GOOD AFTERNOON. I WOULD LIKE TO
CALL TO ORDER THIS HEARING OF
THE ASSEMBLY COMMITTEE ON
UTILITIES AND ENERGY. WE ARE
HERE TODAY FOR AN OVERSIGHT
HEARING FOCUSED ON RELIABILITY.
BOTH NEAR-TERM, THIS UPCOMING
SUMMER. AND, HOW WE'RE PREPARING
OVER THE COURSE OF THE NEXT FIVE
YEARS. BEFORE WE BEGIN, I WOULD
LIKE TO GO OVER A COUPLE OF
HOUSEKEEPING ITEMS, AS IS
CUSTOMARY, I WILL MAINTAIN
DECORUM THROUGHOUT THE HEARING
IN ORDER TO HEAR AS MUCH FROM
THE PUBLIC WITHIN THE LIMITS OF
OUR TIME. WE WILL NOT PERMIT
CONDUCT THAT DISRUPTS OR
OTHERWISE IMPEDES THE ORDERLY
CONDUCT OF LEGISLATIVE
PROCEEDINGS. ANY INDIVIDUAL WHO
IS DISRUPTIVE MAY BE REMOVED
FROM THE ROOM, THE COMMITTEE IS
PLEASED TO WELCOME THE
PARTICIPATION OF OUR BUDGET
SUBCOMMITTEE FOR CHAIR, ASSEMBLY
MEMBER BENNETT, TODAY. MANY OF
THE EXTRAORDINARY ACTIONS TAKEN
TO SHORE UP ELECTRIC RELIABILITY
OVER THE PAST FEW YEARS HAVE
GONE THROUGH THE BUDGET PROCESS,
AND MR. BENNETT'S CONTINUED
OVERSIGHT OF THESE PROGRAMS IS
CRITICAL. WELCOME, MR. BENNETT.
AND I ALSO WANT TO THANK OUR
PANELISTS FOR BEING HERE THIS
AFTERNOON TO HOLD THIS VERY
TIMELY CONVERSATION LEADING US
INTO THE SUMMER OF 2024. OVER
THE PAST THREE YEARS, THE
LEGISLATURE AND ADMINISTRATION
HAVE TAKEN EXTRAORDINARY
MEASURES TO SHORE UP ELECTRIC
RELIABILITY. I APPLAUD THESE
EFFORTS, BUT ALSO WE CANNOT
IGNORE THE FACT THAT MANY WERE
JUST IN TIME AND HAVE OCCURRED
OUTSIDE OF OUR NORMAL
PROCUREMENT PROCESSES, KEEPING
THE LIGHTS ON IS OBVIOUSLY
ABSOLUTELY CRITICAL WHEN THE
POWER GOES OFF, ESPECIALLY
DURING A HEAT WAVE. LIVES ARE ON
THE LINE. CALIFORNIANS IMPACTED. AND AS
YOU KNOW, AFFORDABILITY IS ALSO
A KEY FOCUS OF MY WORK HERE. AS
CHAIR OF THIS COMMITTEE,
ADEQUATE PLANNING IS ABSOLUTELY
CRITICAL TO ENSURE THAT WE MAKE
CALIFORNIA'S CLEAN ENERGY
TRANSITION IN THE MOST COST
EFFECTIVE WAY. AND SO THAT'S WHY
I WANT THIS HEARING TO FOCUS NOT
JUST ON OUR PREPARATIONS FOR
THIS SUMMER, BUT HOW WE ARE
PREPARING IN THE MID-TERM IN THE
2 TO 5 YEAR HORIZON TO ENSURE
RELIABILITY. AND I THINK,
IMPORTANTLY, TO ENSURE
RELIABILITY AT THE LOWEST COST.
SOME OF THE QUESTIONS WE'LL BE
ASKING TODAY ARE, ARE THE
EFFORTS WE UNDERTOOK OVER THE
LAST THREE YEARS A BRIDGE? ARE
THEY HELPING US CATCH UP TO SOME
OF THE BUMPS ALONG THE WAY? ARE
THESE EFFORTS NEEDED TO ENSURE
RELIABILITY INTO THE FUTURE? THE
TIGHT COMPETITION IN THE RAS
MARKET, THE BILLIONS IN GENERAL
FUND RESOURCES SPENT ON
RELIABILITY PROGRAMS, THE JUST
IN TIME PROCUREMENT. THESE COST
DRIVERS SHOULD CAUSE US TO PAUSE
AND REFLECT ON HOW BEST TO FACE
AND RESOLVE RELIABILITY
CHALLENGES IN THE MID-TERM. SO
AGAIN, I WANT TO BEGIN BY
THANKING YOU FOR YOUR TIRELESS
EFFORTS OVER THESE PAST FEW
SUMMERS. REALLY LOOK FORWARD TO
HEARING YOUR PERSPECTIVES AND
APPRECIATE THE BALANCE THAT WE
ARE ALL SEEKING AS WE TRANSITION
TO A GREEN GRID IN A WAY THAT IS
SUSTAINABLE, RELIABLE, AND
AFFORDABLE. SO WITH THAT, I'LL
OPEN IT UP TO MY COLLEAGUES TO
SEE IF ANYONE HAS OPENING
REMARKS BEFORE WE JUMP IN. VICE
CHAIR PATTERSON YEAH, I'M GOING
TO, I'M GOING TO HAVE TWO
QUESTIONS FOR THE PUC, TWO
QUESTIONS FOR THE DWR, ER AND
ONE QUESTION FOR CAISO. THOSE
QUESTIONS WILL FORM THE AREAS OF
MY CONCERN, AND WILL ESSENTIALLY
BE MY COMMENTS. I WILL HOLD OFF
ON THOSE UNTIL I QUESTION THE
APPROPRIATE PRESENTERS. THANK
YOU. THANK YOU, AND ASSEMBLY
MEMBER BENNETT, PLEASED TO HAVE
YOU JOIN US FOR TODAY'S HEARING.
THANK YOU VERY MUCH, AM I ON?
YEAH. GREAT, I, I'D REALLY LIKE
TO THANK THE CHAIR FOR THE
INVITATION TO BE HERE. I'D ALSO
LIKE TO THANK THE PANELISTS FOR
COMING TODAY. WE HAVE SOME OF
THE BEST MINDS IN CALIFORNIA ON
POLICY. WE HEAR FROM THE ENERGY
COMMISSION, THE ISO, THE CPUC
AND DWR. I'M REALLY, GENUINELY
LOOKING FORWARD TO WHAT YOU HAVE
TO SAY TODAY, AS MANY OF THOSE
LISTENING KNOW, OVER THE PAST
FEW YEARS, THE BUDGET HAS PLAYED
A CRUCIAL ROLE IN FUNDING SOME
OF THESE RELIABILITY PROGRAMS
THAT ARE OUT THERE. AND THE
PREVIOUS YEAR SURPLUSES HAVE
ALLOWED A COMMITMENT OF $9
BILLION TO THOSE EFFORTS,
INCLUDING CREATING THE STRATEGIC
RELIABILITY RESERVE, EXPANDING
DEMAND RESPONSE TO THE DEMAND
SIDE, GRID SUPPORT FUNDING,
POWER PLANT EFFICIENCY UPGRADES,
AND DISTRIBUTED ENERGY,
SUBSIDIZING ENERGY STORAGE
THROUGH THE RESIDENTIAL SOLAR
AND THE STORAGE PROGRAM AND THE
LONG DURATION STORAGE PROGRAM,
FORGIVING PAST DUE BILLS AS WELL
AS ADVANCING HYDROGEN PRODUCTION
AND INVESTING IN CRUCIAL
TRANSMISSION PROJECTS, THE
BUDGET ALSO ADOPTED SIGNIFICANT
POLICY PROPOSALS, INCLUDING
INCREASING THE PLANNING RESERVE
MARGIN FOR PUBLICLY OWNED
UTILITIES, ALLOWING RENEWABLE
ENERGY PROJECTS TO SEEK
PERMITTING AUTHORITY FROM THE
ENERGY COMMISSION, AND AS THE
STATE'S GENERAL FUND NOW IS
FACING THIS DEFICIT, WE'RE GOING
TO BE FORCED TO PULL BACK ON
SOME OF THESE PROGRAMS. SO WE
HAVE TO ENSURE THAT WE INVEST IN
THE MOST EFFECTIVE PROGRAMS WITH
THE LIMITED DOLLARS THAT WE
HAVE. WE'LL ALSO NEED TO ADOPT
POLICY REFORMS THAT ENSURE THAT
OUR STATE AGENCIES AND UTILITIES
ARE ABLE TO PROVIDE RELIABLE,
AFFORDABLE ELECTRICITY FOR ALL
CUSTOMERS, EVEN THROUGH THE
ENERGY TRANSITION IS A
CHALLENGES THAT COME WITH
CLIMATE CHANGE. SO I REALLY LOOK
FORWARD TO THIS, AND I DO WANT
TO EMPHASIZE ONE OTHER THING,
AND THAT IS THAT WE'RE NOT A
COMMAND ECONOMY AND A COMMAND
ECONOMY. IT'S REALLY EASY FOR
SOMEBODY AT THE TOP TO INSIST
AND HOLD EVERYBODY ACCOUNTABLE
AND FORCE EVERYBODY TO
COORDINATE. WE ARE A DEMOCRACY
THAT BY INTENCIÓN THÀNH DIVIDES
POWER UP AND DIVIDES
RESPONSIBILITY UP. AND SO WHEN
YOU FACE A MAJOR CHALLENGE LIKE
THIS, SWITCHING FROM A CARBON
ECONOMY TO A CARBON LESS ECONOMY
, YOU REALLY HAVE TO WORK
ESPECIALLY HARD, DILIGENTLY
SMART, TO TRY TO MAKE SURE YOU
CAN PULL ALL OF THESE VARIOUS
AGENCIES, LEGISLATIVE BODIES,
EXECUTIVE BRANCH, ALL TOGETHER
HERE TO TRY TO COORDINATE
PROPERLY. SO THAT'S THE
CHALLENGE FOR ALL OF US TO
ENGAGE IN ALL OF THOSE
APPROPRIATE BEHAVIORS AND
POLICIES THAT ENCOURAGE THE
RIGHT COLLABORATION AND
COOPERATION AND AVOID ALL OF
THOSE THINGS THAT TRADITIONAL
BUREAUCRACIES ARE PRETTY GOOD
AT, THAT KEEP US FROM BEING ABLE
TO BE COORDINATED AND ACCEPT
ACCOUNTABILITY AND
RESPONSIBILITY. SO I LOOK
FORWARD TO THIS BEING THE START
OF A OF A BIG PUSH FOR US TO
HAVE INCREASED ACCOUNTABILITY
AND RELIABILITY AND FEEDBACK.
THANK YOU VERY MUCH, MADAM
CHAIR. THANK YOU. ASSEMBLY
MEMBER BENNETT. WITH THAT, WE'LL
GO AHEAD AND WELCOME OUR
PANELISTS.
SO OUR PANELISTS FOR TODAY'S
HEARING INCLUDE CIVIC AND THE
VICE CHAIR OF THE CALIFORNIA
ENERGY COMMISSION, ALICE
REYNOLDS, THE PRESIDENT OF THE
CALIFORNIA PUBLIC UTILITIES
COMMISSION, DELFIN HU, THE
DEPUTY DIRECTOR OF ELECTRICITY
SUPPLY AND STRATEGIC RESERVES
OFFICE AT THE CALIFORNIA
DEPARTMENT OF WATER RESOURCES,
AND ELLIOT MAINZER, THE CHIEF
EXECUTIVE OFFICER OF THE
CALIFORNIA INDEPENDENT SYSTEM
OPERATOR, AND WE HAVE ASKED VICE
CHAIR GUNDA TO GO FIRST IN ORDER
TO PROVIDE ALL OF US WITH AN
OVERVIEW AND A BIT OF A PRIMER
ON RELIABLE PLANNING AND
FORECAST METHODOLOGY, BEFORE WE
HEAR FROM OUR OTHER PANELISTS,
JUST IN TERMS OF THE FORMAT FOR
OUR HEARING, I THINK I
ANTICIPATE THAT AFTER, AFTER
PEOPLE PRESENT MEMBERS MAY HAVE
QUESTIONS, BUT WE'D ASK THAT
EVERYONE STAY UP ON THE DAIS SO
THAT WE CAN, ASK QUESTIONS AND
ENGAGE IN CONVERSATION WITH THE
FULL PANEL. SO WITH THAT, OVER
TO YOU, COMMISSIONER. THANK YOU.
THANK YOU SO MUCH, CHAIR. AND
MEMBERS OF THE COMMITTEE, THANK
YOU FOR THIS OPPORTUNITY TO BE
IN FRONT OF YOU TODAY AND TO
PROVIDE THE UPDATES ON THE
SUMMER RELIABILITY FOR 2024, BUT
ALSO AS THE CHAIR POINTED OUT,
HIGH LEVEL PLANNING THAT WE ALL
DO HERE, AND ANSWER ANY
QUESTIONS THAT YOU MIGHT HAVE.
AND THANK YOU, CHAIR, FOR
SETTING UP THE CONVERSATION ON
THE IMPORTANCE BETWEEN
RELIABILITY, AFFORDABILITY AND
ENSURING THAT WE DO BOTH, THAT
IN THE NEAR TERM, BUT ALSO MID
AND LONG TERM. SO THANK YOU FOR
SETTING THE STAGE FOR THAT. SO
WITH THAT I'LL GO INTO THE FIRST
NEXT SLIDE PLEASE. OKAY. SO
ADJUSTED AT 30,000 FOOT LEVEL.
JUST STARTING OFF WITH OUR
BROAD, CLEAN ENERGY AGENDA, I
THINK, YOU KNOW, AS WE THINK
THROUGH PLANNING FOR THE STATE,
IT'S GOOD TO START WITH THE
OVERARCHING, CLIMATE AGENDA AND
HOW ELECTRICITY INDUSTRY AND
THE, AND OVERALL BUILDING
ELECTRIFICATION, KIND OF PLAYS
INTO THAT. SO AT 30,000 FOOT
LEVEL, WHEN WE TALK ABOUT THE,
THE CLEANEST PATHWAYS, THE MOST
AFFORDABLE PATHWAYS TO MOVE
FORWARD IN DECARBONIZING OUR
ECONOMY AND REACHING OUR 2045
GOALS, THERE IS A CONSENSUS THAT
WE NEED TO, ELECTRIFY LARGE
SWATHS OF OUR ECONOMY AND THEN
UNDER UNDERPIN THAT WITH A CLEAN
AND RELIABLE GRID, REALLY HAPPY
TO REPORT THAT AS OF 2022, THE
LATEST DATA WE HAVE TODAY, WE
ARE 61% ZERO CARBON IN
CALIFORNIA, AND THE PROGRESS
CONTINUES TO MOVE FORWARD. ALSO,
A HIGH LEVEL, REMINDER ON WHAT
THE LEGISLATURE HAS SET THE
GOALS FOR. SO WE'RE LOOKING AT
CONTINUING THAT ADVANCEMENT OF
CLEAN ELECTRICITY IN CALIFORNIA
TO 90% BY 2035, 95% BY 2040, AND
100, RETAIL SALES BY 2045. SO AS
WE CONTINUE THIS PATH ON, BOTH
ELECTRIFICATION AND DEPLOYING
CLEAN ENERGY, IT IS IMPORTANT TO
NOTE THAT WE HAVE UNPRECEDENTED
WEATHER EVENTS THAT ARE DRIVEN
BY CLIMATE CHANGE. IT'S
IMPORTANT TO MAKE SURE WHILE WE
ADVANCE QUICK AND FAST HERE ON
CLEAN ENERGY, THAT THAT
RELIABILITY BECOMES A
CENTERPIECE FOR US. GOING TO THE
NEXT SLIDE, PLEASE, I APOLOGIZE.
THIS IS ACTUALLY WHEN WE DO IT,
IT'S A IT'S A, ANIMATED SLIDE.
