resources to meet these
challenges so we think that
this is a really promising and
trailblazing -- project and
shows that what can a curve
when utilities and CCA's
collaborate and coordinate when
-- needs are identified with
and their utility territories
-- without all stop and
-- I'll be happy to answer
questions thank you thank
you I will turn out to Beth font
okay so I note that I left
the room for a moment and
you gentleman left me with
the squeaky chair thank you
so much not all by design
not called hand not cool
okay -- good afternoon chair
and members -- thank you so
much for the opportunity to
speak with you today -- high
-- as you mentioned I'm Beth
Fong the executive director of
the California community choice
association I am and Kelsey
CA and as a many speakers
before me have explains --
the CCA's are exploding on the
scene here there are nineteen
CCA's now in operation serving
customers about approximately
forty four thousand gigawatt
-- -- hours of annual load
-- it's about twenty five
percent of the total aye I
-- use territory in here in
kitchen is territory it said
about forty six percent so
-- there are growing we are
growing forest's -- and and
I I think is we charge ahead
on RD carbonization goals is
present picker pointed out
it's become increasingly clear
that the traditional vertically
integrated -- bundled utility
models not the future and for
millions of California's that
models already shifted to the
alternative which is community
choice aggregation cece's
represent local decision making
power procured by locals for
locals and with local needs
and preferences in mind I'm
in touch on three things today
one is -- the credit
worthiness and renewable
print procurement second is
reliability and I want to take
a moment to talk about this
-- developing a shared vision
of the future that kind of
following on from your comments
Scott about collaboration
so in terms of procurement arm
there's been some discussion
around whether CCA's have
the financial wherewithal to
build new renewable projects
on a scale that the investor
owned utilities wants to --
did or enter into contracts
for reliability needs so we
are the new players in an
uncertain market and I I get
that there's been this concern
I am I think that most people
know MC ET -- got a credit
rating investment grade credit
rating this year but what I
want to say is that -- an entity
doesn't have to have a credit
rating to be credit worthy
and this if you speak with the
large institutional lenders
have told us in an invite you
to invite them here to speak to
you that they regard CCA's in a
similar way to ms Eunice police
-- utilities and the reason
for that is because of the
single digit opt out on average
across the CCA's as well
as being transparent public
agencies they must publicly post
financial statements and
certainly I would say the large
number of bidders for anyone see
see solicitation speaks volumes
to how the market perceive CCS
so I want to talk a little bit
about the rate of change --
a year ago exactly a
year ago -- Kelsey CA
went to have a look at what
had been procured by the CCA's
in terms of new were noble
development and it the number
we came up with was eleven
hundred megawatts and that was a
total of five CCA's that had
all launched by the end of
twenty sixteen represented a
total of fifty four hundred
gigawatt hours was there any
allowed alright so then
present picker a referred to
-- some materials that we have
provided and hopefully those
been handed out I look at the
back there -- I think it was
no I got something else for you
here -- present picker referred
to a number of contracts that
CCA's hide -- --
published -- in November of
twenty eighteen so I have for
you the map of where
these -- locations are for
these -- different -- projects
and on the back through the
press release that came out
as well that will give you
that break down the stats but
on the back to the list of
all of the publicly of the --
contracts we're very transparent
public agencies there's fifty
nine contracts listed here on
the back fifty six of those
are for your or for greater
than ten years which going
to Mister Christians point
when we're looking at --
twenty twenty one others their
carmine SB three fifty that
sixty percent of -- analyses
portfolio have these long
term contracts so there is a
commitment here these are in
total represent eleven CCA's
because one of the CCA's in
here is -- procuring on behalf
of for such a joint procurement
down in southern California
so now where we now -- that
was November of twenty eighteen
right now there are several
CCA's -- -- I'm sorry there's
one other thing when I talk
about Choi procurement that I
want to highlight and it's in
the press release there but in
here we have -- also joint
CCA's of Monterey Bay community
power in Silicon Valley clean
energy -- together
jointly putting an R. F. P. out
and signing agreements totaling
almost two hundred eighty
megawatts of solar coupled with
three hundred forty megawatts
battery storage for two separate
projects incurring can counties
so what I what I'm trying
explains is a lot of sort
of experimentation going on
there in terms of this joint
procurement in terms of being
able to go out and procure those
large -- sums of megawatts
that present picker preferred to
so where are we now it's the
of February March of twenty
eighteen twenty nineteen and
-- I want to say that serve
that several species including
some that are recently launched
program so remember last year
in twenty eighteen we had ten
CCA's launch service and in
fact in February the clean
power alliance in San Jose clean
energy both -- launched their
third phase out to residential
customers we're we're talking
for CPA about a million
customers but I'm gonna pick on
clean power lines for a moment
so while they just wants to
a million residential customers
they have an RFP out there
seeking six hundred megawatts
of renewable energy and storage
clean power lines received
bids for two hundred thirty
four unique projects ranging
from small scale battery energy
storage to large large utility
scale solar wind and geothermal
with many bits including an
energy storage component they've
shortlisted these candidates
and we expect by the end of
spring early summer to have a
list of finalize projects East
Bay community energy similar
story is it put a solicitation
last June they're also looking
for six hundred to seven hundred
megawatts worth of new contracts
and they're negotiating fifteen
to twenty year agreements some
of the criteria is for local
projects some are not all of
them are in California again
there's Monterey Bay community
-- energy inquiry committee
power a redwood coast which
is up in Humboldt County clean
power as south this California
choice energy authority that's
procuring on behalf of for and
it will be ten by twenty twenty
one that they'll be current
on behalf of so basically
what I'm trying to say is
that they're out there they're
doing the procurement and
when I add up all the numbers
I'm gonna conservatively say
that by July we should be
able to report out to another
fifteen hundred megawatts of
new renewable developments
so the bottom line is is that
billions of dollars of financing
for major financial partners are
committed to build new projects
we've cataloged about thirteen
hundred of renewable energy
projects either built or being
built for CCA's with union labor
I know that that's another issue
that continued comes up we'll
be adding many more to this
list as project labor agreements
are put in place -- for some
of these new developments
I want to turn to reliability
-- one of the things I want
to make clear to you because I
think some it's not
clear to a lot of folks because
the governing board of the CCA
is it's elected officials in
the local community however we
are load serving and cities and
therefore must comply and have
all the same obligations as the
other load serving and cities
be the investor owned utilities
or energy service providers
that means that we have to
comply with the state's resource
adequacy and renewable portfolio
standard requirements also
have to it -- submit integrated
resource plans every two years
so I feel I just need to respond
to present pickers common about
the eleven waivers and and
he he is correct that there
is an issue out there with
waivers absolute agree but the
eleven where waivers which are
actually published on the C.