BUT HERE WE JUST HAVE IT AS A,
AS A SINGLE SLIDE. BUT JUST WANT
TO SET THIS UP AT A 30,000 FOOT
LEVEL. ON HOW WE DO A LAYERED
APPROACH IN PLANNING AS, AS WE
THINK ABOUT IT IN THE 2045 TIME
FRAME, YOU KNOW, LOOKING 25
YEARS AHEAD AND MORE IN THE
PLANNING REGIME OF TEN YEARS
AHEAD AND REALLY ONE YEAR AHEAD
AND THEN OPERATIONAL TIME FRAME
OF A OF A GIVEN SUMMER. SO WHAT
YOU SEE AT THE TOP LINE HERE
WHEN WE LOOK AT CLIMATE GOALS,
10 TO 25 YEARS AHEAD TIME FRAME,
WE REALLY RELY ON THE SCOPING
PLAN TO PROVIDE US A BLUEPRINT
FOR THE ECONOMY. AND THAT GIVES
US BOTH THE EXPECTED
ELECTRIFICATION DEMAND, THE
DIRECTIONALLY AND THE CLEAN
ENERGY RESOURCES REQUIRED. AND
THEN WE USE, YOU KNOW, THE
SPECIFIC VENUE AS SB 100, AS
DIRECTED BY YOU IN OUR REGULAR
UPDATES EVERY FOUR YEARS TO
REALLY STUDY A LITTLE BIT MORE
ON AN HOURLY BASIS ALL THE WAY
THROUGH 2045 TIME FRAME AS YOU
MAY EXPECT, GIVEN THE TIME FRAME
OF 10 TO 20 1520 YEARS AHEAD,
IT'S REALLY HARD TO HAVE A GOOD
DEMAND PROJECTION. SO WE
TYPICALLY RELY ON WHAT ARE
CALLED DEMAND SCENARIOS, AND WE
LOOK AT DIFFERENT DEMAND
SCENARIOS AND SUPPLY SCENARIOS
TO CONSTRUCT A DIRECTIONAL STORY
OF WHAT WE NEED TO BE BUILDING
IN CALIFORNIA. AND THEN COMES
THE TEN YEAR TIME FRAME WHERE
THINGS BECOME A LITTLE BIT MORE
REAL. THIS IS WHERE WE USE A
DEMAND FORECAST, AND THESE
DEMAND FORECASTS, WHICH ARE, A
LOT MORE IN LINE OF WHAT'S MOST
REASONABLE TO OCCUR. AND YOU
BEGIN TO DO MORE STOCHASTIC
ANALYSIS. AND THIS IS WHERE WE,
AS THE ENERGY COMMISSION
DEVELOPED THE DEMAND FORECAST.
AGAIN IN COORDINATION WITH ALL
OTHER AGENCIES THAT ARE
REPRESENTED HERE. AND THE DEMAND
FORECAST GOES OVER TO CPUC FOR
THEIR INTEGRATED RESOURCE
PLANNING STUDIES AND CPUC THEN
USES THAT ANALYSIS FOR PEGGING
THE PROCUREMENT. BUT ONCE WE DO
THAT IN THE TEN YEAR TIME FRAME,
THE NEXT QUESTION IS HOW ARE WE
ACTUALLY RESERVED THOSE SPECIFIC
PROCUREMENT AND AUTHORIZATION
AND STEEL IN THE GROUND FOR THE
PURPOSES OF SUPPORTING A GRID
AND THAT'S WHERE RESOURCE
ADEQUACY COMES INTO PLACE. AND
THIS IS WHERE PUC AND OTHER SRES
ARE DIRECTING AND TAKING ACTION
TO ENSURE THAT WE HAVE ENOUGH
RESOURCES RESERVED TO MEET THE
DEMAND THAT'S IN THE YEAR AHEAD
TIME FRAME AND FINALLY, YOU
KNOW, COMES CAISO IN THE ACTUAL
OPERATIONAL TIME FRAME. AGAIN,
CAISO DOES ANALYSIS IN ALL THESE
TIME FRAMES, AND WE DO THIS IN A
COORDINATED FASHION. BUT REALLY,
AS WE APPROACH A SUMMER, CAISO
IS LOOKING AT IT FROM A VERY
OPERATIONAL TIME FRAME. SO HOW
DOES THAT CHANGE EVERY HOUR? YOU
KNOW, THE UNCERTAINTIES OF
HYDRO. THEY USE THE LATEST
INFORMATION TO GIVE US A HEADS
UP ON HOW IT'S LOOKING
OPERATIONALLY. SO AGAIN, AS WE
GO ALONG THIS PROCESS FROM A 10
TO 15 YEAR TIME FRAME TO A REAL
TIME TIME FRAME, THE ASSUMPTIONS
BECOME BETTER AND BETTER AND WE
HAVE A BETTER PICTURE. NEXT
SLIDE PLEASE. SO BEFORE WE GO
INTO THE MORE DETAILS IN THE
PRESENTATION, JUST AT THE TOP
LEVEL, THE TOP LINES FOR 2024,
WE HAVE RELEASED, YOU KNOW,
JOINTLY THE AGENCIES HAVE WORKED
ON THIS, WE HAVE LOOKED AT THE
2024 ANALYSIS, AND THE LATEST
INFORMATION WE HAVE IS IN
JANUARY. AS OF JANUARY, BASED ON
THE INCREDIBLE PROGRESS WE'VE
MADE IN ADDING RESOURCES TO THE
GRID OVER THE LAST FOUR YEARS,
WE DON'T ANTICIPATE ANY SUPPLY
SHORTFALLS THIS YEAR UNDER
STANDARD CONDITIONS IN THE
PREVIOUS YEARS, SITTING IN FRONT
OF YOU, WE WERE STRESSING ABOUT
EXTREME WEATHER EVENTS AND HOW
COULD WE DO IT IN EXTREME
WEATHER EVENTS GIVEN AGAIN, HOW
MUCH RESOURCES WE HAVE BEEN ABLE
TO ADD THIS YEAR, EVEN IF A 2020
OR 2024, 2022 EVENTS, THAT'S
KIND OF HEAT EVENTS SHOW UP. WE
STILL FEEL REALLY WELL PREPARED
AGAIN. THERE IS SOME ROOM FOR
OPTIMISM, BUT ALSO SOME CAUTION,
WHICH WE'LL CAN EXPLORE HERE IN
THE NEXT SLIDES. BUT EVEN UNDER
THOSE EXTREME EVENTS, GIVEN THE
STEEL IN THE GROUND, WE HAVE
TODAY, WE HAVE LITTLE TO NO
SHORTFALLS. BUT THE CAUTION
THERE IS ALL THESE RESOURCES
CANNOT BE UTILIZED IN A MINUTE,
RIGHT? SOME OF THOSE RESOURCES
HAVE TO BE TURNED ON A FEW DAYS
AHEAD, AND THOSE REQUIRE YOU TO
HAVE THE LINE OF SIGHT OF, OKAY,
THE HEAT WAVE IS COMING UP IN
THE NEXT WEEK SO WE CAN START
PREPARING. SO IF THERE IS A
SUDDEN ONSET EVENT OR IF THERE
ARE COINCIDENTAL EVENTS LIKE A
HUGE, HEAT WAVE IS GOING THROUGH
THE WEST AND COINCIDENTAL WITH A
HUGE FIRE HAPPENING THAT'S,
THAT'S DISRUPTING A TRANSMISSION
LINE. THOSE KIND OF COINCIDENTAL
EXTREME EVENTS COULD STILL POSE
A GRID EMERGENCY, AND WE WANT TO
JUST LAY THAT OUT AS A CAUTION.
AND FINALLY, AS OF LAST YEAR, WE
HAVE RETIRED ABOUT 4000MW OF
ONCE THROUGH COOLING POWER
PLANTS. THEY CAME OFF AS
SCHEDULED. BUT AGAIN, THANKS TO
YOUR ACTION WITH THE FUNDING
THAT YOU PROVIDED, THE STATE
AGENCIES, ABOUT 3000 OF THEM
HAVE MOVED INTO THE STATE
STRATEGIC RESERVE. THOSE 3000MW
ARE NOT IN THE MARKET. THEY'RE
NOT USED EVERY DAY. ONLY UNDER
THESE EXTREME EVENTS. IF THE
STATE WERE TO GREENLIGHT IT,
THEY COME ONLINE AND SO THOSE
3000MW GIVE US A LOT OF CUSHION
UNDER THOSE EXTREME EVENTS. NEXT
SLIDE PLEASE. SO WITH THAT I'M
GOING TO GO INTO A LITTLE BIT OF
A SNAPSHOT ON THE PROGRESS, YOU
KNOW, TO CELEBRATE THE SUCCESSES
THAT WE HAVE. BUT ALSO, YOU
KNOW, AS WE CONTEXTUALIZE WITHIN
THE CAUTION OF WHAT WE'VE
LEARNED. NEXT SLIDE PLEASE. SO
THIS IS OUR SUMMARY OF THE
EVOLVING THINGS, BOTH IN TERMS
OF OUR PLANNING AND THE
CIRCUMSTANCES WE'VE EXPERIENCED
SINCE 2020, 2020. WE WERE
COMPLETELY CAUGHT OFF GUARD AND,
YOU KNOW, WE HAD A LOT OF
CLIMATE MODELS SUGGESTING THAT
THE HEAT WAVES AND CLIMATE
CHANGE IS COMING. BUT THAT WAS
ABOUT TEN YEARS AHEAD OF WHEN IT
SHOWED UP. WE WERE EXPECTING
THOSE CHANGES TO COME IN 2030
TIME FRAME AND IT SHOWED UP IN
2020. SO ONE OF THE BIGGEST
CHALLENGES IN 2020 WAS MUCH OF
OUR PLANNING WAS BASED ON
HISTORICAL DATA. WE WERE NOT
PROJECTING CLIMATE CHANGE
IMPACTS BASED ON CLIMATE MODELS
THAT ARE TAKING INTO ACCOUNT
CLIMATE CHANGE. SO THOSE
PLANNING ASSUMPTIONS THEN MET
WITH EXTREME HEAT EVENTS THAT
WERE SO OUTSIDE THE BOUNDS OF
WHAT OUR PLANNING WAS. WE HAD
OUTAGES. SO COMING INTO 2021, WE
TOOK A LOT OF ACTIONS TO BEGIN
TO BOTH PUT CLIMATE CHANGE
INFORMATION IN. BUT PUC HAS DONE
SOME UNPRECEDENTED PROCUREMENT
TO GREEN LIGHT OUR PROGRESS
THERE, PUC ALSO CHANGED THE PRM
REQUIREMENTS FOR RAS. THIS IS
THE PLANNING RESERVE MARGIN, THE
AMOUNT OF RESOURCES WE PLAN
ABOVE THE EXPECTED DEMAND. AND
WE WERE GOING INTO 21 AND WE
STILL HAD EXTREME HEAT, BUT WHAT
HAPPENED WAS A COINCIDENTAL
EXTREME DROUGHT. THE FIRST TIME
YOU HAD OROVILLE NOT NOT HAVING
ANY MEGAWATTS, BUT ALSO WE HAD
WILDFIRE ON JULY 19TH, 2021.
THAT'S WHEN WE HAD THE BOOTLEG
FIRE UP IN OREGON, AND WE
SUDDENLY HAD 4000MW OF
TRANSMISSION COMING INTO
CALIFORNIA, LOST IN A MINUTE.
AND WE HAD TO MAKE THAT UP IN
REAL TIME. AND THAT'S THE
BEGINNING OF THE SUPPLY CHAIN
ISSUES THAT WE STARTED TO SEE,
BECAUSE OF COVID, BUT ALSO SOME
OF THE FEDERAL TARIFFS THAT WERE
LEVIED. AND SO WE THOUGHT, OKAY,
WE HAD TWO YEARS UNDER OUR BELT.
WE WERE BEGINNING TO FEEL A
LITTLE BETTER IN HOW WE CAN
PLAN. WE WENT INTO 2022, WE
CONTINUE TO REASSESS THE PRM,
CONTINUE TO TAKE INTO ACCOUNT
SOME OF THE SUPPLY DISRUPTIONS,
IDENTIFIED, THE NEED FOR A
STRATEGIC RESERVE. AND WE'RE
WORKING WITH THE LEGISLATURE AND
THEN HITS ANOTHER LANDMARK
HISTORICAL CLIMATE EVENT IN
2022. JUST TO GIVE GIVE A SCALE
OF THIS IN 2022. IN SEPTEMBER,
THE EXPECTED LOAD AND THE KAISER
SYSTEM IS ABOUT 45,000MW. AND WE
WERE HITTING 53,000MW ON
SEPTEMBER 6TH, 2022, AND THAT
DIDN'T LAST MORE THAN TEN DAYS.
RIGHT? SO AND THEN EVEN THAT
PEAK DIDN'T HAPPEN. MORE THAN
ONE DAY. BUT THAT IS ADDING TO
LADWP'S ON THE TOP OF CAISO JUST
FOR A FEW DAYS. AND THAT'S THE
EXTREME NATURE THAT WE HAVE TO
PLAN FOR MOVING FORWARD. AND
2023, THANKS TO THE LEGISLATURE
FOR THE NUMBER OF TOOLS THAT
YOU'VE PROVIDED US IN 2022, THE
FUNDING FOR STRATEGIC RESERVE
AND THE CONTINUED WORK THAT
WE'VE ALL TAKEN IN BOTH
IMPROVING OUR ANALYSIS BUT ALSO
DIRECTING PROCUREMENT WITH THAT,
COMING INTO 2024, WE LOOK MUCH
BETTER. NEXT SLIDE. SO IN
SUMMARY, WHAT DID WE DO OVER THE
LAST FOUR YEARS. IT'S REALLY
AROUND IMPROVING GRID PLANNING
AND ESSENTIALLY MAKING SURE THAT
WE AUGMENT OUR HISTORICAL
WEATHER PATTERNS WITH MORE
CLIMATE CHANGE STUDIES,
IMPROVEMENTS TO RESOURCE
ADEQUACY PROCESSES AT PUC, AND A
LARGE AND DIVERSE PROCUREMENT
THAT HAPPENED ON THE SUPPLY
SIDE. YOU KNOW, THERE'S A NUMBER
OF BILLS, YOU KNOW, THAT THAT
GIVES US AN A PERMITTING
AUTHORITY AND SUCH TO
STREAMLINE. AND, YOU KNOW,
MOVING FORWARD, ALONG WITH
CUSO'S WORK ON INTERCONNECTION
AND UPGRADE REFORM AND
DELIVERABILITY REFORMS. AND
FINALLY, WHILE WE ARE DOING
EVERYTHING WE CAN DO TO
ACCELERATE THE CLEAN ENERGY
PROCUREMENT AND STEEL ON THE
GROUND, IT IS ESSENTIAL THAT WE
FEEL COMFORTABLE AND CONFIDENT
THAT WE CAN GET THROUGH AN
EXTREME HEAT EVENT IN THE SHORT
TERM, AND THANKS AGAIN FOR THE
LEGISLATURES. I, YOU KNOW,
BLESSING IN A WAY, FOR LACK OF
BETTER WORDS AND GIVING US TOOLS
TO GET THROUGH THAT. SO WITH
THAT, I WILL PASS TO PRESIDENT
REYNOLDS TO JUST GIVE A HIGHER
LEVEL OF, PROCUREMENT STRATEGY
BY PUC. THANK YOU, VICE CHAIR
GUNDA, AND GOOD AFTERNOON, CHAIR
PETRIE-NORRIS VICE CHAIR
PATTERSON, MEMBERS OF THE
COMMITTEE AND ASSEMBLY MEMBER
BENNETT. AND JUST TO OUTLINE OUR
PRESENTATION, I'M GOING TO GO
THROUGH A COUPLE OF SLIDES AND
I'LL TURN IT BACK TO VICE CHAIR
GUNDA. AND THEN WE HAVE
ADDITIONAL SLIDES, SO I WANTED
TO PROVIDE A LITTLE BIT OF
ADDITIONAL DETAIL ABOUT ONE
PIECE OF THE FRAMEWORK THAT WAS
OUTLINED BY VICE CHAIR GUNDA,
AND THAT IS THE PIECE OF OUR
PLANNING PROCESS THAT RELATES TO
THE 40 PLUS LOAD SERVING
ENTITIES, THE RETAIL SELLERS
THAT ARE WITHIN THE PUC'S
JURISDICTIONAL PLANNING PROCESS
AND THOSE ARE THE INVESTOR OWNED
UTILITIES PGE AND SOUTHERN
CALIFORNIA EDISON, SAN DIEGO GAS
AND ELECTRIC, AS WELL AS THE
COMMUNITY CHOICE AGGREGATORS
THAT SERVE A SIGNIFICANT PORTION
OF CALIFORNIA'S LOAD AND DIRECT
ACCESS PROVIDERS. SO IN TOTAL,
IT'S ABOUT 75% OF THE LOAD IN
CALIFORNIA SERVED BY THESE
ENTITIES. AND THEY'RE PART OF
THE PUC PLANNING PROCESS. AND SO
THE SLIDE BEFORE YOU SHOWS OUR
THE WAY WE THINK AHEAD ABOUT
WHAT PROCUREMENT NEEDS TO HAPPEN
. SO NEW RESOURCES THAT ARE
BROUGHT ONTO LINE AND ONLINE,
OUR PROCESS IS GEARED TOWARDS
THE CARB SCOPING PLAN. SO WE
LOOK AT A GREENHOUSE GAS
EMISSION REDUCTION TARGET FOR
THE ELECTRIC SECTOR. WE TAKE THE
PORTION OF THAT THAT APPLIES TO
THE ENTITIES IN OUR PROCESS,
THOSE LOAD SERVING ENTITIES. AND
THEN WE CALCULATE WHAT'S NEEDED
OVER TIME TO REACH THE ULTIMATE
TARGET OF CARBON NEUTRALITY BY
2045. AND WE ALSO LOOK THIS IS
BASED ON THE SIX DEMAND
FORECAST. SO EACH YEAR WE UPDATE
OUR PLANNING IN RELATION TO THAT
FORECAST AS IT GETS UPDATED BY
THE CEC TO MAKE SURE THAT WE'RE
TRACKING CHANGING DEMAND OVER
TIME. AND AS YOU KNOW, WE ARE
SEEING DEMAND, CHANGE BECAUSE OF
CLIMATE CHANGE. WE TALKED ABOUT
SOME EXTREME EVENTS, THIS
PLANNING PROCESS REALLY IS
NORMAL PLANNING RANGES. AND SO
THAT IS ARE WE PREPARED FOR THE
WORST DAYS OF EVERY MONTH
THROUGHOUT THE YEAR AND THEN
MOVING FORWARD, ARE WE PLANNING
AHEAD AND GETTING RESOURCES
UNDER CONTRACT AND BUILT SO THAT
THEY'RE THERE WHEN WE NEED THEM
FOR THE SYSTEM, FOR RELIABILITY
AND TO MEET GREENHOUSE GAS
EMISSION TARGETS, SO OVER THE
PAST FIVE YEARS, SO THE SLIDE
SHOWS STARTING IN 2021, WE
STARTED IN 2019 MAKING ORDERS
AND ALSO REACTING TO THE HEAT
WAVES OF 2020, WITH
UNPRECEDENTED PROCUREMENT
ORDERS. THE TOTAL ON THIS CHART
IS CUMULATIVE. AT THE BOTTOM,
IT'S 18,800MW THAT HAVE BEEN
ORDERED FROM 2021 TO 2028, AND
THAT REALLY IS IT'S A RECORD FOR
US, AND IT REFLECTS THE NEED TO
DEAL WITH CHANGING CONDITIONS,
INCREASE DEMAND, AS WELL AS THE
GREENHOUSE GAS EMISSION TARGETS,
AND SO THE AND THE ORDER ALSO
IMPORTANTLY INCLUDES THE ORDERS
THAT WE'VE ISSUED INCLUDES
1000MW OF, LONG DURATION STORAGE
AND 1000MW OF LONG LEAD TIME
RESOURCES TO REFLECT THE NEEDS
OF THE SYSTEM. AND CHAIR
PETRIE-NORRIS ALLUDED TO THIS AT
THE BEGINNING IS THAT WE NEED
PLANNING TO DETERMINE THE BEST
WAY TO MEET THE NEEDS OF THE
SYSTEM IN THE MOST COST
EFFECTIVE WAY. AND SO THAT'S
PART OF WHAT OUR MODELING DOES
WITH OUR MODELING. ALL OF THE
INDIVIDUAL LOAD SERVING ENTITIES
, THE 40 PLUS ENTITIES, ALSO
PREPARE THEIR OWN PLANS. HOW ARE
THEY GOING TO MEET THEIR
CUSTOMERS NEEDS? ALL OF THOSE
ARE COMPILED, THROUGH OUR
PROCESS AND THEN AND MONITORED
FOR RELIABILITY AND PROCUREMENT
ORDERS TIER FROM THAT, I'LL TURN
NOW TO THE NEXT SLIDE. SO THE
NEXT SLIDE SHOWS THE RESOURCES
THAT HAVE COME ONLINE. SO THIS
IS PURSUANT TO THOSE PROCUREMENT
ORDERS AND THEN HAVE BEEN
CONTRACTED TO COME ONLINE. SO ON
THE LEFT SIDE OF THE VERTICAL
LINE, THESE ARE ACTUAL NEW
PROJECTS THAT ARE HERE THAT ARE
HAVE BEEN BUILT TO SERVE
CALIFORNIA LOAD AND SO YOU CAN
SEE THE GREAT INCREASE IN
PROJECTS STARTING IN IN 2020 AND
GOING UP TO 2024, WE SAW THAT
RESOURCE DEVELOPMENT HAS NEARLY
DOUBLED OVER THE PAST FOUR
YEARS. AND IN 2023 ALONE, WE HAD
A RECORD OF PROCUREMENT OR
EXCUSE ME, RECORD BUILD, BUILD
OF NEW PROJECTS AT 5700MW THAT
CAME ONLINE, AND WE EXPECT THAT
PACE TO CONTINUE. SO AS YOU CAN
SEE FROM THE CHART, THE PROJECTS
WILL BE GROWING. AND THESE ARE,
I THINK, REALLY IMPORTANTLY,
THESE ARE PROJECTS THAT ARE
UNDER CONTRACT. SO ALL OF THE
LOAD SERVING ENTITIES HAVE DONE
COMPETITIVE SOLICITATIONS,
RECEIVED BIDS AND ENTERED INTO
CONTRACTS WITH DEVELOPERS FOR
THESE PROJECTS TO COME ONLINE.
SO WE'VE COMPILED THAT
INFORMATION AND DEPICTED IT HERE
IN THE CHART, REALLY JUST TO
SHOW THE ACCELERATION AND THE,
THE WHAT, WHAT WE SEE AS
PREDICTED, IT'S ALSO THE OTHER
POINT THAT I WANTED TO NOTE IS
THAT WE'LL, WE'LL TALK ABOUT A
COUPLE OF NUMBERS HERE. SO WHEN
YOU SEE THE, THE 18,500MW OF NEW
RESOURCES ADDED, THAT'S A IN CðC
NUMBER, MEANING THAT'S A NUMBER
THAT, THAT OKAY, THAT'S A
NAMEPLATE NUMBER. SORRY. THAT IS
EXPECTED TO THAT THAT'S THE
PROJECT AND THE MAXIMUM
CAPACITY. SO IF YOU'RE TALKING
ABOUT A SOLAR PROJECT, THAT'S
HOW MUCH MAXIMUM CAPACITY THAT
SOLAR PROJECT CAN PRODUCE. SO
THAT WOULD BE DURING THE MIDDLE
OF THE DAY FOR A BATTERY PROJECT
. WE HAVE AND BUT THE SOLAR
PROJECT ALSO HAS A DIFFERENT
VALUE. AND THAT VALUE IS WHAT IS
THE VALUE THAT IS NEEDED AT THE
TIME WHEN THE GRID IS MOST
CONSTRICTED. AND FOR CALIFORNIA
AT THIS POINT, IT IS AT THE END
OF THE DAY, AS SOLAR RESOURCES
ARE GOING OFFLINE, AND SO SOLAR
PROJECTS WILL HAVE A DIFFERENT
VALUE THAT WE CALL THE NET
QUALIFYING CAPACITY VALUE. AND
THE PROCUREMENT ORDERS THAT WE
ISSUE ARE GEARED TOWARD THAT
NUMBER. WE WANT TO MAKE SURE
THAT WE HAVE THE CAPACITY ONLINE
WHEN WE NEED IT. SO THE NUMBERS
LOOK A LITTLE BIT DIFFERENT FROM
THE NAMEPLATE CAPACITY OF THE
PROJECTS THAT ARE SHOWN HERE.
FOR BATTERIES, IT'S ABOUT THE
SAME. YOU CAN USE BATTERIES AT
THE TIME THE SYSTEM NEEDS THEM,
SO I WANTED TO MAKE THAT
DISTINCTION, BUT OVERALL WE'RE
SEEING A RAPID INCREASE IN
DEPLOYMENT OF PROJECTS. WE ALSO
HAVE, STOOD UP AND ARE
CONTINUING TO, WORK ON GROWING
THE TRACKING, ENERGY DEVELOPMENT
TASK FORCE, TED, TASK FORCE,
THAT HELPS TO MANAGE BARRIERS
THAT COME UP WITH VARIOUS
PROJECTS. SO REALLY IT IT'S TO
MAKE SURE THAT IF A PROBLEM
COMES UP, WE HAVE A COORDINATED
TEAM OF IT'S AN INTERAGENCY
TEAM, THèC TEAM THAT ARE READY
TO WORK THROUGH PROJECT WORK
THROUGH PROBLEMS WITH THOSE
PROJECTS. AND SOMETIMES IT MEANS
GETTING THE DEVELOPER TO TALK TO
THE UTILITY TO MAKE SURE THAT
STUDIES HAVE BEEN DONE ON TIME,
AND CONNECTING PEOPLE TO MAKE
SURE THAT ONLINE DATES ARE MET.
AND WE'VE SEEN A LOT OF SUCCESS
THROUGH THAT PROCESS, AND THAT'S
GOING TO CONTINUE. ALL RIGHT.
I'LL TURN IT BACK TO, DEL, OKAY,
ELLIOT, I'M GOING TO PICK UP
HERE FOR A MOMENT. SO THANK YOU.
SO, CHAIR PETRIE-NORRIS PLEASURE
TO SEE YOU. MEMBERS OF THE
COMMITTEE, ASSEMBLY MEMBER
BENNET, THANK YOU SO MUCH FOR
HAVING ME, I WANTED AS AS THE
INDEPENDENT SYSTEM OPERATOR, I
THINK YOU'RE CERTAINLY WELL
FAMILIAR THAT OUR PRIMARY ROLE,
OF COURSE, IS TO MAINTAIN THE
REAL TIME LOAD RESOURCE BALANCE
IN CALIFORNIA, KEEP THE LIGHTS
ON IN REAL TIME FOR ABOUT 80% OF
THE STATE AND AS AS VICE CHAIR.
GUNDA AND PRESIDENT REYNOLDS
HAVE DESCRIBED WITH WITH THIS
INCREDIBLE AMOUNT OF NEW
RESOURCE THAT HAS COME ONLINE IN
THE LAST SEVERAL YEARS, OUR ROLE
HAS BEEN TO EFFECTIVELY
INTEGRATE THAT INTO THE SYSTEM,
TO BRING IT ONLINE, TO
INCORPORATE IT INTO THE ENERGY
MARKET, AND TO MAKE SURE THAT
IT'S DISPATCHED EFFICIENTLY. OF
COURSE, I'LL REMARK JUST JUST
THE INCREDIBLE SUPPLY OF FOR OUR
LITHIUM ION BATTERIES THAT HAVE
COME ON NOW, ABOUT 8000MW
OPERATING IN OUR SYSTEM VERY
EFFECTIVELY, AS YOU'VE ALSO
HEARD, WE NEED TO SUSTAIN THIS
PACE OF ONBOARDING OF NEW
RESOURCES FOR MANY YEARS TO COME
TO STAY ON TRACK. AND ONE OF THE
OTHER ESSENTIAL ELEMENTS THAT WE
ALSO HAVE AN IMPORTANT
RESPONSIBILITIES IS TO ENSURE
THAT THERE'S ENOUGH TRANSMISSION
CAPACITY AVAILABLE TO BRING THIS
NEXT GENERATION OF RESOURCES ON
BOARD. THIS IS ANOTHER AREA THAT
HAS REQUIRED EXQUISITE
COOPERATION AND COORDINATION
BETWEEN THE ISO AND THE ENERGY
COMMISSION. THE PUBLIC UTILITIES
COMMISSION, OTHER LOCAL
REGULATORY AUTHORITIES,
STAKEHOLDERS ACROSS CALIFORNIA.
AND WE'VE TRIED TO REALLY LEAN
IN HERE THESE LAST SEVERAL YEARS
TO DEVELOP A MUCH MORE SORT OF
FORWARD LOOKING, LONG TERM
APPROACH TO TRANSMISSION
PLANNING, INCLUDING A 20 YEAR
OUTLOOK THAT WE PRODUCED BACK IN
2022. AND TO MAKE SURE THAT
THOSE CORE INPUTS AROUND LOAD
FORECASTING AND RESOURCE
PLANNING AND RELIABILITY ARE
INCORPORATED INTO OUR
TRANSMISSION PLANS. AND SO WE'VE
ALSO ATTEMPTED TO USE
TRANSMISSION PLANNING AS A
FORWARD LOOKING VARIABLE THAT
SHAPES THE PATTERN OF RESOURCE
DEVELOPMENT AND INTERCONNECTION.
QUEUING AND PROCUREMENT RATHER
THAN REACTING TO IT TRANSMISSION
, AS YOU ALL KNOW, IS A VERY
LONG DATED RESOURCE. IT TAKES A
TREMENDOUS AMOUNT OF COMMITMENT
OF TIME, DOLLARS AND INVESTMENT,
PERMITTING, SITING. AND SO YOU
REALLY NEED TO STAY AHEAD OF THE
CURVE ON TRANSMISSION THÀNH TO
MAKE SURE THAT YOU'RE ABLE TO
DELIVER THE NEXT GENERATION OF
RESOURCES. AND OF COURSE, WE ALL
KNOW THAT INTERCONNECTION
QUEUING WITH LITERALLY HUNDREDS
OF THOUSANDS OF RESOURCES LINED
UP TO HAVE AN OPPORTUNITY TO GET
ON THE GRID, IS ANOTHER AREA
WHERE WE NEED TO MAKE MUCH MORE
SIGNIFICANT PROGRESS IN
ONBOARDING, AND WE HAVE A VERY,
AMBITIOUS STAKEHOLDER INITIATIVE
UNDERWAY RIGHT NOW, WHICH,
AGAIN, IS INVOLVED COOPERATION,
COORDINATION WITH OUR PARTNERS
AT THE STATE TO REALLY TRY TO
MAKE SURE THAT QUEUING IS NO
LONGER A BARRIER, THAT WE'RE
RIGHTSIZING THE STUDIES COMING
OUT WITH, WITH STUDIES THAT
PROVIDE MEANINGFUL RESULTS FOR
THE ISO, FOR THE UTILITIES AND
ULTIMATELY TAKE SOME OF THE
FRICTION OUT OF THE SYSTEM SO
THAT WE CAN CONTINUE TO ONBOARD
RESOURCES AS EFFICIENTLY AND
COST EFFECTIVELY AS POSSIBLE FOR
MANY YEARS TO COME. SO WE'LL
COME BACK TO SOME OF THE OTHER
ISSUES, BUT WANTED TO ADD THAT
DIMENSION OF TRANSMISSION
BECAUSE IT REALLY IS A CRITICAL
VARIABLE IN THE RELIABILITY AND
AFFORDABILITY EQUATION. THANK
YOU. PRESIDENT, MAINZER, SO I
JUST KIND OF, SUMMARIZING. SO WE
JUST WENT THROUGH THE DIFFERENT
PLANNING PROCESSES AND WHAT PUC
HAS BEEN ABLE TO DO IN TERMS OF
PROCUREMENT, AND THEN THE CAISO
HAS BEEN ABLE TO DO TO HELP WITH
CONNECTING THOSE PROCUREMENT. SO
FOR THE OVERALL HISTORY, I JUST
WANT TO END WITH THE NEXT SLIDE.