P. UC's on website -- one
is an I owe you and the other
ten are electrics -- yes peas
however he is correct that CCA's
in the last year have also --
fought for waivers that there
there there is a there is an
issue that has to be solved I'm
resource adequacy I just want
to point out is one component
of reliability so while the
commission set up are a policy
-- all there there's also
rules the callous so as you
heard from mark -- Mister
ruff later and also the CC
so I want to go to what is the
problem that we're actually
trying to solve we've heard
a lot about what might be
going on but it would really
help everyone to have a clear
assessment of the problem
there's no bottom up study of
how the disaggregated realty
retail market is actually
impacting the reliability market
here's what we agree on we agree
that the capacity market is
tightening we understand that
low serving entities are filing
waivers but it's not clear that
there isn't capacity available
for instance someone could
be holding on to our it as a
buffer against possible future
loads shifting or the floor
price could be unreasonable
so there's a number of solutions
and I think that I have to
compliment -- the si PC I think
by putting out a decision that
the majority of people didn't
agree with actually pushed
us to collaborate there are
others a lot of discussions
going on there are very
interesting ex parte meetings
with interesting bedfellows
-- but I think that everyone
there's of of of a sense of
urgency in a flurry in a frenzy
to to to really work together
to find a solution here so we
all agree that the forecasting
allocation process needs to
be fixed and all stakeholders
including energy division
staff of waited with lots of
good ideas we all agree that
a multi year are a obligation
is the right framework going
forward we propose putting
in place a utility near term
sales framework to facilitate
getting the are a products
in the utility portfolios
out into the market with
load moving to the C. C. A.'s
the excess supply from the
I owe you should also follow
Kelsey see has consistently
attic advocated for LSE's Max
myself procurement before any
central procurement however if
there is a local ari shortfall
then the CCA support the notion
of residual procurement by
central procurement and city
I think energy division stop in
the a truck three report that
came out this week proposed
a simple yet we think very
effective idea which is that
all the load serving and cities
need to communicate better
with each other at particularly
in terms of the process of
forecasting an allocation
but see sees are not sitting
idle why these issues are
being hostile in policy venues
instead were coming together
to identify new and innovative
ways of addressing the local
reliability issues so for
instance I know a year ago
-- Mister kirke were very
concerned about Metcalf for
instance what we're doing now
is experimenting with this
joint CCA procurement and the
reliability area collectively
we have five C. C. A.'s with an
aggregate load of nearly twenty
thousand gigawatt hours so
think about P. Jeannie when you
take out the -- G. efficiency
in the D. A.'s the CCA is there
-- the load is about thirty
eight thousand gigawatt hours
so that group of five continues
CCA's in the southern bay area
have come together they have an
are a photo out to contract for
joint are a portfolio services
this will enable them to procure
at scale multi year are a
said we're trying to respond
to the problems that have been
identified all right lastly
I just want to take a moment
to talk about it developing a
shared vision so the session
-- has been titled -- the
metamorphosis of the energy
sector so when I think about
I think of the caterpillar
transforming into the butterfly
I guess my question to all of
us is is what is our butterfly
what is it that we're trying to
change into and I think that we
really we were all really good
at identifying lots of problems
I think that we really need
to develop a shared vision of
the future so I'm gonna start
and I'm gonna be controversial
just so we can start having the
conversation with some press
stating publicly that wants
out of the power generation
and procurement business N. P.
Jeannie choosing to file chapter
eleven reorganization bankruptcy
well they elected to file
they didn't have all right
I think we should be talking
about in a in a not so distant
instance distant future with
the utilities focus on the safe
management other electric Sir
infrastructure and essentially
become a wires only business
this plant there is an idea
if that's the in in game then
we only to think about what is
the framework we need to put
in place that will ensure clean
reliable and affordable electric
generation service for all
customers that will also ensure
that we meet our aggressive
climate goals so I
have a few ideas also
controversial I'm fully empower
local agency providers to
advance California's chronicles
and by that I mean to assist
teaching is accent from the
retail service for example
and give local governments the
ability to expand their energy
electricity programs in a manner
that fits the needs of the local
community that could include
absorbing P. genies remaining
bundle customers the option to
service provider of last resort
option to service all retail
provider -- in I think
support the existing rights
of little local jurisdictions
to establish publicly owned
utilities by removing barriers
taxed expedite the process
well but that raises the
question about what of the
what about the parts of the
state where public power option
isn't readily available I
think we need to talk about
the establishment of statewide
public agency to serve final
customers until public option
is available we would also need
a plan to rebalance the I'll
use portfolios this is been
happening slowly with the sale
of I'll use a renewable and
ari products to realign supply
and demand to follow the party
low customers but there need to
be a structure divestment plan
and if you really think about
what reliability looks like in
a future without the fleet of
gas fired power plants then
it's got to be based on investor
owned utility distribution
system with a transparent open
access platform that facilitates
the deployment of distribution
energy resources the DVR's
that Scott spoke have and
other demand side management
strategies okay I know
that these ideas just add to the
controversy in the complexity
but I think that without a
clear vision of what we want to
transform into -- they were
just gonna spend our wheels
trying to solve problems issue
by issue and run the risk that
all the pieces won't add up to
a whole at the end of the day
so I look forward to working
collaboratively with legislators
and the stakeholders to develop
a shared vision of the future
and just all these complex
problems thank you
it's just money Jones I
see I drove but Sherman holding
out so you're now the chair
congradulations let me be that
-- in let me assure you for
from the get go that the
electrons that I represent are
of the highest moral caliber
-- today as a matter of fact
some of our more moral than
others but they're all very
moral and -- -- actually -- it's
been my experience that like
tries have are pretty a moral
which is why we're having this
conversation today -- so I'm
Janice but he Johnson with the
independent energy producers --
we are an institution it's been
around since nineteen eighty
to represent one of everybody
so solar wind geothermal
biomass and natural gas -- in
-- in various in storage as
well -- we operated a whole
cell function we think of
us as costs go where you can
get a lot of stuff cheap --
and or cheaper -- weird --
known for pushing technologies a
lot of the technologies that are
here today with us -- we have
and -- been in the forefront
-- but we also build awful
what we know -- and what has
worked and so I think a lot of
what the discussions are here
in the legislature -- as good
as we go forward should be about
predicated on that a colleague
of mine was talking to me this
morning about our our integrated
resource plan which is -- sort
of now become a thing of its
own -- is where we want to be
that's the vision of where we're
going to be in twenty thirty and
twenty fifty -- are a as with
-- you know what we need to be
-- and that's today reliability
now -- and it's pretty straight
forward -- you know -- resource
adequacy is -- having the --
-- the energy available -- when
you need it where you need it --
for adequate period of time --
and -- -- I just have to share
it underscore the point that
reliability is the key here
okay if we suddenly start having
reliability problems based on
decisions we've made because of
a moral generation for example
or anything else all bets are
off on our aspirational goals
-- I had the misfortune of value
the deal with them -- can get
president picker walking us down
memory lane of the San Diego
situation -- you know -- I live
to that and you don't you don't
want to go through that trust me
-- wholesale model -- has worked
well and are a terms of of
understanding -- what generally
needs to happen -- but at that
I think is you've heard as we've
talked a long a lot of this is
local very specific in terms of
of the locality we have sort of
-- -- research and it was the
in a broader range but a lot of
times this is driven by unique
-- local -- circumstances of the
geographic area -- I think
it's got indicated you have seen
this market shift occur over the
last -- so over years where
-- we have added a significant
amount of solar -- just to put
this in perspective in -- two
thousand eight we had three
hundred megawatts of utility
scale solar -- today we have
over eleven thousand megawatts
-- the Costa affordable takes
a utility scale in two thousand
eight was fifty to sixty cents a
kilowatt hour people are coming
online now -- sub five cents
and actually sub three cents my
job is to help build markets of
people make lose money I don't
know but that's their business
-- the -- peak a ship that
however -- because while that
is a success is got indicated
we moved at the peak from that
date to elsewhere -- the peak is
now shifted to up to forty nine
o'clock in this is what we're
the challenge becomes because
even in California we have a
fairly regular occurrence of
the sun no longer being with us
-- this brings up the role a
gas and I'm just going to say
you know I don't give it many
opportunities to say nice things
about gas because that's not
acceptable anymore -- but the
gas is -- the work course from
the standpoint of how we meet
-- -- resource adequacy today
-- and a and -- while the
role of gas has been --
-- dropping -- is the
annual energy mix for twenty
eighteen gas was about thirty
percent of the overall mix
-- in that the twenty fifteen
it was forty percent so it is
it so it has been impacted by
additional -- you primarily
so -- ended a resource however
and this is important as as
a part of peak resources it's
over fifty percent meeting that
the lights would not of state
on had they not been there at
those plans not been able to
ramp up and ramp down so it's
reliable it's affordable -- it's
there now -- and these are
modern plants I I spent a lot
of time having to argue about
the -- the the -- the resources
California has added are clean
resources we have renewables and
a modern gas plants are clean
they they are -- you know from
the standpoint of I think the I
SO study for on SB three fifty
-- in I think it was twenty
fifteen twenty fifteen data
that was forty percent of the
Daniel energy mix and was left
it was about one percent of
the criteria pollutants so
it is not a major -- -- eight
environmental impact on our
state and by the way they have
to buy offsets for everything
they produce including -- CO two
so -- it's part of the mix and
and and what I want levy with
on that is is that that's going
to be with this for a while so
rather than wasting time on how
quickly we can shut that down
if there are improvements we
can make it other technologies
great but that's going to be
with us for awhile storage has
been desperate is proving to be
very useful I was part of the
-- get a get a air resources
board -- technology advancement
-- committee -- ten years ago
we identified storage is game
changer that's proving to be
true -- and we are working it
into the system -- in places
where it makes sense -- the that
is very good at regulation is
very good at a number of things
-- it is still -- it
at the beginning stage from the
standpoint of -- how it is in
the market but we anticipate
that going forward civil my
members had built hybrid systems
as a matter of fact one of my
members was one of the first to
build those systems -- it down a
chili so -- the the there there
is a -- -- you know with that
this is becoming an increasing
amount of our resource mix --
there is a tension -- -- the
the -- it with respect to again
we represent wholesale storage
there is -- destructive energy
which I think Scott referred
to there's a there's a lot of
technical issues where there
is some tension with respect to
how how things get integrated
in the cal I SO wholesale
market what the rules apply and
we're we are sensitive about
that from the standpoint of
we operate our whole so rules
and if people want to join
our party that's great I would
necessarily recommended but
you're welcome to it but you
got to play by the same rules
-- and this gets Donald bunny
trail detail real quick but
the point is that there is a
tension there that would not
withstand effect that we support
a storage an obvious he's got
support storage there are live
issues that may or may not
pop up here -- -- that the at
the the other issue that I think
is important and I just want
to go through -- this fairly
quickly about what else -- is
in the system that we can be
looking towards -- assisting
on some of the resource
adequacy needs is geographic
scope -- which I think that
-- -- Mr Holden referred to
earlier -- we do have Nguyen
regimes throughout the west
that are -- -- that operate
at different times and said in
fact some of them during our
peeks here -- that we should
be avail in ourselves to and
we need to be very clear that
the I SO in the P. you see --
are -- adequately looking at
in properly planning for the
future need to add additional
interstate transmission to avail
ourselves -- to resources are
a across the west we are not
an island -- she'll thermal
obviously operates at night
-- we have great geothermal
resources in -- -- in the
state primarily in Mr Garcia's
district -- and -- and and
in the end those in northern
California to -- -- in --
in in the -- Lake County in
cinema area -- we've got a by a
mass technologies where it which
are an integral part of our
-- California's route -- rural
and agriculture communities
we're going to continue to grow
food -- in California that's
a place we should you know
look and did simple fact of
the matter is we are gonna see
solar continue to grow it is
a very low cost resource and
the the the issue for re -- for
developers of solar is how to
keep that going because at some
point in time you run into --
if the at the vet the eight the
economic value of the energy
your supply in mid day is zero
you're not going to get up in
volume so the question is where
you know where we're going to
put those resources and I think
we've got a lot of things we
can be doing with access seller
in the middle of the day when
that is an issue with respect
with which respect to -- water
press process seen a which is
-- is heavily dependent upon
electricity prices hydrogen
production manufacturing that
sort of thing so that so
that's kind of where things
set it right now in terms of
challenges exist in are a --
we've just finished one cycle
we are slowly moving towards
something that may make sense
of -- -- did it finally adopted
a multi year are a before it
was only an annual -- -- --
resource adequacy proposal
meeting that day they only had a
super -- -- look one year out
the reason that's a problem is
that if you need to make it --
economic investments in your
equipment if you're gas plant
for example you need to make --
some maintenance upgrades not
be doing that you're going to be
needed sec and I would argue the
same is true for demand response
or storage -- doing that on an
annual basis is very difficult
to do in any sort of affordable
way so the longer it's art
lovers out the lower the prices
and I think the better off it
is they -- we supported the
energy -- divisions -- argument
for a five year that didn't
happen we really wanted to see
a three year eighty percent
that didn't occur either --
but we will remain -- you know