IF YOU WANT TO GO TO THE NEXT
SLIDE. SO WHAT DOES THAT
TRANSLATE TO. AND WHAT YOU'RE
SEEING HERE ARE THE GRID STRESS
EVENTS OVER THE LAST, FOR YEARS,
INCLUDING 2020 FOR SOME OF THE
RESULTS WE HAVE AS OF TODAY. AND
I WOULD LIKE TO DIRECT YOUR
ATTENTION TO THE BOTTOM TWO
ROWS, WHICH CALLS THE TOTAL
EMERGENCY ALERTS IN KAISER AREA.
AND THEN THE NEXT ONE IS THE
TOTAL EMERGENCY ALERTS ACROSS
THE WESTERN RC FOOTPRINT.
ARCBEST FOOTPRINT THAT KAISER IS
THE RELIABILITY COORDINATOR FOR.
AS YOU CAN SEE THERE ON THE ROAD
THAT LOOKS AT KAISER BALANCING
AREA, WE HAD 24 OF THOSE
EMERGENCY ALERTS IN 2020, DROP
DOWN TO FIVE BECAUSE OF YOU
KNOW, WE DIDN'T HAVE THAT THAT
BAD OF A SUMMER IN 2021, EXCEPT
FOR THE FIRE 2022. WE WENT UP TO
22 OF THOSE AND 23, WE WERE ONLY
AT THREE BECAUSE WE HAD REALLY
GOOD WEATHER, COMPLEMENTED WITH
THE ENORMOUS AMOUNT OF BUILD OUT
WE'VE HAD OVER THE LAST FEW
YEARS. BUT IF YOU LOOK AT THE
WEST AS A WHOLE, THOSE CONTINUE
TO BE PRETTY HIGH, SO IF YOU
LOOK AT RC WEST AS A WHOLE, THAT
WAS 47 IN 2020 AND IN 2023, IT
WAS STILL 29. SO WHILE WE ARE
ADAPTING TO THE CLIMATE CHANGE
IMPACTS, THE REST OF THE WEST IS
STILL CATCHING UP. AND EVEN IN
2024, GIVEN SOME OF THE
NORTHWEST, ISSUES WE'VE HAD,
WE'VE ALREADY HAD EIGHT
EMERGENCY ALERTS IN THE WEST,
WITHOUT KAISER. SO THANK YOU. I
JUST WANTED TO CLOSE THE HISTORY
WITH THAT AS WE GO INTO THE 2024
AND THEN WE'LL JUST PAUSE A
MOMENT BEFORE WE JUMP INTO THE
2024, OUTLOOK, TO SEE IF MEMBERS
HAVE QUESTIONS ON THE MATERIALS
WE'VE COVERED SO FAR. ALL RIGHT.
WE'LL START WITH VICE CHAIR
PATTERSON. APPRECIATE THAT,
MADAM CHAIR. THIS IS A QUESTION
TO THE PUC. I NOTICED LAST WEEK,
THE SAN FRANCISCO CHRONICLE
REPORTED THAT CALIFORNIA'S
ELECTRICITY RATES ARE THE SECOND
HIGHEST IN THE 50 STATES. I AM
HAVE SAT ON THIS COMMITTEE FOR
THE LAST 11, GOING ON 12 YEARS
NOW. AND THE TERM AFFORDABILITY
HAS BEEN THROWN AROUND OVER AND
OVER AND OVER AGAIN. I DON'T
KNOW HOW YOU CAN DEFINE THIS
PATHWAY AS AFFORDABLE, AS
AFFORDABLE COMPARED TO WHAT OUR
CONSTITUENTS ARE HAVING. I MEAN,
THEY'RE LITERALLY ALMOST, IN
REBELLION. WE KNOW THAT THE
RESOURCE ADEQUACY RULES REQUIRE
THE UTILITIES TO BUY ENOUGH
ENERGY. SO THEY HAVE THIS
MARGIN, THIS CUSHION. BUT IF
THESE UTILITIES, LARGE OR SMALL,
IF THEY HAVE TO PAY ASTRONOMICAL
PRICES FOR THESE NEW RESOURCES
THAT COME ONLINE, WHO'S GOING TO
ABSORB THOSE COSTS? HAVE YOU
DONE A SERIOUS, TRUSTWORTHY
ANALYSIS THAT THIS RUSH TO THIS
ADDITIONAL SUPPLY WILL WILL HAVE
ON RATES? BECAUSE MY
CONSTITUENTS IN CENTRAL
CALIFORNIA ARE SITTING IN FRONT
OF THEIR TELEVISION SETS, AND
THEY'RE SEEING A VERY
DISINGENUOUS, PG AND E
ADVERTISING WHERE THE PRESIDENT
COMES ON AND BASICALLY TALKS
ABOUT HOW THEY'RE UNDERGROUNDING
THE POWER LINES AND HOW THEY'RE
MAKING ALL OF THESE DECISIONS
AND CHOICES TO MAKE IT A MORE
RELIABLE AND MORE AFFORDABLE
GRID. I MEAN, THAT'S INSULTING
TO OUR OUR CONSTITUENTS. ALL
THEY GOT TO DO IS, IS OPEN UP A
PG AND E BILL. SO. I MEAN, HOW
DO YOU TEST THE PRICE TAG OF
THESE NEW RESOURCES COMING
ONLINE? IT SEEMS TO ME THAT THE
MORE WE ARE ASPIRATIONAL ABOUT
THE CLIMATE, THE MORE OUR
RESIDENTS HAVE TO PAY HIGH COSTS
. CAN SOMEBODY ADDRESS THIS?
THANK YOU FOR THE QUESTION, AND
IT IS A REALLY IMPORTANT
QUESTION TO THINK ABOUT HOW THIS
WORK THAT IS GEARED TOWARD,
CLIMATE CHANGE TARGETS, IS DONE
AND IS DONE IN THE MOST COST
EFFECTIVE WAY. YOU'RE GOING TO
HEAR A LITTLE BIT IN THE NEXT
PART OF THE PRESENTATION ABOUT
HOW THE AGENCIES HAVE WORKED
TOGETHER ON, MEASURES TO ADDRESS
CONTINGENCIES IN THE EXTREME
CLIMATE EVENTS THAT WE ARE
SEEING WITH AN EFFORT TO
MINIMIZE THE IMPACT ON
RATEPAYERS. AND SO WE'LL TALK
ABOUT DIFFERENT ELEMENTS OF
THOSE, MEASURES THAT ARE
EXTRAORDINARY. AND AS YOU HEARD,
CHAIR, VICE CHAIR GOING TO TALK
ABOUT SOME OF WHICH ARE ONLY
NEEDED FOR TEN DAYS OF THE YEAR
OR ZERO DAYS OF THE YEAR IF WE
HAVE A MILD SUMMER. AND SO WE
HAVE TO BE REALLY CAREFUL ABOUT
INVESTING, ESPECIALLY RATEPAYER
FUNDS FOR CAPACITY THAT'S NOT
ACTUALLY NEEDED AND RESOURCES
THAT AREN'T ACTUALLY NEEDED. AND
SO THAT'S PART OF THE REASON WE
THINK ABOUT THIS IN IN TWO WAYS.
ONE IS THE NORMAL PLANNING
STANDARDS. AND WE LOOK TO THE
LOAD SERVING ENTITIES TO DO
COMPETITIVE BIDDING TO MAKE SURE
THEY'RE GETTING THE LOWEST COST
RESOURCES. AND THEN FOR EXTREME
EVENTS, WE LOOK AT OTHER SOURCES
OF FUNDING. GIVEN THAT THIS IS A
STATEWIDE BENEFIT, TO MAKE SURE
WE'RE READY TO HANDLE EXTREME
EVENTS. SO TO THE EXTENT WE CAN,
WE'VE BEEN WORKING TOGETHER. WE
MEANING THE STATE AGENCIES,
TOGETHER WITH OUR PARTNER CAISO
ON WHAT TOOLS DO WE HAVE? WHAT
ARE THE MOST COST EFFECTIVE
TOOLS, AND HOW CAN WE DEPLOY
THEM PRECISELY AND LINE THEM UP
PRECISELY SO THAT WE'RE NOT
OVERPAYING FOR CAPACITY, THAT WE
DON'T NEED, OR ENERGY THAT WE
DON'T NEED TO MEET OUR NEEDS?
AND I'LL ALSO NOTE THAT WE ARE
GETTING HIT BY CLIMATE CHANGE
EVENTS. WE KNEW THAT THIS WAS
GOING TO BE EXPENSIVE WHEN WE
WHEN WE ENVISIONED WHAT'S
HAPPENING WITH CLIMATE CHANGE
AND STUDIES SHOWING HOW OUR
STATE IS CHANGING AND HOW WE'RE
ADAPTING TO CLIMATE CHANGE. SO
THIS IS A VERY HARD ISSUE. I
APPRECIATE THE CONTINUING
CONVERSATION ON WAYS TO REDUCE,
IMPACTS ON RATEPAYERS, BECAUSE
WE HAVE SEEN A LOT OF ADAPTATION
EFFORTS TO CLIMATE CHANGE, SUCH
AS WILDFIRE EXPENDITURES, AND
OTHER NEW EXPENSES GO INTO RATES
RECENTLY, AND IT IS A HUGE
ISSUE. SO THANK YOU FOR
HIGHLIGHTING IT. YEAH. WELL,
LOOK, WHEN I FIRST SHOWED UP
HERE, WE TALKED ABOUT AFFORDABLE
RATES AND AFFORDABLE RATES WERE
HERE. TEN YEARS LATER, YOU'RE
HERE TALKING ABOUT SUBSTANTIAL
COSTS OF NEW PROCUREMENT, WHICH
WILL AFFECT RATEPAYERS. AND YET
YOU'RE GOING TO STILL USE THE
TERM AFFORDABLE WHEN THE RATES
ARE UP HERE. SO I DON'T KNOW
WHAT YOU'RE DOING TO TRY TO
MODERATE RATES, BUT I CAN'T
CONVINCE MY RATEPAYERS BACK HOME
THAT IT'S MODERATING RATES.
THANK YOU. ASSEMBLY MEMBER,
ASSEMBLY MEMBER. BENNETT THANK
YOU. POINT OUT A COUPLE OF
THINGS. ONE, ELECTRICITY IS
GOING TO COST MORE IN
CALIFORNIA. IF THERE'S JUST NO
WAY WE'RE GOING TO DRAMATICALLY.
THE LIGHTS ON AM I ON THE
MICROPHONE? CLOSER WORK THE
MICROPHONE. ALL RIGHT. GREAT
ELECTRICITY IS GOING TO COST
MORE IN CALIFORNIA. THE QUESTION
ISN'T, YOU KNOW, HOW ARE WE
GOING TO GET ELECTRICITY COSTS
LESS THAN IT COSTS TODAY? THE
QUESTION IS, CAN WE DO ALL THE
THINGS THAT WE HAVE TO DO TO
EXPAND THE GRID, MAKE IT MORE
RELIABLE, MAKE IT MORE
RESILIENT, ALLOW US TO TRANSFER
COSTS THAT WE HAVE BEEN SPENDING
FOR THINGS LIKE GASOLINE,
THEY'LL THEY'LL ALL BE REFLECTED
IN OUR ELECTRICITY BILL. BUT WE
HAVE TO DO IT AS COST
EFFECTIVELY AS POSSIBLE. AND I
THINK THAT'S WHAT I'M HEARING
THE AGENCY'S REFERRING TO, BUT
BUT I THINK WE FOOL OURSELVES
AND WE FOOL THE PUBLIC. IF WE
DON'T SAY ELECTRICITY RATES WILL
COST MORE WATER WILL COST MORE
IN CALIFORNIA, AS IT BECOMES
MORE PRECIOUS, ELECTRICITY WILL
COST MORE IN CALIFORNIA AS IT
BECOMES, MORE, MORE PRECIOUS.
BUT THERE WILL BE OFFSETTING
ASPECTS TO THAT. LIKE I
MENTIONED, THE GASOLINE, THERE'S
ALSO SOMETHING WE HAVE TO BE
AWARE OF WHEN YOU'RE SWITCHING
FROM ONE KIND OF MARKET, A
CARBON BASED MARKET, TO A CARBON
LESS MARKET, THERE'S GOING TO BE
SIGNIFICANT DISLOCATIONS, AND
THOSE WILL CAUSE COSTS TO GO UP.
ALSO, AGAIN, WE NEED TO DO THE
BEST JOB WE CAN, SO I JUST WANT
TO RESPOND TO THIS, TO THAT
QUESTION BECAUSE IT'S GOING TO
KEEP COMING UP. AND THE QUESTION
IS, ARE WE DOING THE BEST JOB
THAT WE POSSIBLY CAN? BUT THE
QUICK QUESTIONS THAT I HAVE,
FIRST OF ALL, COULD ONE OF YOU
OR ALL OF YOU JOINTLY JUST
SUMMARIZE WHO'S RESPONSIBLE FOR
GRID EXPANSION FROM PLANNING TO
ACTUAL IMPLEMENTATION? WHAT'S
HOW DOES THAT HOW DOES THAT WORK
THROUGH THE AUTHORITY PROCESS.
IT REALLY IS ALL OF US. YEAH.
AND SO MAYBE I'LL START AND THEN
OTHERS CAN JUMP IN. SO WHEN YOU
THINK ABOUT A TIMELINE STARTING
FROM DEMAND FORECAST, THE ENERGY
COMMISSION, THEY DO THE DEMAND
FORECAST. THEY HAVE EXPERTS
WORKING ON THAT. THEY'RE LOOKING
AT CHANGES BECAUSE OF CLIMATE
CHANGE EVENTS THAT DEMAND
FORECASTS JUST COMES TO THE CEC.
CPUC WE USE IT TO PLAN DO OUR
PLANNING PROCESS WITH THE LOAD
SERVING ENTITIES WHO ARE
RESPONSIBLE FOR THE PROCUREMENT
AND DECIDING WHAT SOURCES OF
ENERGY THEY'RE THEY'RE GOING TO
USE TO GENERATE THE ELECTRICITY
TO SERVE ALL OF THEIR CUSTOMERS.
SO WE LOOK AT THE PROCUREMENT
ORDERS, INTEGRATED RESOURCE
PLANNING IS WHAT WE CALL IT. AND
ALL OF THE LOAD SERVING ENTITIES
HAVE A PLAN, WITH PARTICULAR
TYPES OF RESOURCES WE USE THAT
TO PUT TOGETHER A TRANSMISSION
PLAN, AND THAT'S OUR
TRANSMISSION PLANNING PROCESS.
WE CALL IT THE TPP. AND AND THAT
GOES TO THE CAISO AND MAYBE A
PRESIDENT. MAINZER, YOU WANT TO
TALK ABOUT YOUR PROCESS. SO OUR
PLAN THAT IS BASED ON THE LOAD
SERVING ENTITIES, INTEGRATED
RESOURCE PLANS OR ERPS, TEARS
INTO, YOU KNOW, EXACTLY WHAT DO
YOU NEED TO SERVE YOUR LOAD THEN
WHAT IS NEEDED IN TERMS OF
TRANSMISSION TO MAKE SURE THAT
LOAD THAT GENERATION CAN GET,
WHERE IT NEEDS TO GO THROUGHOUT
THE SYSTEM EVERY DAY OF THE
YEAR, EVERY HOUR OF THE DAY. AND
THEN THAT GOES TO CAISO FOR
TRANSMISSION PLANNING, RIGHT.
AND TAKING THOSE. SO IF I JUST
PLEASE IF I, IF I COULD, I JUST
WANT TO BE CLEAR YOU IDENTIFY
HOW MUCH LOAD IS NEEDED. YEAH.