active in the -- that in the
discussion there -- there was
discussion earlier on central
buyer and I know there's a
there's a proposal least one
bill at a pop up here at some
point in time -- you know
we're talking about that we're
we're trying to figure out
how that actually would work
of who who does that -- --
I'd not sure that -- ms lines
the invitation have a state
a procurer for most of the
state makes a lot of sense in
terms of a provider last resort
that seems to me to be racing
backwards -- pretty quickly but
will look at it we just want to
make sure the metamorphosis is
swallows and -- -- -- beautiful
-- -- it as well -- tales
and not -- you crappie moths so
-- the that's the -- the other
option there so -- it but I do
want to say that I that I think
that -- one of the things that
-- -- Beth also indicated with
this aggregation of CCA's --
vats helpful -- because part
of the problem is my people
sold anybody -- because we're
selling -- a moral electron so
-- but it the -- the ability
-- the the the the closer people
are -- it the larger the volume
and geographic where you to
where they need to go is very
important because you know it
it's one thing that have to
do you know thirteen or twenty
deals with the off the five
megawatts at a time you know
at being able to respond to
something that's two hundred
megawatts -- you still have
to do all the paperwork to do
all that but it's a lot easier
to do -- so I'm gonna kind
of wrap up here but I do think
it's important -- in again --
president picker took turned
us -- that down -- it --
you know you did that the the
restart so recent pass a guess
it is -- what happened in San
Diego in two thousand one and
I'm not raising that because
I think the same fax pop up or
anything else it was a different
time there were different issues
but just understand that there
are a lot of really good people
trying to do the right thing and
believing they were doing right
circles no one anticipated that
happening and the people engaged
in responding to economic
rational signals the market went
south on them they were dead
that they did not have adequate
resources to acquire resources
and also market and they just
kicked the customers back and
we played clean up for many many
years after that so I I what
I'm suggesting here is is that
the time being spent on what
would plan B. is -- in being
somewhat cautious in terms of
how it will be in the future --
is appropriate because I I I I'm
not you just anybody it's in the
market right now is trying to do
anything on toward but there are
a incident forcing circumstances
and how all these different
pieces -- interact with
judge are going forward -- --
could be different than what we
anticipate -- and so just
two other points you know
in the future as we had more
soul this system are re at the
reliability today is predicated
upon a really hot day it's hot
in the northwest it's hot in
Phoenix and we have to figure
out you know how well how we're
going to meet -- I meet a load
that's gonna shift as we add
more solar to that's the best
of a problem with the problem's
going to be is is winter days
when we don't have a lot of sun
-- when we may not have a lot of
wind and in what we do that so
that that's all shifting and it
and that's not anything that's
immediate that we need to panic
about but we need to be mindful
of it -- so as we go forward the
main issue that I think we need
to talk more about and again
I'm going to repeat this what
California's doing is basically
adding clean energy so I don't
think that's even a dispute
anymore the real question is
reliability and affordability
so we be we ought to be at a no
stings that enhance reliability
that that don't break the bank
-- and -- basically lower
costs for everybody not just
people putting stuff on their
roads or something stuff in the
garage -- so the hotel sector
that Iraq I PP sector that
represent -- will work to make
that attainable and -- we look
forward to future interaction
with this committee as the --
session moves forward thank you
thank you all turn to
members if they have any
questions or thank quirk
-- first of all --
Mister Smarty Jones you hit the
nail on the head the question
is reliability and affordability
-- and -- I'm not quite ready
to get ready to utilities yet
and I will say P. Jeannie was
forced by the fact that they
could no longer -- borrow
money they could no longer get
cash that wasn't really a choice
they wanted to make they in
fact had tried to get funding
in the P. use in October in the
P. you see didn't approve it --
and had the P. you see frankly
and I know Mr picker will
disagree with me but had they
done something similar to what
was done on the San Bruno case
-- I think we could have avoided
that however those weren't
happening and maybe Mister
pickers right and they couldn't
have but I don't believe
that but okay anyway getting
back to your situation so
reliability and cost and
you know a small and a D.
like Solano county is not
likely to be able to balance
everything without having so
much storage that it becomes
very expensive much like why am
so we are better off as you said
when people can get together but
-- no there is a process
where the I SO looks it
how they're gonna balance
load and then the C. P. U.
C. looks at it how would
you -- in vision
the coordination of the with the
in here I mean you're between
the I SO in the P. you see we
have an idea of what needs to
be done how do you envision
that being translated to the
C. C. A.'s working together
so are you talking specifically
about the resource adequacy
process of forecasting
allocation that goes on
between the cow eyes so
the energy commission
the CPC yes but also cost
because arm I know you have
felt because once you're
looking at getting higher
levels then you're going to
have to have --
storage and the cheapest way
to do that right now is pump
storage other maintain other
means maybe batteries will
get cheaper at cetera but
the combination of keeping
prices down and meeting
their climate goals and having
adequate resources is a very
complex one and no one of
the CCA's is a real can be
able to balance all of that so
how do you envision the best
way is to take the information
from those two agencies
get it down into the CCA's then
who is going to ask this you
know who's gonna tell CCA axe
they have to work with C. C. a
B. and C. C. A. C. and D.
but you know a doesn't want
to get involved I mean it it
becomes quite complex so I'm
sure you've thought about this
how do you well how would you
solve this we say to the look
at me go Kelsey CA you can do
it -- so that's you know part
of our role is this coordination
of the CCA's on every level
night it's sort of exhausting
but but it it's exciting --
so we have an active board
of the operational members
-- and we have board committees
we have staff committees
very active staff committees
right down to procurement
committees that are --
while observing all anti trust
rules -- are exchanging
information templates Senate
offer contract you know ways
to move forward says a lot
of collaboration and you see
it even in Filene's at --
at the PC they're not all done
by Kelsey said they'll be joint
CC is the common interests will
get together -- go to the A. R.
B. the folks that are working
on an electric vehicle programs
and want to have a say there so
so I guess I have to say that
there is a big coordination
state wide there is also
entities like down in southern
California the California choice
energy authority who is doing
work on behalf of -- a whole
lot of the smaller cities and
that's the group I was talking
about the table to do the
procurement at at scale --
to handle some of the data
management -- services that are
required so -- I think that
it's evolving I don't see anyone
CCA my experience is they don't
want to head off on their own
they show up at our door asking
for help and information and
one of the things that I believe
and I have -- just really have
have the capacity but but I
think what you know this is
something that we couldn't work
with the other load serving
entities on like the I. O. use
in terms of helping to educate
and bring these folks on board
I mean I think it is going
to be these joint CCA's doing
more activities but also the
example Scott gave the Oakland
energy initiative where the I.
O. U.'s and the CCA partners
together to to address some
of these these tough issues
I just feel that work at
this is all great no problem
but I don't have look
we lost the governor because
of rolling blackouts and I just
don't want to see that happen
again and I just don't see you
haven't given me a mechanism
that is a fail safe and
I think we need some sort of a
fail safe mechanism are
given the independence of each
of the CCA's M. I'll just
let leave that as an a homework
problem for you okay thank you
structure thank you I want
to pay you back a little bit
on Mister quirk and I'll do
that a second a first of all
a Mister Smarty Jones I I I
I do think though that are
a moral electrons can be
rehabilitated that I want to
ask a couple questions to about
that my concern is that
if we rushed so fast to get
out of natural gas we really
lose -- ability for reliability
and I I I think we were all
very concerned about that
however there has been some
conversation about --
perhaps renewable natural
gas what what ask what that
looks like there's been some
talk about hydrogen injected
natural gas there's been some
talk about that and there's been
some talk apparently that these
can fuel existing for fossil
fuel plants what is
that is that realistic is
there a possibility in it and
all of this and could perhaps
this be some kind of a fail safe
methodology here aye aye I
concur with Mister quirk
I was mayor Fresno in twenty
and at a night in what nineteen
the ninety nine two thousand
two thousand one I live through
those those blackouts and and
brown outs and I don't ever
want to live through that again
and so I'm trying to figure
is there a in term
more rational more fail
safe approach to moving
toward this a hundred
percent but in the end
term we do have some steps
that give us increased
levels of reliability
and a fail safe that we
may be able to trust I I'm
not making no conclusions on
asking a question about does
possibilities right now I'm
that was respect reliability
and affordability let let me
respond with that based --
on what I do what I generally
now because that there there's
some specifics that questions
there that would take a little
love for the research for me to
answer completely -- renewable
natural gas has been used in
the system before -- mega and
as so that's that's something
that it did could happen -- we
do -- yeah I believe import a
fair amount of renewable gas
that it was my understanding was
ending up in -- in the system
as well -- we use actually
take methane read off the
landfills and operate them in --
research reciprocating engines
-- to produce power but we ran
into knocks problems there --
the other thing that the two
other issues -- renewable
natural gas my understanding
is is that it tends to be
significantly more expensive
than an actual gas we currently
will currently use for that
so there is a a potential cost
factor there and the second
one is it may have a higher
or better use in other sectors
of the economy that have less
-- -- you know -- ability to
it at to adjust -- you know
agriculture for it for example
in terms of food processing
there may be areas where it
could be better utilized their
at least I've heard that that
discussion going on so I don't
think it's a I don't think the
answer is no -- but it's it's
I think it's more complicated
nuanced and and maybe having
additional cut -- readable
natural gas in the system will
help alleviate some of a help
reform the the a moral law --
select runs that the people
are concerned with I doubt
it but maybe it would help
-- ameliorate side a problem
that -- missed questioning the
thoughts about this as well
yes No thanks for the question
so it is it is possible
to question is to to what
extent so -- a lot of
modern day power plants have
very specific -- operating
requirements and so of the
renewal natural gas -- something
you know I know a bit more about
than that and I did it he's gas
-- have different he contents
and moisture content so when you
planned the there were no other
no well that's what gas and with
the with the the record natural
gas you still have to get but
will call a pipeline quality
there certain specifications
that the by points out to
maintain and if you don't
you're going to avoid the
manufacturer's warranties on
those power plants so -- it is
possible it's just it's just
a question of how much can you
put into the system before you
start to impact certain kinds
equipment that are that are
-- more finely tuned -- then
dent so your backyard barbecue
okay -- just when it is cực
this is a question out
there answered if you
wish you don't have to --
my concern is that
I feel like we're getting the
aspirational element ahead of
the real reliability and the
affordability and if in fact as
has been repeated here that the
reliability and affordability
has to be the lead here or we
have customers and voters who
are going to be very concerned
about this do we have
a and I asked this of
anybody on the panels eight
eight are we satisfied that
there is a process here
that elevates reliability
and affordability above the
aspiration of the butterfly
because if we don't I fear
that we end up with the
aspiration driving the
entire decision making
and then reliability and
affordability begin to suffer
yelp I'll take that your first
it I think in in elements
we do take into account
-- reliability affordability
but it it's not being done in
a systematic comprehensive way
of my my biggest concern for
California right now is we don't
have a clear vision for how
we're going to get from today
to tomorrow of kind of following
up on on this once in a comment
of veto it may be an outside
of some folks but really it it
would be appropriate to keep the
gas fired power plants around
for an extended period time the
goal should be to reduce the
amount of natural gas we burn
them by ideally let's try not
to burn any gas in those power
plants and once we can assure
ourselves that the system can
operate without the natural gas
fired power plants then we can
retire them -- but we should
be opposed to just having them
there there like a backyard you
know a generator -- for people
that have -- a critical needs
so that that should be the the
focal point in in doing it then
we can allow the technology
curve to evolve over time so the
race to get all the clean stuff
on very quickly -- communicate
very big bet on today's
technologies and there may
be some breakthroughs to come
along that will afford you know
allow us to leverage much more
affordable ways of generating
electricity so it should just
be very measured approach to
-- -- to reducing carbon in
our an electric sector of in
and remember electric sector
is is just less than twenty
percent of the total carbon
emissions in California we we we
want to use -- electricity to
electrify transportation and
and buildings which is more than
half the the carbon emissions so
if we if we rates to try to get
all the carbon out electricity
and raise the price maybe make
it less reliable we are going
or seriously jeopardize our
ability get people wanna buy
electric cars and and electrify
their their their property so
-- just needs to be done very
thoughtfully and -- in in
unfortunately because it's such
a such a involve complicated
situation -- in our regulatory
and let's say process he's like
to look at things in silos it's
really difficult to cut across
all the different -- -- --
dimensions that are in play here
I think up don't speak for
the chair but we've had some
conversations about this
that one of the things we
hope for at it is that and
then I don't think that we've
had this in the six years
that I've been here and on
this committee which is a
long serious look at the kinds
of policies necessary to get
where we want to in a in a
in a careful and coordinated
way moving forward it is the
haphazard approach and the
wishful thinking approach that
concerns me -- and I
I hope we could see this open
door as a as an opportunity to
really have serious discussions
about how do we get to where we
want to be and not be in
such a rush to get there
that we are willing to have
a step by step fought full
process that -- gets us to
where we want to get to but
does not as I think Mr quirk
suggest risk the
the trustworthiness of the
people California and what
we're about thank you Mister
thank you script
thank you Mister chairman thank
you panelists I'm I'm actually
very excited about what the
future of California looks like
-- I'm new to this committee
but I'm have a lot of questions
-- and I apologize that I had
to miss a portion of it as
I was at another and another
committee as we lead towards --