IDENTIFY HOW MUCH LOAD IS
NEEDED. AND THEN THE PROCUREMENT
AND THE RESOURCE ADEQUACY
OBLIGATIONS HAPPEN AT THE PUC.
PROCUREMENT OF THE ENERGY, BUT
NOT THE NOT THE GRID PROCUREMENT
ASPECTS. THE PROCUREMENT OF
ENERGY DRIVES WHAT'S NEEDED FOR
THE GRID, FOR THE GRID. SO WHEN
WE LOOK AT COST EFFECTIVENESS,
WE INCLUDE WHAT'S NEEDED FOR THE
GRID TO MAKE THAT GENERATION
WORK FOR THE NEEDS OF THE SYSTEM
AND THE ACTUAL GRID
IMPLEMENTATION GOES TO CAISO.
THAT'S RIGHT. WE TAKE THE CORE
INPUTS FROM THE ENERGY
COMMISSION, THE INTEGRATED
RESOURCE PLANNING FROM THE PUC,
AND THEN OUR TRANSMISSION
PLANNERS IN FOLSOM CONDUCT A
VERY EXHAUSTIVE ANALYSIS TO
FIGURE OUT WHICH COMBINATION OF
TRANSMISSION LINES AND ALSO NON
NON NON TRANSMISSION SOLUTIONS
INCLUDING GRID X GRID ENHANCING
TECHNOLOGIES WILL BEST MEET THE
NEEDS OF THE STATE. MARRIED
TOGETHER WITH OUR WITH THE
RELIABILITY STANDARDS AND AN
ECONOMIC ANALYSIS TO SEE IF
THERE'S ANY OTHER BE RESPECTFUL
TIME WISE. SO JUST ONE OTHER
QUESTION. YOU TALKED ABOUT THE
QUEUING. YES. AND IT'S PROBABLY
THE NUMBER ONE THING THAT I'M
HEARING IS THE QUEUING PROBLEM
AND THE PROBLEM GETTING
CONNECTED. AND THE PROBLEMS, THE
LACK OF FLEXIBILITY IN TERMS OF
BEING ABLE TO CONNECT. PEOPLE
ARE WILLING TO PAY FOR IT
THEMSELVES AND DO IT THEMSELVES,
CAN YOU, CAN YOU ADDRESS THAT
BRIEFLY? IT'S ABSOLUTELY. ARE
YOU GOING AND WHAT WHAT WHAT DO
YOU THINK THE SOLUTION IT'S A
CRITICAL ISSUE. THE FIRST THING
WE'RE TRYING TO DO IS BUY IN.
WHY WE FOCUS SO MUCH ON REALLY
HAVING AN ACTIONABLE, SOLID
TRANSMISSION PLAN. AS WE'RE
SAYING, FOLKS NEED TO QUEUE UP
IN AREAS WHERE THERE'S EITHER
EXISTING TRANSMISSION CAPACITY
OR WHETHER WE'RE PLANNING TO
BUILD IT IN PROJECTS THAT ARE
LINED UP WITH THE PLAN ARE GOING
TO HAVE A BETTER CHANCE OF
GETTING STUDIED AND GETTING
THROUGH THE PROCESS. WE'RE ALSO
MAKING SURE THAT OUR LOAD
SERVING ENTITIES ARE ARE ALSO
EXPRESSING SOME LEVEL OF
INTEREST IN THESE PROJECTS, SO
THAT WE CAN SAY THESE ARE ONES
THAT HAVE SOME POTENTIAL
COMMERCIAL VIABILITY AS WELL. SO
WE'RE USING MORE SORTING
CRITERIA TO DEFINE A SMALLER
SUBSET THAT WILL STUDY AND
EVENTUALLY PASS ON FOR
PROCUREMENT TO THE UTILITIES. SO
AGAIN IT'S ABOUT COORDINATION.
BUT CUTTING DOWN THE TOTAL
NUMBER OF PROJECTS TO A
MANAGEABLE SIZE THAT DOESN'T
HAVE THE PLANNERS AND THE FOLKS
THAT HAVE TO CONSTRUCT PARALYZED
WITH AN OVERSUPPLY OF RESOURCES.
SO LITERALLY JUST DECREASING THE
QUEUE. IT'S PRIORITIZE IT. IT'S
BASICALLY YEAH, I MEAN, AT THE
END OF THE DAY OKAY. YEAH. THANK
YOU. YEAH. THE QUEUE AS MANY
PEOPLE CAN COME INTO THE QUEUE.
BUT WE'RE GOING TO SAY WE'RE
GOING TO USE A MORE STRINGENT
SET OF SORTING CRITERIA THAN WE
HAVE IN THE PAST. THANK YOU VERY
MUCH. ASSEMBLY MEMBER
BAUER-KAHAN. WELL, THAT WAS
PERFECT. ASSEMBLY MEMBER
BENNETT, YOU SET ME RIGHT UP FOR
MY QUESTION. SO I'LL START WITH
JUST ONE QUICK REMARK ON WHAT
OUR VICE CHAIR SAID ABOUT
AFFORDABILITY. I KNOW THIS IS A
RELIABILITY HEARING, NOT AN
AFFORDABILITY HEARING, BUT WE
CAN'T TALK ABOUT ONE WITHOUT THE
OTHER. AS THE PRESIDENT SO APTLY
SAID. AND I DO THINK IT'S REALLY
IMPORTANT THAT WE HIGHLIGHT THAT
THE IOUS COME IN WANTING TO
BUILD INFRASTRUCTURE BECAUSE
THEY WANT A RATE OF RETURN AND
THAT IT IS OUR ROLE AS THE STATE
TO MAKE SURE THAT WE ARE PUTTING
FIRST OUR CONSTITUENTS WHO NEED
RELIABLE ENERGY AT AN AFFORDABLE
COST, AND THAT WE NOT PRIORITIZE
THE RETURN OF THE INVESTMENT OF
THE IOUS, BUT INSTEAD OUR
CONSTITUENTS. AND SO I THINK
THIS PROCESS IS REALLY IMPORTANT
THAT WE'RE TALKING ABOUT THIS
AND ONE OF THE THINGS THAT I
THINK CAME OUT REALLY CLEARLY IN
MR. BENNETT'S QUESTION WAS THE
SILOS. I'VE ALWAYS BEEN
FASCINATED BY THIS SORT OF
SYSTEM THAT EACH OF YOU HAS, BUT
ALL COMES TOGETHER TO CREATE
THIS SYSTEM. AND IF IT REALLY IS
THE MOST EFFICIENT DOING THIS.
AND SO ONE OF THE THINGS I
WANTED TO UNDERSTAND A LITTLE
BETTER IS IN ORDER TO MAKE THESE
DECISIONS AND, VICE CHAIR, YOU
ACTUALLY DID A GOOD JOB OF
HIGHLIGHTING THIS. THERE'S SO
MUCH SILOS, SCIENCE AND
PREDICTION. I IMAGINE THAT GOES
INTO WHAT IS THE FUTURE GOING TO
LOOK LIKE? RIGHT. AND, YOU KNOW,
YOUR RESOURCE ADEQUACY
DETERMINATIONS COMING OUT OF
BOTH OF YOUR SHOPS. AND IT'S AND
ARE ALL OF THOSE DONE
SEPARATELY? DO EACH OF YOU HAVE
DIFFERENT DEPARTMENTS THAT ARE
DOING THESE FORECASTS
SEPARATELY, OR IS IT ALL
HAPPENING TOGETHER. JUST
CURIOUS, BECAUSE IT SEEMS
INEFFICIENT IF EVERYBODY'S DOING
THEIR OWN. YEAH, THANK YOU.
THANK YOU. ASSEMBLY MEMBER, JUST
KIND OF TAKING A CUE FROM,
ASSEMBLY MEMBER BENNETT'S
COMMENTS AT THE VERY TOP. I
THINK THE SPECIFIC ROLE THAT
EACH OF OUR AGENCIES HAVE ARE
VERY DIFFERENT. RIGHT. SO CDC
HAS THE ROLE OF AROUND PLANNING,
PUC HAS MORE REGULATORY. SO THE
COMMISSION ACTUALLY VOTES ON
STUFF, THAT IS VERY DIFFERENT
FROM CDC. SO I THINK IN
DEVELOPING THE STATE AGENCIES,
YOU KNOW, I THINK THE
LEGISLATURE, LEGISLATURE SAU
NEED FOR THAT SEPARATION OF
ROLE. BUT AS ASSEMBLY MEMBER
BENNETT MENTIONED, GIVEN THE
EXTRAORDINARY SITUATION WE ARE
IN RIGHT NOW AND YOU POINTED OUT
WE REALLY NEED TO DE SILO AND
MAKE IT REALLY EFFICIENT, SO
SINCE 2015, THERE HAS BEEN
PROCESSES ON THE DEMAND FORECAST
CALLED THE JOINT AGENCY STEERING
COMMITTEE. THE STAFF MEET EVERY
WEEK. THE JOINT AGENCY STAFF, WE
ALL, KIND OF HELP EACH OTHER ON
DIFFERENT ELEMENTS, C C IS
LARGELY, DEVELOPS THE EMPLOYMENT
NECESSARY PERSONNEL NECESSARY
FOR THE STATISTICAL ANALYSIS OF
THE FORECASTING. BUT PUC STAFF
AND KAISER STAFF ATTEND THOSE
MEETINGS EVERY WEEK WITH CÁC
SHARING. THIS IS WHAT WE'RE
DOING. IS THIS CORRECT? NOT YOU
KNOW, ARE YOUR BACK OF THE
ENVELOPE CALCULATIONS IN PLACE?
SO WE DO THAT AND THAT THEN GOES
TO WHAT WE CALL A PRINCIPLE
LEVEL MEETING. SO WHERE PRESENT
PANELS MYSELF IN A PRESENT
MANGER, WE ALL MEET A QUARTERLY
ONCE AND MAKE SURE THAT WE'RE
ALL ON THE SAME PLACE. BUT WHEN
IT COMES TO, LET'S SAY IRP AND
RESOURCE PLANNING, THE EXPERTISE
LIES WITH PUC. AND SO WE HAND
OFF THE DEMAND FORECASTING TO
THE EXTENT WE CAN SUPPORT THAT
WITH THE FOR EXAMPLE, PUC STAFF
MIGHT SAY, YOU KNOW WHAT THE
FORECASTING WE WOULD LIKE TO
INCORPORATE THESE ADDITIONAL
VARIABLES. CAN YOU DO THAT. AND
THEN WE DO THAT AND SHARE IT
WITH THEM. AND THEY HAVE THE
EXPERTISE TO SPECIFICALLY RUN
THE RESOURCE PLANNING MODELS.
AND I'LL ADD I MEAN FIRST OF
ALL, IT REFLECT ON THE FACT THAT
IT IS COMPLICATED AND, AND BUT
WE ALSO HAVE DIFFERENT AREAS OF
SPECIALTY TÊ. AND SO AS THE VICE
CHAIR NOTED, THE PUC IS THE
REGULATOR, MEANING THAT WE ISSUE
A PRESCRIPTIVE ORDERS,
ENFORCEABLE ORDERS TO, THE IOUS
IN PARTICULAR, BUT ALSO DO THE
PLANNING PROCESS FOR ALL OF THE
LOAD SERVING ENTITIES, INCLUDING
CAS, WHO ARE MORE AND MORE
SERVING CUSTOMERS IN CALIFORNIA,
EVEN IF THEY'RE USING THE
DISTRIBUTED SYSTEM AND
TRANSMISSION SYSTEM OF THE IOUS.
SO THEY'RE MAKING THE DECISIONS
ABOUT WHAT SOURCES OF GENERATION
SERVE THEIR CUSTOMERS WITHIN IOU
TERRITORY. AND WE NEED TO MAKE
SURE THE PLANNING IS DONE SO
THAT ALL OF THE 43 PLUS LOAD
SERVING ENTITIES HAVE THEIR
SHARE OF THE LOAD FORECAST THAT
CEC DOES, BUT THEN ALSO IS
COORDINATED AMONG ALL 40 PLUS OF
THEM. AND THAT THEY KNOW WHAT
THEY NEED TO DO TO MAKE THE
SYSTEM RELIABLE AS A WHOLE AND
OF COURSE, THE COST EFFECTIVE
WAY. AND THEN WE'RE ITERATING ON
THAT. SO WE LOOK AT EACH YEAR
AND THEN WE DO TEN YEAR
PLANNING. AND WE'RE STARTING TO
EVEN LOOK AHEAD TO 2045. AND SO
IN THAT WAY IT'S THE IT'S A LOAD
SERVING ENTITIES THAT ARE
DRIVING THE GENERATION. WE
EXPECT THE UTILITIES WHO RUN THE
DISTRIBUTION AND TRANSMISSION
SYSTEM TO SUPPORT THAT. WE ALSO
HAVE PRIVATE TRANSMISSION
DEVELOPERS AS WELL NOW. AND SO
THOSE THOSE DEVELOPERS NEED TO
SUPPORT THE GENERATION DECISIONS
THAT ARE MADE BY THE LOAD
SERVING ENTITIES. AND WE NEED TO
MAKE SURE THAT WE'RE BUILDING
AHEAD OF TIME SO THAT WE'RE
READY, BUT ALSO NOT OVERBUILDING
BECAUSE THAT'S VERY EXPENSIVE.
WE DON'T WANT TRANSMISSION, WE
DON'T NEED WE DON'T WANT
GENERATION WE DON'T NEED, BUT WE
WANT TO BE READY, AND WE WANT TO
BE READY FOR ANY CONDITION, SO
THAT'S A LITTLE BIT ABOUT THE
WHY AS WELL AS THE HOW. YEAH. I
MEAN, I THINK THAT WHAT I'M
TRYING TO GET AT IS THAT I THINK
THAT AS WE DO DEMAND
FORECASTING, RESOURCE ADEQUACY,
IT ALL IS BEING INFORMED BY
FORECASTING AND PREDICTIONS OF
THE FUTURE. AND YOU HAVE
DIFFERENT ROLES WITHIN THAT. BUT
I GUESS WHAT I, I THINK THE
EFFICIENCY WOULD COME. AND IT
SOUNDS LIKE MAYBE THIS IS
HAPPENING FROM WHAT THE VICE
CHAIR SAID THROUGH THOSE
MEETINGS, YOU MENTIONED OF
EVERYONE WORKING OFF OF THE SAME
SET OF DATA RATHER THAN HAVING
THREE DIFFERENT ENTITIES THAT
ARE DECIDING THE FORECASTS ARE
ALL OVER THE MAP AS SCIENTISTS.
SO IT ALLOWS US TO DEVELOP
SPECIALTIES BUT ALSO COORDINATE
WITH EACH OTHER. RIGHT. OKAY.
THANK YOU, MEMBER FRIEDMAN,
THANK YOU. JUST A COUPLE OF
QUESTIONS AND ALONG THE SAME
LINES. SO I JUST I AM STILL
TRYING TO UNDERSTAND HOW IS IT
THAT YOU HAD THE, THE CUP HAD
SAID THAT ALL OF THE LOAD
SERVING ENTITIES HAD MET THEIR
RESOURCE ADEQUACY REQUIREMENTS,
AND YET PUC STILL ORDERED THIS
ADDITIONAL PROCUREMENT. SO HOW
DOES THAT HAPPEN? AND, YOU KNOW,
HOW HOW DO WE MAKE SURE THEN
THAT WE ARE NOT SORT OF OVER
OVER WORRYING, OVER FORECASTING,
SPENDING A LOT OF RATEPAYER
MONEY ORDERING THIS EXTRA
PROCUREMENT THAT WE THEN DON'T
NEED. SO WHAT ARE THOSE CHECKS
AND BALANCES IN THAT, SO
PROCUREMENT, THE PROCUREMENT
ORDERS ARE DRIVING THE BUILD THE
PROJECTS. AND SO LOOKING AHEAD
AT WHAT PROJECTS WE'RE GOING TO
NEED FOR THE FUTURE, FOR
RELIABILITY AND FOR GREENHOUSE
GAS EMISSION REDUCTION. SO
REDUCING THE USE OF GAS AND
REALLY TARGETED TOWARD REDUCING
THE USE OF GAS ON THE SYSTEM.
THOSE ORDERS TELL THE LOAD
SERVING ENTITIES, HERE'S WHAT
YOU NEED TO BUILD IN THE FUTURE.
AND THEY CONTRACT FOR THAT. IN
THE NEAR TERM THOUGH, WE HAVE
RESOURCE ADEQUACY REQUIREMENTS,
WHICH IS ESSENTIALLY IS THAT
ENERGY. DO WE HAVE THE AVAILABLE
CAPACITY? SO IS THE ENERGY GOING
TO SHOW UP WHEN WE NEED IT TO
SERVE LOAD. AND SO WE REQUIRE
ALL OF THE LOAD SERVING ENTITIES
TO LOOK AT THE WORST DAY OF EACH
MONTH AND CONTRACT FOR FERM
CAPACITY FOR THOSE MONTHS SO
THAT WE KNOW THAT THE RESOURCES
WILL BE BID INTO THE MARKET.
THEY'LL BE AVAILABLE WHEN WE
NEED THEM. SO IT'S ALMOST LIKE A
LAYER ON TOP, A RELIABILITY K¾T
LAYER CAPACITY LAYER ON TOP OF
THE PROCUREMENT ORDERS THAT
REALLY ARE FOR THE PROJECTS. AND
WHEN THE PROCUREMENT ORDERS ARE
MET WITH PROJECTS THAT COME
ONLINE, THEN WE DO HAVE MORE
AVAILABLE RESOURCE ADEQUACY
BECAUSE THOSE PROJECTS ARE THERE
TO PROVIDE CAPACITY WHEN WE NEED
IT. SO IF I READ THE REPORT
CORRECTLY, THERE WAS ABOUT A
GIGAWATT OF EXTRA PROCUREMENT
THAT WASN'T NECESSARY, DID I,
DID I READ THAT CORRECTLY OR.
YEAH, I THINK SO. IN TERMS OF
THE AUTHORIZATION OF THE
PROCUREMENT, CURRENTLY. SO, JUST
TO ADD TO WHAT PRESIDENT
REYNOLDS MENTIONED, ONE OF THE
COMMON THINGS THAT ALL THREE
AGENCIES DO IN UNDERSTANDING HOW
MANY RESOURCES WE MIGHT NEED, IS
THIS STOCHASTIC ANALYSIS CALLED
THE 1 IN 10 LOSS OF LOAD
EXPECTATION. SO THIS IS TAKING
INTO ACCOUNT THE VARIABILITY OF
GENERATION AND THE VARIABILITY
OF DEMAND, AND TRYING TO DO AN
ANALYSIS, STATISTICAL ANALYSIS
SAYING FOR US TO NOT HAVE MORE
THAN ONE OUTAGE IN TEN YEARS,
HOW MUCH DO WE HAVE TO BUILD. SO
THAT IS A COMMON PLATFORM. WE
ALL USE TO KIND OF GUESS KIND OF
WHAT LEVEL OF RESOURCES WE NEED.
BèC GIVEN THAT THE VARIABILITY
IN THAT IN THE EXTREME WEATHER
EVENTS CURRENTLY HAS AUTHORIZED
PROCUREMENT THAT IS IN ADDITION
TO THAT 1 IN 10 LEVELS TO FUTURE
PROOF SOME OF THAT, BUT NOT ALL
OF THOSE RESOURCES WILL BE
CONTRACTED FOR DAY TO DAY. OKAY.
LET ME SWITCH GEARS. SO ASSEMBLY
MEMBER BENNETT AND ASSEMBLY
MEMBER TING AND MYSELF HAD BEEN
INVOLVED IN SOME BUDGET
DISCUSSIONS IN THE LAST FEW
YEARS ON DISTRIBUTED ENERGY
FUNDING APPROPRIATIONS TO
ADDRESS RELIABILITY. BUT I
UNDERSTOOD FROM MY OWN AB 2891
THIS YEAR THAT NOT ALL STATE
FUNDED AND RATEPAYER FUNDED
PROGRAMS ARE ABLE TO HELP LOWER
OUR RA NEEDS TO AND AVOID
EXPENSIVE WHOLESALE POWER
PURCHASES. IT WOULD BE REALLY
UNFORTUNATE FOR I THINK YOU
WOULD AGREE, FOR THE STATE TO
FUND THESE INCENTIVE PROGRAMS,
BUT WE DON'T ACTUALLY HARNESS
THE RESOURCES TO HELP REDUCE THE
COSTS THAT ARE ASSOCIATED WITH
OUR RELIABILITY NEEDS. SO I'M
WONDERING IF YOU CAN ELABORATE
ON AND EXPLAIN HOW WE CAN BETTER
ALIGN OUR DIR PROGRAM, TO REDUCE
CUSTOMER COST IMPACT FROM THOSE
INCREASING RA PRICES? YEAH,
ABSOLUTELY. I'LL START AND THEN
PASS IT TO PRESIDENT REYNOLDS, I
THINK, ASSEMBLY MEMBER, IF WE GO
BACK TO 2020 AND COMING OUT OF
2020 AND REALLY LOOKING AT 2021
AND IN THESE OVERSIGHT HEARINGS,
AND WE WHEN WE DISCUSSED WHERE
ARE THE RELIABILITY PROBLEMS
COMING FROM? THE RELIABILITY
PROBLEMS WERE NOT JUST COMING
FROM EXTREME EVENTS. WE WERE
ALSO TALKING ABOUT THE DELAYS IN
POTENTIAL PROCUREMENT COMING
FROM THE LACK OF UPDATES FROM
THE FORECASTING STANDPOINT IN,
YOU KNOW, INCORPORATING THOSE
CLIMATE CHANGE EVENTS AND THEN
WE ALSO TALKED ABOUT THE SUPPLY
DISRUPTIONS AND INABILITY TO
BUILD. SO ALL THOSE ISSUES WERE
STACKING UP. SO IF YOU LOOK AT
THE LAST THREE YEARS VERSUS
WHERE WE ARE AND WHERE WE ARE
GOING FORWARD, THE LAST THREE
YEARS, WE WERE DIGGING OURSELVES
OUT OF A LOT OF DIFFERENT HOLES,
SO WE NEEDED ALL OF RA, WE
NEEDED EVERY RESOURCE WE NEED
AND WE NEEDED TO BUILD. BUT
MOVING FORWARD, WHAT YOU WILL
SEE FROM THE REST OF THE
PRESENTATION IS WE ARE COMING TO
A GOOD EQUILIBRIUM. NEW
EQUILIBRIUM, WHERE WE WILL BE
ABLE TO OPTIMIZE THE RESOURCE
BUILD TO MEET THE PLANNING
STANDARDS AND THE NON RATEPAYER
FUNDED PROJECTS THAT YOU GAVE US
WILL BE REALLY UTILIZED, TO
AUGMENT THE RESOURCE PLANNING.
AND I GUESS I'LL ALSO ADD THAT
WE THINK ABOUT DIFFERENT TYPES
OF TOOLS. SO RESOURCE ADEQUACY
IS FOR NORMAL PLANNING
STANDARDS. WE ALSO, ESPECIALLY
FROM 2022, HAVE LEARNED THAT WE
NEED TO PLAN FOR EXTREME EVENTS.
WE NEED TO BE READY. AND SO
WE'VE DEVELOPED CONTINGENCY
MEASURES WHICH ARE NOT AS AS
WHICH ARE AVAILABLE FOR
EMERGENCIES. THEY'RE NOT
SUPPOSED TO BE AVAILABLE ON
REGULAR DAYS. WE DON'T PAY FOR
THEM TO BE AVAILABLE THROUGHOUT
THE YEAR, EVERY MONTH, BUT
THEY'RE AVAILABLE ON FOR
EMERGENCIES. SOME OF THESE ARE
EVEN PAY FOR PERFORMANCE, SO WE
ONLY PAY IF WE USE THEM. OTHERS
ARE WE PAY IN ADVANCE, BUT WE
KNOW THEY'RE THERE FOR AND WE
ONLY USE THEM FOR EMERGENCIES.
AND THAT'S A WAY OF NOT
OVERPAYING. I GUESS, TO HAVE
RESOURCES SITTING AROUND. SO
KIND OF WE THINK ABOUT SOME OF
THE STATE RESOURCES. WE'RE IN
THAT LATTER CATEGORY OF THE
CONTINGENCY RESOURCES. AND WE'LL
BE TALKING A LITTLE BIT MORE
ABOUT THAT LATER IN THE
PRESENTATION. I'M WONDERING JUST
BRIEFLY, AND IF YOU'RE GOING TO
BE TALKING ABOUT THIS LATER IN
THE PRESENTATION, YOU CAN JUST
TELL ME THAT AND WE CAN MOVE ON.
BUT I'M, YOU KNOW, OF COURSE,
VERY GRATIFIED TO HEAR ABOUT THE
LONG TERM IRP PROCUREMENT
ACTIVITIES TO BRING ON MORE
RENEWABLES. AND, YOU KNOW, WE'RE
REALLY THRILLED WITH THE
PROGRESS ON THAT. AND I'M
WONDERING HOW THAT STACKS UP TO
THE LONG TERM RFPS, PROCUREMENT
ACTIVITIES AND WHETHER THERE'S A
TARGET DATE PLAN FOR CPCS TO
INTEGRATE THE TWO PLANS
TOGETHER. THE IRP AND THE RFPS.
AND YOU KNOW, SO THAT WE SORT OF
COORDINATE THEM FOR OUR LONG
TERM DECARBONIZATION GOALS.
YEAH, THAT'S A GREAT QUESTION.
THAT'S ABSOLUTELY HOW WE THINK
ABOUT IT AS COORDINATED. SO THE
LOAD SERVING ENTITIES HAVE THEIR
IRP REQUIREMENTS WHICH HAVE
CERTAIN ELIGIBLE RESOURCES. AND
THEN WE APPLY THE GHG STANDARD.
SO IT'S A LARGER GROUP OF
RESOURCES THAT WOULD QUALIFY FOR
THE IRP COMPLIANCE. BUT THEY'RE
THEY'RE INTEGRATED. SO THE LZS
AT THE SAME TIME THEY'RE MEETING
IRP PROCUREMENT REQUIREMENTS.
THEY'RE ALSO MEETING RPS. SO
THEY JUST HAVE TO MAKE SURE THAT
THEY'RE DOING BOTH. AND WE'RE
CHECKING BOTH AS THEY GO. BUT
THEY COMPLEMENT EACH OTHER. AND
THEY'RE TWO DIFFERENT STATE
POLICIES THAT WE'RE IMPLEMENTING
TOGETHER OKAY OKAY. THANK YOU.
AND SO IS THERE A TARGET DATE TO
KIND OF I MEAN IS IT WELL THE
TARGET THE LATEST TARGET ON OUR
RPS IS 60% BY 2030. AND SO ONCE
WE GET TO 2030 RPS, THE FINAL
TARGET WILL BE REACHED. AND WE
HAVE IRP THAT'S GOING BEYOND OUT
TO 2045 CONCURRENTLY WITH THE
SCOPING PLAN. THANK YOU.
ASSEMBLY MEMBER WOULD. THANK
YOU. CHAIR. A COUPLE QUESTIONS.
I HEARD MR. MR. GUNDA, YOU
TALKED ABOUT AS WE GET INTO
THESE EXTREME WEATHER EVENTS AND
PREDICTING THEM, YOU SOMETIMES
NEED A COUPLE OF DAYS TO BRING
UP CERTAIN KINDS. WHAT KIND OF
POWER ARE YOU TALKING ABOUT THAT
YOU NEED A COUPLE OF DAYS TO
BRING ONLINE? YES. SO, WHEN WE
TALK ABOUT THE DIFFERENT
RESOURCES AS WE HAVE IN OUR
STACK TODAY, THE ONCE THROUGH
COOLING POWER PLANTS, FOR
EXAMPLE, THAT THE NATURAL GAS
POWER PLANTS THAT HAVE BEEN
MOVED INTO THE STRATEGIC RESERVE
, THAT WOULD REQUIRE US TO HAVE
AT LEAST A COUPLE OF HEADS UP, A
COUPLE OF DAYS OF HEADS UP THAT
THE HEAT WAVE IS COMING. SO IT
CAN BE WARMED UP TO HELP WITH
THE EVENT, LIKE PEAKER PLANTS.
YEAH, KIND OF THING. I MEAN,
THIS IS NOT A PEAKER PLANT. THIS
IS LARGER THAN A PEAKER PLANT
THAT THAT WOULD NEED SOME WARM
UP TIME. AND I WOULD REQUEST,
YOU KNOW, DIRECTOR HÌ TO JUST
ADD ON TO THAT. SURE. I ALSO
WANTED TO ADD, IN ADDITION TO
THOSE PLANTS, JUST REPRESENTING
THE, MY STATE WATER PROJECT
COLLEAGUES AND MAYBE OTHER WATER
AGENCIES IS THAT, YOU KNOW,
WATER, IT'S AN INTEGRAL PART AND
HAS TOUCHES UPON ELECTRICITY A
LOT, BUT OBVIOUSLY FOR THE WATER
AGENCIES IT SERVES A DIFFERENT
PURPOSE. BUT THERE ARE TIMES
DURING EMERGENCY ON THE
ELECTRICITY SIDE THAT THE WATER
AGENCIES HAVE SOME CAPABILITY TO
HELP WITH ELECTRICITY. FOR
EXAMPLE, REDUCING PUMPING LOAD
IF THEY CAN. HOWEVER, BECAUSE
WATER MOVES AND HAS TO BE MOVED
PHYSICALLY FROM ONE PLACE TO
ANOTHER, IT ACTUALLY DOES
REQUIRE MULTIPLE DAYS TO LET THE
OPERATORS KNOW THAT THE PUMPING
NEEDS TO BE REDUCED, YOU KNOW, X
NUMBER OF DAYS DOWN THE ROAD. SO
THOSE ARE SOME OF THE REASONS
WHY, FOR A SLOWER MOVING EVENT,
WE DO NEED THOSE EXTRA DAYS TO
COORDINATE WITH THE APPROPRIATE
ENTITIES FOR RESPONSE IF THEY
HAVE IT. YEAH. AND REMEMBER
WE'RE JUST KIND OF IN CONTRAST
TO THAT, LIKE AN EVENT ON JULY
19TH, 2021, WE HAD THE FIRE
KNOCK OUT THE TRANSMISSION
LINES. IT'S ALMOST IMPOSSIBLE TO
GET AN OTC POWER PLANT TO REACT
IN THAT MOMENT. YEAH, OKAY. SO
AND FOLLOWING UP ON ON YOUR
PROCESS FOR OBVIOUSLY YOU HAVE
THE DEMAND FORECAST AND THE IRP
AND THEN AND THEN ALSO, DOES
THEIR PLANNING AS WELL, I'VE
NOTICED IN SOME OF THE
SITUATIONS WHERE YOU, THE CEC
FORECAST SOMETHING, I, THE PUC
COMES UP WITH ANOTHER NUMBER AND
THEN YOU COME UP WITH A THIRD
NUMBER, WITH MR. MANZULLO AND
THAT SOMETIMES THAT'S LOWER, AND
THAT CREATES CONCERN AMONG,
AMONG SOME ENTITIES OUT THERE
THAT ARE LOOKING TO, INVEST IN,
IN GREEN ENERGY. SO HOW OFTEN
DOES THAT HAPPEN? WHERE, WHERE
THE FORECAST AND THE IRP THEN
LEAD TO CAISO DOWNGRADING, SORT
OF, SO TO SPEAK, THE HOW, HOW
WE'RE GOING TO BUILD OUT FOR
THAT CAPACITY. YOU KNOW, I THINK
ONE THING JUST IT'S ALWAYS
IMPORTANT TO UNDERSTAND THAT
SOMETIMES, PARTICULARLY THE
ENERGY COMMISSION WILL BE
LOOKING AT THE ENTIRE STATE OF
CALIFORNIA. AND BECAUSE WE ONLY
REPRESENT 80% OF THE STATE,
THERE WILL BE SOMETIMES JUST AN
INHERENT DIFFERENCE THERE. BUT
USUALLY, I WOULD SAY WHEN WE'RE
LOOKING AT THE COMMON FOOTPRINT,
WE'RE WORKING PRETTY HARD. AND I
THINK FAIRLY SUCCESSFULLY TO
HAVE COMMON ASSUMPTIONS AND
COMMON STANDARDS. YOU'LL HEAR
WHEN WE WHEN WE TURN TO 2024, WE
ARE USING THAT INDUSTRY
STANDARD, 1 IN 10 LOSS OF LOAD
EXPECTATION. AND WE WORK VERY
CLOSELY WITH THE COMMISSION AND
WITH THE PUC TO HARMONIZE THOSE
NUMBERS. SO HONESTLY, I MAYBE IF
YOU HAVE ANY OTHER SPECIFIC
EXAMPLES, BUT I THINK GENERALLY
THERE'S PRETTY GOOD CONSISTENCY
BETWEEN OUR RELIABILITY
ASSESSMENTS AT THIS POINT. WELL,
I THINK RECENTLY THERE WAS SOME
RELATED TO OFFSHORE WIND
PLANNING THAT SOME NUMBERS THAT
CAME OUT AND THEN AND THEN YOUR
NUMBERS DOWNGRADE DID THE WHAT
WOULD BE BUILT OUT. SO JUST IF
IT'S IF I WOULD SAY THAT, YOU
KNOW, WE ARE YOU KNOW, THERE ARE
SOME VERY, YOU KNOW, THE LONGEST
STATED SORT OF ASPIRATIONAL
NUMBERS FOR OFFSHORE WIND ARE
LARGE NUMBERS. YOU KNOW, NORTH
OF 20,000MW. I THINK FOR THIS
PARTICULAR ROUND OF TRANSMISSION
PLANNING, BASED OFF THE PUC
ASSESSMENT, WE'VE ELECTED TO
LOOK AT A SMALLER SLICE, FOR
STARTERS. SO THAT'S THE 4000MW.