a row to de carbonization and
renewable energy at one hundred
percent I want to echo Mister
Patterson thoughts on how we
get there but I'm looking at
it through a very different
perspective as well not only
on the consumer points but also
on the labor front and so I'd
be curious and I don't know if
we've had these conversations
in the past or what information
is available when it comes to
certain types of energy and
what that what the future work
force of California looks like
I represent a district that is
twenty percent below the
national poverty line in Los
Angeles in the main urban area
and I want to put people to
work but I'm not quite sure
what that work is or what those
apprenticeship programs look
like or what the partners are
in if we are going to create a
a pathway to one hundred percent
did I mention there's also an
opportunity to create really
incredible jobs for people and
so how do we get there I think
there's a those are two items
that are not mutually exclusive
and so you can have one without
the other and so if there's any
ideas at the table from from
the industry or from partners
and stakeholders that we can
talk about not only how do we
get the policy to get us to
one hundred percent renewable
but what is the work that
needs to happen with actual
people to make sure that that
happens insult thoughts or
opinions whether now or later
are very welcome thank you
I'll just grab that for the
moment I I think you're raising
a agreed issue and one thing
I would say about communities
-- that have moved towards
community choice aggregation
a for many of them it was a
way to implement their climate
action plans but it's also about
jobs in the community and so I
think that's what we're seeing
in terms of particularly and
I can provide you with a lot
of examples of follow up with
you but some of the examples --
from CCA's that have been up and
running for awhile and have some
of these programs and it goes to
I think appoint Mister Christian
made about the electrification a
lot of them have this real goal
of impacting electrification
of transportation and buildings
and there there are jobs in
here and there there are jobs
in terms of -- some of the local
renewable programs but they
may come and go right and what
you're looking for is something
that -- is is this for it so
-- yeah I would love to talk
about this more later but I
think of in particular like
San Jose clean energy and the
reasons why they've made this
move -- the meristem a cart
is been very outspoken on this
because he is such a diverse
-- -- based and and want to
to make sure that -- jobs
are part of of what they're
bringing to the community so
and just very quickly --
assembly woman are Darcy -- out
all arranged to have somebody
reach us give me I'm sorry
thank you god but my
apology this group -- the
will -- get somebody
to ask can I connect with you
talk about the job programs
at southern California Edison
house a lot of jobs
there are ultimately are in
the stem fields right it's
about developing -- yet
it's the engineering and and
that then the field the the
field engineering work that
goes on -- destined gives
a number of twenty thousand
dollars scholarship to your to
underserved communities -- in
the stem field and one make sure
that you're aware of that and
and have your -- your students
applying for those scholarships
but there's also a lot of craft
-- labor that the company --
employees and then off to the
construction of these projects
leads to jobs but not the
construction is sort of a one
time a job and then and then
it moves on so -- definitely
think there's opportunities
for the communities and -- and
all all of the stakeholders
to partner in this regard
I'll just make a couple of a
couple of points -- so one I
think the programs developed by
the public utilities commission
under the California solar
initiative and then -- and
then the extension the solar
and multiple multi family
affordable homes have some
elements of job training I mean
it's well it's the relatively
small programs in the grand
scheme of things but it's a good
model for -- using those
programs to try to leverage
some workforce development
and make sure that their
opportunities in those areas for
jobs in urban areas me a lot
of -- and and I'm not anyway
dismissing the the need and
the long run for large scale
renewables but a lot
of that development is fairly
remote and to employ people
in dense urban areas like San
Diego or center there LA
you are necessarily looking at
development more distributed
resources and energy efficiency
-- so potentially a lot of
jobs the latest to solar jobs
report I believe -- had a
number around seventy thousand
-- and -- jobs in California
in the solar industry broadly
-- one thing that would help
and the Los Angeles area in
particular we have we at council
have begun to to work more
intensively with LA W. P. which
hasn't a Taurus the difficult
interconnection process that
makes sewer development storage
development and LA for difficult
and it's -- we think really
holding back the market so
it's removing those kinds of
barriers and then preparing
for increases in DVRs -- within
those are in areas making sure
the work forces there we --
would love to cooperate with you
and and folks in LA and mayor
Garcetti's recent now spent
that he wants to eliminate the
reliance on three gas fired
power plants there is a large
local reliability value that
those plans provide and -- that
will necessitate of a
very comprehensive and thorough
look at what the ours can do
to replace that and provide
equivalent reliability service
there's it will necessitate much
more development in the LA area
I thank you for for that --
as periodic comet
in a world transition your
comment into public common we
appreciate those who were some
a member Carillo have good news
and bad news now I have before I
take your pick idea before I
came to the P. you see I spent
a number of years working on
citing permitting and helping
to interconnect very large
renewable energy projects
in this is Mister Marcia was
saying a lot of those were
remote but the filled a need
at a time that the housing
industry was in collapse in the
commercial building industry
was in collapsed because of
a lot of construction workers
because a lot of this work is
actually construction do travel
they follow they follow the
construction trends so at one
point weeks week we've we've
we counted about thirty five
thousand people working on
various -- desert and Central
Valley renewable energy projects
that was pretty important for
particularly those people who
are in the organized trades it
was impossible to find anybody
any any union hiring hall any
place in the Inland Empire for
a large period of time because
they are all out working and
that created a lot of family
wealth but what it didn't really
result in what was a lot of
long term prosperity and long
term jobs in that particular
sector what we've seen in the
solar industry is that a lot
of the work was actually an
origination in the soft parts
of the job so I meant going
door to door finding customers
with the most recent statistics
is in California is the jobs
in the solar industry of
chop dropped by fifty percent
because they're sort of a a
a a attenuation in the market
place so I'm I'm why
worry that we rely too much on
energy policy is jobs policy
if you're if there are jobs
that are going to be long term
and persistent is going to
be where you have a very firm
infrastructure that needs a lot
of servicing so I keep pointing
people towards union blind work
and said that is probably why
there's going to be the most
jobs with quality longevity
they both creek -- family wealth
and because the polls don't
move around unlike construction
they'll probably be more
community prosperity building
as a result of it and I think we
have to be very thoughtful about
these things and really analyze
what are the jobs we want in
the future what's the nature
of our energy construction I
just don't think that energy
policy is automatically a
good jobs and an income policy
thank you for that we'll
turn to public comment we
appreciate the panel for their
participation there inside
okay
good afternoon -- my name's
Melissa brown on behalf of East
Bay community energy which is
a C. CA serving Alameda county
and eleven of its cities -- to
address -- is Carillo questions
about jobs they did want to
point out that one of A. B. C.'s
core goals is to invest in local
development and we in fact have
a local development business
plan that was developed with
our board and stakeholders over
the course of more than a year
-- to outline how we plan to do