BUT IT'S NOT REALLY A DISCONNECT
OR A DOWNGRADING. IT'S JUST
THAT'S WHAT WE'VE BEEN ASKED TO
STUDY AT THIS POINT IN THE
PLANNING CYCLE. SO AND THAT KIND
OF TAKES ME TO THE AND THANK YOU
FOR THAT. THAT KIND OF TAKES ME
TO THE CONCERNS THAT WE HAVE. AS
YOU LOOK AT OUR GOALS, CPUC
CALLED, WELL, BETWEEN 21 AND 23
PROCUREMENT OF 3.3GW, 20, 3 TO
26, WE'RE LOOKING AT 11.5, THEN
RECENTLY CPC CALLED FOR AN
ADDITIONAL FOUR GIGAWATTS TO
COME ONLINE. SO THAT'S ABOUT
SEVEN GIGAWATTS PER YEAR, AND
DOES THE GRID HAVE CAPACITY FOR
ADDING AT THIS LEVEL? BECAUSE
WHEN YOU LOOK FURTHER OUT TO
2030, I THINK IT'S 2035. WE'RE
LOOKING AT 56GW. WHERE IS THE
CAPACITY FOR THAT, YEAH. THIS
THIS REALLY GETS BACK TO MY
PREVIOUS POINT, WHICH IS THAT AT
THIS POINT, YOU KNOW, WE ARE
STILL LARGELY, YOU KNOW, WE'RE
WE'VE AWARDED QUITE A BIT OF
TRANSMISSION CAPACITY GOING
FORWARD. THAT SHOULD BE THAT WE
SHOULD BE ABLE TO SERVE FOR THE
NEXT SEVERAL YEARS. BUT WE
REALLY DO NEED TO BE ABLE TO GET
AFTER THE NEXT ROUND OF
TRANSMISSION CONSTRUCTION WITH
WITH CONSIDERABLE ALACRITY. SO
IT'S BREAKING DOWN THOSE
BARRIERS, GETTING THE PLANNING
RIGHT, GETTING THE PERMITTING,
GETTING THE SITING, GETTING THE
CAPITALIZATION, GETTING THE
CONSTRUCTION THÀNH SO THAT THE
NEXT MAJOR TRANCHE OF
TRANSMISSION CAPACITY, TÊ, WILL
BE AVAILABLE. AND THAT'S A
REALLY URGENT ISSUE HERE IN
CALIFORNIA. WELL, IT IS AN
URGENT ISSUE. AND I KEEP ASKING
QUESTIONS ABOUT THAT OVER, OVER,
OVER TIME BECAUSE WE HEAR FROM
CERTAINLY FROM INDUSTRY, I'VE
SEEN SOME CHARTS THAT SAY FROM
BEGINNING TO END TO, TO
CONSTRUCTION, WE'RE LOOKING AT
UP TO UP TO 12 YEARS. THIS IS
2024. AND IF WE'RE LOOKING AT 56
GIGABYTE GIGAWATTS, EXCUSE ME,
GIGAWATTS BY 2036, YOU KNOW,
THAT'S THAT'S 12 YEARS. AND OUR
GOAL IS, IS 2030 IS IN THAT IN
THAT TIME FRAME, YOU TALKED
ABOUT THAT. IT'S AN EXQUISITE
EXERCISE TO COME UP WITH THE
PLANNING. YOU KNOW, I'VE BEEN
ASKING THESE KINDS OF QUESTIONS
FOR A COUPLE OF YEARS NOW, AS TO
HOW WE ARE GOING TO GET THERE.
TRANSMISSION. I THINK WE EVEN
HEARD A COUPLE OF YEARS AGO THAT
THERE ARE GREEN ENERGY RESOURCES
THAT CANNOT BE ONBOARDED BECAUSE
OF OUR CHALLENGES WITH OUR GRID,
AND SO WE'VE ALSO HEARD SOMEBODY
I THINK IT WAS YOU, SIR, SAID
THAT WE'RE CONCERNED ABOUT
POTENTIAL OVERSUPPLY OF
RESOURCES. OR MAYBE IT WAS THE
PRESIDENT REYNOLDS, AN
OVERSUPPLY OF RESOURCES. WHEN IS
THAT EVER HAPPENED? AND, AND
HAVE WE EVER OVERBUILT
TRANSMISSION ANYWHERE, IN IN OUR
WORLD BECAUSE I IF WE HAVE I'M
NOT AWARE OF IT. SO, GO AHEAD.
WELL IN THE PAST WE HAVE THE PUC
HAS BEEN CRITICIZED IN PAST
YEARS FOR ALLOWING TOO MUCH, TOO
MUCH, TOO MUCH GENERATION, TOO
MUCH TRANSMISSION. BUT IF WE
HAVE THESE GOALS, IF WE HAVE
THESE GOALS THAT WE'RE SUPPOSED
TO BE MOVING TOWARD AS PER
LEGISLATIVE MANDATES, RIGHT? I
HOW DO WE GET THERE WITH THE
TIME FRAMES IS WHAT I'M GETTING
AT. YEAH. AND GIVEN THE
CONDITIONS THAT WE'VE SEEN IN
THE PAST FEW YEARS, WE'VE
REALIZED THAT WE DO NEED TO
BUILD AND THAT WHAT WE HAVE NOW
IS NOT GOING TO BE SUFFICIENT
FOR WHERE WE EXPECT TO BE IN
2045 AND WHERE WE HOPE TO BE
GIVEN TRANS TRANSPORTATION,
ELECTRIFICATION AND BUILDING
ELECTRIFICATION AND THE NEED FOR
ELECTRICITY SUPPLY. ONE THING I
WANT TO NOTE IS THAT FIRST, THE
TOTAL PROCUREMENT NUMBERS, THESE
ARE BIG NUMBERS AND YOU KIND OF
THINK BIG PROJECTS, BUT IT'S
ACTUALLY A COMBINATION OF MANY
SMALLER PROJECTS. SO THERE ARE
HUNDREDS OF PROJECTS THAT WE
EXPECT TO MAKE UP THOSE NUMBERS.
AND SOME OF THEM MIGHT REQUIRE A
SUBSTATION UPGRADE, SOME OF THEM
MIGHT REQUIRE SOME ENHANCED GRID
TECHNOLOGIES, AND THEN SOME,
LIKE OFFSHORE WIND IN THE NORTH
COAST, LIKELY REQUIRES NEW
TRANSMISSION. AND SO ONE ELEMENT
THAT WE HAVEN'T TALKED ABOUT IS
IN THE TRANSMISSION PLANNING
PROCESS. THE PUC SENDS OVER A
BASE CASE FOR TRANSMISSION
PLANNING AND A SENSITIVITY CASE.
THE BASE CASE HAS THE NUMBERS
THAT ARE ACTIONABLE BASED ON
LOAD SERVING ENTITY IRP PLANS
THAT NEED TO BE STUDIED BY
CAISO, AND TRANSMISSION NEEDS TO
BE READY AND IN MOTION IN
SENSITIVITY. CASE ALLOWS STUDIES
TO HAPPEN, COSTS TO BE MORE
ACCURATELY DEFINED AND THEN IT
CAN FEED BACK INTO OUR IRP
PROCESS, TO GO THROUGH THE NEXT
CYCLE. SO IT ALLOWS US TO LOOK
AHEAD. THE SENSITIVITY CASE
USUALLY INCLUDES A PRETTY BIG
NUMBER, AND IT ALLOWS CAISO TO
BE CREATIVE ABOUT WHAT MIGHT
HAPPEN, WHAT WE MIGHT NEED, AND
STUDY THAT IN WITH MORE DETAIL
AND SEND IT BACK TO THE PUC FOR
US. THEN TO INCORPORATE THOSE
COSTS AND SEE WHAT POPS UP IN
TERMS OF COST EFFECTIVENESS. SO
NOTING THAT THIS IS THIS HEARING
IS REALLY ABOUT RELIABILITY. AND
I'M GOING TO BRING IT BACK TO
THAT, AS WE CONTINUE TO ADD
RESOURCES TO THE GRID, AND
NOTING THAT I DON'T KNOW WHERE
WE ARE IN THE QUEUE AS FAR AS
WHAT TRANSMISSION OAN IS COMING
UP, AND MAYBE THAT'S SOMETHING
THAT COULD BE OFFERED AS
INFORMATION FROM YOU GUYS SO WE
CAN KNOW HOW MUCH TRANSMISSION
CAPACITY IS COMING FORWARD, WHAT
THOSE PROJECTS ARE, WHERE THOSE
PROJECTS ARE. THAT WOULD BE
HELPFUL. BUT BUT AS YOU
CONTINUALLY ADDING RESOURCES IS
AT SOME POINT IS THE WHOLE THING
JUST GOING TO GO POOF? I MEAN, I
MEAN, OR DO WE ACTUALLY HAVE THE
GRID RELIABILITY TO SUSTAIN THE
CONTINUAL ADDITION OF RESOURCES?
AND IF NOT, OR IF WE DO, THEN
CAN YOU SHOW US A BIGGER PLAN ON
HOW THAT'S GOING TO WORK,
PLEASE? I APPRECIATE THE LINE OF
QUESTIONING. I WOULD AND I'D
LIKE TO JUST GIVE YOU A COUPLE
OF REALLY TANGIBLE EXAMPLES THAT
I DO THINK REFLECTIVE, BECAUSE
ALL OF US I MEAN, WE SPEND A LOT
OF TIME ON THIS SPECIFIC ISSUE.
SO FIRST OF ALL, IN 2022, AFTER
TAKING AFTER SIGNIFICANT EFFORT
WITH THE ENERGY COMMISSION AND
THE PUC AND OTHER ENTITIES IN
CALIFORNIA, WE PRODUCED A 20
YEAR ROADMAP OF THE CALIFORNIA
TRANSMISSION PLAN. IF YOU DON'T
HAVE A COPY OF THAT, I'M GOING
TO MAKE SURE YOU'VE GOT A COPY
OF THAT. RIGHT. THAT WAS OUR
OPPORTUNITY TO SORT OF STEP BACK
AND TAKE A LOOK AT THE BIG
ARCHITECTURE OF CALIFORNIA
ONSHORE, OFFSHORE, INTO OUT OF
STATE. WHAT'S THE SORT OF MASTER
PLAN? RIGHT. WE THEN LAST YEAR
HAD ABOUT 45 TRANSMISSION
PROJECTS APPROVED BY OUR BOARD
OF GOVERNORS, ABOUT $7 BILLION
WORTH OF TRANSMISSION
INVESTMENT, WHICH WAS AGAIN A
FUNCTION OF A TEN YEAR PLANNING
PROCESS WITH WITH THE STATE
AGENCIES AND THE UTILITIES AND
THE OTHER STAKEHOLDERS IN THE
STATE. AND THAT PLAN, WE'RE NOW
IN THE PROCESS OF BEGINNING TO
AWARD CONTRACTS TO BUILD SOME OF
THAT INFRASTRUCTURE, AND IT'S
NOW WORKING ITS WAY TO THE
CAPITALIZATION AND FINANCING,
PERMITTING, SITING, STRUCTURE.
AND THOSE ARE THE NEXT
GENERATION OF TRANSMISSION
PROJECTS WHICH NEED TO GET BUILT
SO THAT THE NEXT GENERATION OF
PROCUREMENT CAN BE SUCCESSFULLY,
COMMERCIALLY CONSUMMATED AND
THEN BROUGHT ONLINE ONTO THE
SYSTEM. AND MY EMPHASIS ON
GETTING AHEAD OF THE CURVE AND
MAKING SURE THAT THE
TRANSMISSION IS PLANNED AND THEN
BUILT, CONSTRUCTED AND
ENERGIZED, AND THAT THE QUEUING
PROCESSES AND THE PROCUREMENT
PROCESSES ARE ALIGNED WITH THE
TRANSMISSION PLAN, IS AN
ESSENTIAL PART OF OUR SHARED
STRATEGY AND HAPPY TO DISCUSS
THAT WITH YOU IN GREATER DETAIL
OFFLINE IF NECESSARY. BUT THE
PLAN WE'RE JUST IN THIS MONTH,
JUST IN TWO WEEKS, WE'LL BE
TAKING THE NEXT TRANCHE OF TEN
YEAR TRANSMISSION PLANNING TO
OUR BOARD OF GOVERNORS FOR
ANOTHER ROUND OF APPROVAL. AND
THAT WILL BE A SUBSEQUENT ROUND
OF INVESTMENT TO FURTHER MAKE
SURE AS YOU AS YOUR QUESTION
INDICATES, THAT THE GRID HAS THE
TRANSMISSION CAPACITY TO ON
BOARD RESOURCES FOR YEARS TO
COME. AND THEN THE FINAL KIND OF
THE FINAL CUT, I MEAN, I'D HEARD
, HAVE WE EVER OVERBUILT
TRANSMISSION LINE? I MEAN,
CONSIDERING THE HOW WE ARE
PUSHING EVERYONE TOWARDS
ELECTRIFICATION AND I HEAR IT,
BUT I HEAR CONCERN THAT WE'RE
WORRIED ABOUT OVERBUILDING.
WE'RE OVER PROCURING. HAVE WE
EVER OVERBUILT TRANSMISSION? IN
THE 1930S, WE BUILT A LOT OF
TRANSMISSION. OKAY. WE ARE NOT
IN THE 1930S, 1930S. SO THERE
WAS A PERIOD OF TIME WHEN WE
BUILT A LOT OF TRANSMISSION.