that be happy to share copy with
you if you're interested okay
that we also have prevailing
wage language and our long
term renewables contracts and
we expect that our investments
will result in project labor
agreements so there are multiple
ways that we expect that our
activities will result in job
creation and sustaining jobs
as well in their local area --
I also wanted to address the
concerns and questions raised
by Mister Patterson and Mr
quirk regarding reliability
and affordability -- from an
affordability perspective I
would just say our local board
is committed to low rates in
this puts a lot of pressure on
our procurement team to make
sure they're entering into
affordable transactions markets
can work to coordinate low
cost procurement that maximizes
value if the rules are set up
correctly and -- we get signals
from the market that enable
us to ascertain and value our
resources and decide what we're
going to invest in -- that can
fall apart when the regulatory
rules are unpredictable or
poorly designed and so that's
part of what we're trying to
work through with the si PC to
make sure that the rules are
adopted to today's landscape
in a way that set us up to
be able to maximize the value
of the system at least cost
-- and just wanted to point
out that they're kind of two
competing proposals at the PC
regarding how to and -- ensure
reliability as Matt one is a
residual central procurement
-- system and another one is a
full procurement system under
residual procurement system you
give LSE's the right incentives
to maintain some of the clean
investments that they're trying
to make such as energy storage
while still having a backstop
to ensure that the lights don't
go out so -- direct response
to Mr quirk as that's how you
make sure the lights don't go
out a full procurement system
may accomplish the same goal
of the lights not going out
but may do so in a way that
really inhibit our ability to
invest in the right clean --
source as self maybe with that
thought thank you very much
is chairman Toni Braun about
half the California misplayed
Khiladi says he Asian the state
wide association public power
in California -- reliability
is the paramount -- goal of
public power entities that is
reflected in our long history
of ownership of generation
and as long and are reversed
-- practices for long term
contracting with generation make
sure that we keep the lights
on for our customer owners in
our in our community citizens
I think it's important as we
consider all this issues in
the immense complexity of it
to recognize that we're not
writing on a blank slate here
the legislature is already
legislated -- at the to lease
code requires that load serving
entities not only maintain
adequate supplies to meet load
but also for -- forward planning
obligations it out in the I. R.
P. provisions in the utilities
code all the load serving
entities and that's most of the
larger PPO use as well as the
CPUC jurisdictional entities
have to file I are peas and in
the entire P. demonstrations
of how they're meeting their
load serving obligations and
planning for reserves must
be part of those documents so
fortunately we're not making
this up out of whole cloth
we've already thought a little
bit about these issues and I
would think building on what
we've already put in the in
place in the statute and on
the ground it would seem to
get prudent -- place to start
so we have PO use over twenty
that are in the I SO and
they set their own planning
reserve margins as dictated
with in the context of the
state requirements but
that's only part of the story
there each year they get local
capacity obligations that
are allocated to them by the
I SO and they get flexible
capacity obligation so we've
heard a lot about local
capacity obligations and the
thorny Nessa's associate with
procurement local capacity this
is been going on for a decade
many of the P. a user smaller
much smaller than the CCA's
they have been able to meet
the local capacity obligations
that the I SO directs and the
flexible capacity obligations
that the I SO directs --
the if they don't the I SO
goes out and has backstopped
procurement so where is the
safety net we've heard that
with respect to the PO using
the I SO if they do not meet
their obligations which are
defined by the ISO the I SO will
go out and if there's a
shortfall -- do the procurement
and allocate those entities
the cost so again we're not on
a blank slate here we have a
-- we have a system in place
the P. you use that are not
in the eyes so they're subject
to the same obligations to
meet load and resources in
a real time basis as Mister
ruff leader described so
if they don't do that they
violate various standards
ants are subject to incredibly
rigorous financial penalties
are forced through the federal
energy regulatory commission
ultimately so they have a
great incentive in you and you
see that reflected in their
in their planning practices
so what we have put
in place as Mister Smarty Jones
indicated has worked pretty well
is it a little frayed around the
edges because of the challenges
that we've talked about today
there's no doubt about that --
fortunately we're not starting
from a system where we had three
loads serving entities and now
we're gonna have over fifty the
I SO indicated in a filing it
made it for earlier this year
late last year that there are
forty load serving entities that
currently deals with in its own
resource adequacy regime right
now so we're starting from a
much higher number than three
and but we're going to greater
to segregation and we also
have the behind your challenges
and things like that so we
absolutely need think fought
fully about what we're putting
in place going forward --
but I would urge the committee
as we look at these things not
to throw the baby out with the
bath water I think there are
some targeted things that we
know we need to solve the
particularly the low hanging
fruit associated with that it's
fairly discrete number of local
resources that we know are
needed to keep the lights on --
and probably need a a forward
looking revenue stream to make
sure that they're staying around
-- there's a lot that we can do
-- the cheapest flexible
resource is not the multi
billion dollar project we might
build in the future it's the
gas plants that are in the
ground right now and we need to
make sure that we as we move to
the D. carbonization and a low
carbon future or the zero carbon
future that we make sure that we
maintain that safety net --
to ensure that we keep the a
grade a stable and secure
as we meet our energy policy
goals so we know it's gonna
be a long conversation we
look forward to working
with the committee thank you
thank you for your comments
good afternoon Mister
chairman and member yes
over there in with their others
watching there are welcome
-- that Lee is over there with
cal chamber -- reliability
and affordability are some
of the primary concerns of
our fourteen thousand member
businesses that we do really
appreciate you holding this
hearing before we start
considering all these bills this
year -- we do remain concerned
regarding legislation that
seeks to improve it to impose
mandates to procure one energy
technology over another spend
millions of dollars on climate
programs that may or may not be
effective at reducing emissions
are banned certain technology
customers members are big and
small we have tech companies we
have manufacturing we of small
family owned businesses and
employ hundreds of thousands
of Californians these companies
continue just pay some of the
highest rates in the nation
-- and moving towards as as
we move towards full reliance
on renewables -- as they're
currently defined by the law
does relate risk the reliability
of our electric grid and we
need to be cautious and how
we get there so in one of the
potential costs associated with
all the myriad other issues that
we're dealing with an energy
world right now including wild
fires and climb an adaptation
of resilience we encourage and
appreciate the thoughtfulness
and prudence with which is
committee will consider energy
bills going forward and we
look forward to working with
you this year thanks thank you
Mister chairman and a assembly
member Correa thank you for
staying and for those that
are still watching -- I know
we all want to get out of
here and it was and I wasn't
planning on speaking and tell
you raise the jobs issue --
ag Calpine owns and operates
seven hundred and twenty
five megawatts of geothermal
facilities and like in cinema
county those facilities
employed full time three
hundred people plus a hundred
plus contractors daily those
are hourly work force makes a
hundred thousand plus benefits
and bonuses except track those
are jobs that do not require a
college education unfortunately
AB are seven hundred and
twenty five megawatts of Jeff
thermal we're not sure how
those resources are going to
continue to operate because
they're not being port procured
they are cost effective every
model has shown that there cost
effective they're important
to median R. G. H. G. goals
and also our reliability goals
they're available about ninety
eight point five I'm wrong
on that but about ninety nine
percent of the time so we have
run legislation the last couple
of years with that assembly
member Aggie where curry Mr
Garcia -- because we think your
thermals a really important
part of the resource mix going
forward -- both existing and
in New and Mr Garcia would
like to have that those same
jobs and economic opportunities
in his district but number of
the people that have testified
before you today have opposed
that -- those bills and so
I just want to again say
this is still an issue and
something that we need to
grapple with as we're looking
at an art towards our future
and how we're going to achieve
reliability in an affordable
way that accomplishes our GHG
goals and as an added benefit
creates job but not necessarily
the single driver I hear
you on that but it is a huge
benefit so thank you thank you
born column policy advocate
was Sierra Club California
thank you for the opportunity
to comment today when most
people think about climate
pollution they think about power
plants in industry however a
quarter of California's GHG
emissions are from homes and
buildings the majority of which
come from onsite combustion
of gas for you for heating
buildings are still a major
gap in California's climate
strategy Andy carbonization
conversations roughly ninety
percent of California's thirteen
million homes and buildings
rely on gas for water heating
and space heating these gas
appliances consume more gas than
all the state's power plants
creating a major source of
unregulated climate pollution
plus gas appliances worse an
indoor and outdoor air quality
and the distribution of gas
to buildings is found to be
increasingly vulnerable to
leaks and explosions California
must prioritize efforts to
electrify homes and buildings
to achieve climate safety
and affordable housing goals
and stop were seen our depend
are gas dependency leaders of
state agencies have a knowledge
the need to electrify gas and
uses empower them with clean
and electricity Californians
support this change just as
they want clean energy on the
grid they also want clean and
safe energy in their homes now
we just need the policy changes
to make this a reality for
Californians thank you thank you
good afternoon committee
members my name is Joseph with
men I'm with plants look clean
energy we are the CCA serving
San Matteo county I just wanna
one reiterate the points that
-- that spokesperson from EBC
made -- and then also point out
what we need to get through this
is collaboration with our state
agencies not the sort of fights
that we've been seeing and we're
trying hard to do that with the
state agencies I took a lot of
heart in the February decision
from the P. you see about the
studies they're going to release
I hope they come out sooner
rather than later the end of the
year probably is too late for
those studies considering the
P. you see is that it wants to
look at central buyer in October
the study is that they're doing
will inform that decision so
having the studies after the
decision doesn't make much sense
to me and I think that gets into
the need to really take a hard
look at the state agencies that
are managing the are a system
they need to self reflect on how
that needs to change to keep
up with the market changes that
are coming P. C. E. has had
requirements come down from
the state agencies that were
around yes when we tried to
correct those just eight through
discussions with the state
agencies it was very difficult
to get accurate numbers about
the are a we were supposed to
per care because they were using
out of date information and so
you know there's a there's a two
way street here that I think we
need to talk about and I think
again took to Mister quirks
point a residual buyer can
do what's being asked to be done
we put forward a very detailed
proposal on that and I think
we'll continue to have that
conversation but I just urge
this committee to think very
carefully when it's asked him to
pass legislation on those issues
that it also thinks very hard
about sort of what's broken in
the current system and does that
new idea really fix it rate
so I just want to echo that and
then also to assembly member
Carrillo PC E. has a sustainable
workforce policy that our
understanding is it's one of
the strongest ones available
we have done over three hundred
megawatts of solar power plant
development in the state that's
led to direct union jobs and
I would be happy to share that
with you and share our vision
of how we develop a sustainable
work force across the state were
sprinkling our plants around
the state so that those benefits
spread out they don't just stay
in one area so hopefully we can
have a chat about that and I
can talk to about that thank you
thank you and and in a let me
think everyone who came out
to us here they're inside in
their comments we appreciate
the panelists because they
certainly brought us some focus
to our conversation and it was
really important that we have
this -- this hearing as I
said at the beginning of before
we got into the bill's making
their way to this committee
so that we can hear from all
of you in a way that helps and
former thinking and gives a some
clarity in terms of some of the
ways that we can move forward
in a -- an appropriate way
and one that's going to build
on our system so that it is
reliable so that is affordable
and that we are moving smartly
to our region are or carbon
reduction goals of you know
the the it says look at said all
the time the eyes of the world
are watching California and
and certainly that's heightened
now because of the instability
in our -- investor owned
utilities -- but we will get
through that and we will create
we will see ourselves on the
other side but the question now
is what is that look like what
they see a growth of CCA's and
wanting to see that there's a
ability to foster opportunities
for our the -- distributed
energy resource community and
developers there's still has
to be a balance that has to
take place here and we want
to find ourselves in a place
where are we're not back in
the late nineteen nineties and
two thousands where a resource
adequacy becomes the issue again
that will as Mr Paterson point
now create a lot of anxiety and
fear amongst everyone so we want
to make sure we're putting forth
good policies and we're putting
forth policies that make sense
of their pieces of the puzzle
we acknowledge all the time
especially with this committee
there are a lot of pieces to
the puzzle that are on the table
sometimes you feel they're just
scattered all over the table
you're trying to force one piece
and just because it looks like
it should fit the right color
you remember those puzzles are
your kids a ten thousand pieces
and you're trying to make him
all come together and yet do
you have to be smart about
how you wind it up because
just because it looks like
it's supposed to work doesn't
necessarily mean it's meant to
work so we're going to do our
our very best to to navigate
through of the issues that are
in front of us I think this
state is done great work -- to
lay out a clear vision of how
we can move forward -- but we
do have some central questions
about the future of natural
gas is an example and how of
that is going to work for it
and there are those who think
we need to tomorrow be often
there others it's a well that's
going to take awhile in this
transition -- or should hell
was have a reserve and there
are questions about the come to
mind around of the city of Los
Angeles -- -- looking to close
down a couple of gas plants in
in that community and how of the
communities going to properly --
their of their needs are gonna
be met without rates going up
so it's a balancing act --
but we were looking forward to
working with all of you you're
all familiar faces to this
committee and so will -- look
forward to hearing your thoughts
as we move forward but I'm glad
you're able to join us today I
think it was a very informative
conversation and we look forward
to you joining us once we --
start the role of real me a
real bills to process so thank
you very much we're adjourned