WE'RE STILL LIVING OFF OF THE
TRANSMISSION OUR PREDECESSORS
BUILT. THAT'S WHY EVERYBODY IS
TODAY SAYING IT'S SO IMPORTANT
TO BUILD TRANSMISSION. YOU WANT
TO RIGHTSIZE IT? I WANT TO
EMPHASIZE AND I KNOW THE
AFFORDABILITY QUESTIONS. WE
UNDERSTAND THAT WE'RE ACUTELY
SENSITIVE TO THAT. AND WE DO
EVERYTHING WE CAN WHEN WE DO OUR
TRANSMISSION PLAN TO TRY TO
REFLECT BACK TO THE STATE A
TRANSMISSION PLAN THAT REALLY IS
THE LEAST COST INFRASTRUCTURE
PLAN. AND WE DO EMBED GRID
ENHANCING TECHNOLOGIES AND NON
WIRE SOLUTIONS INTO THAT. BUT
BUT AT THE END OF THE DAY WE ARE
GOING TO NEED A LOT OF
TRANSMISSION. AND SO WE'RE READY
TO GET GOING. AND I THINK
EVERYBODY'S MOTIVATED TO SEE IT
GET ENERGIZED. I WOULD BET IN
THE 1930S IT WAS EASY, CHEAP AND
FAST. YEAH. I DON'T WANT TO BE,
GLIB ABOUT IT, BUT OBVIOUSLY
PLENTIFUL. IT'S TIME TO INVEST
IS THE BOTTOM LINE. THANK YOU.
ALL RIGHT, BEFORE WE JUMP INTO
THE SUMMER OUTLOOK, I DO HAVE A
COUPLE OF FOLLOW UP QUESTIONS.
AND, SO, MR. MAINZER, JUST, I
THINK PICKING UP ON THE
CONVERSATION AROUND TRANSMISSION
AND I THINK YOU HEARD FROM A
COUPLE OF OTHER MEMBERS
QUESTIONS, I THINK THERE'S A LOT
OF CONCERN. AND I SHARED THIS
WITH YOU YESTERDAY WHEN WE MET
ABOUT THE FACT THAT IT'S TAKING
EIGHT, TEN, 12 YEARS TO BUILD
THESE PROJECTS. I THINK IT WOULD
BE SUPER HELPFUL IF YOU COULD.
WELL, TWO THINGS. I THINK ONE
WILL CERTAINLY DISTRIBUTE THAT
20 YEAR TRANSMISSION PLAN TO
COMMITTEE MEMBERS AS A FOLLOW UP
HERE, I THINK WOULD ALSO BE
SUPER HELPFUL FOR MEMBERS AS
WELL AS FOLKS LISTENING TO
UNDERSTAND THE QUÊ REFORMS THAT
YOU HAVE PLANNED AND THE
UPCOMING MILESTONES ASSOCIATED
WITH THAT. AND WHEN YOU KNOW, WE
CAN START TO SEE SOME OF THAT,
MOVE MORE SWIFTLY. CERTAINLY.
WELL, I THINK AS YOU'RE YOU'RE
ALL AWARE, THIS ISSUE OF QUÊ
REFORM IS A TOPIC THAT IS OF
MAJOR CONCERN ACROSS THE
COUNTRY. AND THE FEDERAL ENERGY
REGULATORY COMMISSION, WHICH, OF
COURSE, HAS PROMULGATED THESE
RULES FOR MANY YEARS, HAS ALSO,
I THINK, COME TO THAT CONCLUSION
IS WHY LAST YEAR THEY ACTUALLY
PUT OUT A SET OF REFORMS TO
INTERCONNECTION QUEUING, WHICH
ESTABLISHED SORT OF A NEXT
BASELINE HÌNH OF STEADY
EFFICIENCIES AND SOME MILESTONES
WHICH ALL OF US THAT ARE
JURISDICTIONAL ARE NOW OBLIGATED
TO COMPLY WITH. AS A MATTER OF
FACT, WE'LL BE SUBMITTING A
COMPLIANCE FILING TO THAT IN THE
NEXT WEEK OR SO. WE HAVE ELECTED
TO GO ABOVE AND BEYOND THE SORT
OF BASELINE REFORMS THAT ARE
EMBEDDED IN WHAT'S KNOWN AS
ORDER 2023, BECAUSE WE THINK
EVEN GREATER COORDINATION AND
GREATER SORT OF SIFTING OF THE
QUEUE IS RESPONSIBLE. AND AGAIN,
I WANT TO EMPHASIZE THAT OUR
THEORY OF INTERCONNECTION C¯
REFORM IS INDEXED TO A RATIONAL
COORDINATION OF LOAD
FORECASTING, POWER PLANNING AND
TRANSMISSION PLANNING, AND
HAVING A TRANSMISSION PLAN WHICH
AGAIN DOES NOT REACT TO A LOT OF
COMMERCIAL ACTIVITY, BUT
ACTUALLY SHAPES THE PATTERN OF
RESOURCE PROCUREMENT AND
INTERCONNECTION QUEUING. AND
WHAT WE'VE BEEN DOING, WE'VE HAD
A VERY, VERY COMPREHENSIVE
EFFORT WITH STAKEHOLDERS FROM
ACROSS CALIFORNIA, VERY
INTENSIVE HERE IN THE LAST YEAR.
IT'S KNOWN AS OUR
INTERCONNECTION PROCESS
ENHANCEMENTS REFORM DOCKET, IN
WHICH WE'VE SAID WE'VE ASKED
OURSELVES HOW CAN WE REALLY
SEPARATE OUT AND STUDY A
RATIONAL NUMBER OF REQUESTS, A
RATIONAL AMOUNT OF CAPACITY THAT
BEARS A GREATER RESEMBLANCE TO
THE ACTUAL DEMAND FOR POWER HERE
IN CALIFORNIA IN THE NEXT FIVE,
TEN, 15 YEARS, AND PROVIDES
STUDY RESULTS THAT COME UP WITH
AN INFRASTRUCTURE PLAN THAT ARE
ACTUALLY SENSIBLE AND RATIONAL
AND ALLOW THE PLANNERS AND THE
FOLKS THAT HAVE TO CAPITALIZE
AND CONSTRUCT THE SYSTEM TO
PRIORITIZE THE RIGHT PROJECTS SO
THAT THEY'RE NOT PARALYZED WITH
SEVERAL HUNDRED THOUSAND
MEGAWATTS OF REQUESTS THAT ARE
SEVERAL MULTIPLE GREATER THAN
THE ACTUAL DEMAND FOR
ELECTRICITY. SO LOOKING AT
COMMERCIAL READINESS CRITERIA,
LOOKING AT ALIGNMENT WITH THE
PLAN, LOOKING AT AT AT SORT OF
LOCAL IMPACTS ON THE SYSTEM AND
PROVIDING A SET OF SCORING
CRITERIA THAT DETERMINE WHICH
PROJECTS WILL THEN BE ELIGIBLE
TO BE STUDIED AND IF WE EVEN
THEN HAVE AN EXCESS OF STUDY
REQUESTS TO GO EVEN FURTHER, TO
EFFECTIVELY RATION, TO SORT OF
AUCTION OFF THE RIGHT TO GET
STUDY. THESE ARE THE REFORMS
THAT WE'RE LOOKING AT. I WANT TO
BE I WANT TO BE CLEAR THAT WE
ARE STILL FINALIZING THIS
PROCESS. AS YOU CAN IMAGINE,
IT'S THERE'S A LOT OF OPINIONS
ON THIS, THIS WE WILL BE TAKING
THIS ISSUE TO OUR BOARD OF
GOVERNORS. THE WEEK OF THE 21ST
OF MAY WILL ALLOW STAKEHOLDERS
TO SORT OF EXPRESS THEIR, THEIR,
THEIR GENERAL POSITIONS ON THIS,
AND THEN WE'LL BE TAKING IT BACK
FOR A DECISION PROCESS ON THE
12TH OF JUNE, JUNE, AND THEN
WITH THE INTENTION THEN OF
GETTING A FILING READY TO GO TO
THE COMMISSION. AND SO BY NEXT
YEAR, WE WANT TO BE IN THE IN
THE POSITION TO START APPLYING
THIS THESE NEW DECISION CRITERIA
TO SORT OUT THE QUÊ MORE
RATIONALLY. SO OUR GOAL AT THE
END OF THE DAY IS, IS WE WANT
THERE TO BE A GOOD COMPETITIVE
SUPPLY OF PROJECTS TO HELP
SUPPORT COST EFFECTIVENESS FOR
THE UTILITIES. WE WANT TO GIVE
EVERYBODY A CHANCE TO GET ON THE
GRID, BUT WE ALSO NEED TO MAKE
SURE THAT THERE'S A RATIONAL SET
OF SORTING CRITERIA IN THE
PLANNING AND THE STUDYING, BEAR
SOME RESEMBLANCE TO THE ACTUAL
DEMAND FOR ELECTRICITY, SO THAT
WE CAN GET PROJECTS BUILT,
CONSTRUCTED, AND ON BOARD
RESOURCES AND SUPPORT
RELIABILITY. THANKS. THANK YOU,
AND THEN PRESIDENT REYNOLDS, I
WANT TO FOLLOW UP ON ASSEMBLY
MEMBER FRIEDMAN'S QUESTION ABOUT
DISTRIBUTED ENERGY RESOURCES. I
DID NOT I DIDN'T UNDERSTAND IN
YOUR ANSWER. SO HOW ARE WE
INCORPORATE GETTING THESE
DISTRIBUTED ENERGY RESOURCES
INTO OUR FORECASTING SUCH THAT
WE'RE NOT EFFECTIVELY DOUBLE
PROCURING OR HAVING TO DOUBLE
COUNT? SO MOST, BEHIND THE METER
, DISTRIBUTED ENERGY RESOURCES
ARE TAKEN INTO ACCOUNT IN THE
LOAD FORECAST. SO THE LOAD
FORECAST WILL GO DOWN. AND THEN
THAT IN TURN, SINCE WE TRANSLATE
THAT INTO AN RA REQUIREMENTS,
THE RA REQUIREMENTS GO DOWN OKAY
OKAY. AND SO YOU HAVE SUFFICIENT
VISIBILITY INTO THOSE TIERS IN
ORDER TO INCORPORATE IT AS PART
OF YOUR FORECAST. YEAH. SO WE
HAVE DATA REQUIREMENTS THAT WE
CURRENTLY COLLECT INFORMATION ON
EVERY EVERYTHING THAT'S OVER ONE
MEGAWATT. SO AND THEN WE HAVE A
LOT OF DATA SOURCES. SO WHAT
HAPPENS IS IN THE FORECASTING WE
START WITH THE TOTAL NUMBER OF
ELECTRONS THAT ARE NEEDED. SO WE
CALL CONSUMPTION. AND THEN WE
REMOVE ALL THE THINGS LIKE
ENERGY EFFICIENCY BEHIND THE
METER GENERATION FROM IT. AND
THEN SEND IT OVER TO PUC FOR
PROCUREMENT PLANNING. GOT IT.
OKAY. AND THEN I DO HAVE ONE
LAST QUESTION ABOUT FORECAST
METHODOLOGY. SO OBVIOUSLY
FORECASTS ARE BASED ON DATA
ANALYSIS USUALLY OF HISTORICAL
DATA, THE ADVENT OF ARTIFICIAL
INTELLIGENCE AND JUST THE HUGE
EXPLOSION OF AI IS TRULY
EXTRAORDINARY AND EXPECTED TO
CREATE A I DON'T KNOW, IT'S LIKE
SEVEN X INCREASE IN ELECTRICITY
DEMAND OR SOMETHING, YOU KNOW,
TRULY ASTRONOMICAL. HOW ARE WE
TAKING THAT INTO ACCOUNT AS WE
ARE FORECASTING FOR THE FUTURE
AND ENSURING RELIABILITY? YEAH.
GREAT QUESTION, ON THAT ONE. SO,
AS A PART OF THE DEMAND
FORECASTING PROCESS, EVERY YEAR
WE HAVE A WORKSHOP THAT TALKS
ABOUT EMERGING LOADS, SO THE
LAST FEW YEARS WE HAVE BEEN
STARTING TO HEAR ABOUT THE AI
LOAD. SO WE HAVE A DEDICATED
WORKSHOP COMING UP THIS MONTH,
LATER THIS MONTH TO JUST TALK
ABOUT HOW DO WE PROJECT THAT.
AND A PART OF THAT IS ONCE WE
HEAR STAKEHOLDER INPUT ON WHAT
THEIR EXPECTED LOAD GROWTH IN
CALIFORNIA IS, WE HAVE TO
COLLECT DATA. SO PART OF THAT
AND THEN WE INTERAGENCY JOINT
AGENCIES TALK THROUGH HOW BEST
TO INCORPORATE THAT INTO THE
FORECAST. BUT THAT IS HAPPENING,
ONE OF THE PIECES TO USE AN
EXAMPLE WAS CANNABIS LOAD. A FEW
YEARS AGO, THE CANNABIS LOAD WAS
EXPLODING AND WE WERE NOT REALLY
CAPTURING THAT IN THE FORECAST.
AND YOU KNOW, THE STEPS WERE
HAVE A WORKSHOP GATHERED THE
INFORMATION REQUIRED AND THEN
BAKE IT IN. AND FOR THOSE THINGS
LIKE ELECTRIFICATION THAT WE'RE
NOT CLEAR ABOUT, ESPECIALLY
INDUSTRIAL GROWTH, WE DO WHAT IS
CALLED ADDITIONAL ACHIEVABLE
SCENARIOS. AND WE ALL AGREE THAT
THOSE ARE REASONABLE TO BAKE IN,
AND WE BAKE THOSE THINGS IN.
OKAY. UNDERSTOOD, GREAT. I HAVE
A BUNCH MORE QUESTIONS, BUT I
WILL GO AHEAD AND HEAR FROM
MEMBER REYES, AND THEN WE'LL
JUMP INTO THE 2024 OUTLOOK. I
KNOW I ARRIVED LATE, BUT I DON'T
BELIEVE YOU TALKED ABOUT THE
DIABLO CANYON, POWER PLANT OR
WAS THAT DISCUSSED? BUT IN THE
PAPERS, THE ANALYSIS THAT WAS
PROVIDED, THERE WAS TALK ABOUT
THAT. A PAGE 12, THE, THE
BACKGROUND PAPER DOES MENTION
THE TWO REPORTS THAT WERE
REQUIRED BY STATUTE WHEN THE
LEGISLATURE EXTENDED THE
AUTHORIZATION OF THE DIABLO
CANYON POWER PLANT TWO YEARS
AGO, ONE OF THOSE REPORTS WAS
MEANT TO AND I AND I QUOTE,
PRESENT A COST COMPARISON OF
WHETHER EXTENDED OPERATIONS AT
THE DIABLO CANYON POWER PLANT
COMPARED TO FOR PORTFOLIO OF
OTHER FEASIBLE RESOURCES
AVAILABLE FOR CALENDAR YEARS 24
AND 25, IS CONSISTENT WITH
ENERGY SECTOR, GHG EMISSION
REDUCTIONS. THE COMMITTEE NOTES,
THAT THE CC ONLY TOOK ONLY
LOOKED AT RESOURCES THAT COULD
BE ONLINE BY 2025, AND THAT WERE
NOT COMPETITIVE WITH RESOURCES.
LOAD SERVING ENTITIES, THAT WERE
PROCURING. IT SEEMS ODD THAT
THAT WAS THE WAY IT WAS WRITTEN.
EVEN ON ITS OWN. BUT WHAT GAVE
ME GREAT PAUSE WAS THE LINE AT
PAGE 12 AGAIN OF THE BACKGROUND
PAPER, WHICH SAYS, AND I QUOTE,
IT IS UNCLEAR TO COMMITTEE WHY
THE CEC ANALYSIS IGNORED STATUTE
AND PROVIDED A COST COMPARISON
TO A PROCUREMENT THAT BEARS NO
RESEMBLANCE TO THE ACTUAL
PROCUREMENT ORDERED BY THE CPUC
TO REPLACE DCP DIABLO CANYON.
CAN YOU EXPLAIN WHY THE CC WOULD
IGNORE LEGISLATIVE STATUTE WHEN
CONDUCTING THIS ANALYSIS. THANK
YOU, ASSEMBLY MEMBER I
APOLOGIZE, I'M TRACKING THE
QUESTION. OKAY, BUT IF I MISS
SOMETHING, I WOULD LOVE TO KIND
OF COME BACK TO THAT, BUT PAGE
12. YES, THE FIRST FULL
PARAGRAPH, BUT THE MOST
IMPORTANT PART IS AT THE SECOND
FULL PARAGRAPH. YES SO, I'LL
JUST KIND OF GO FROM THE CCS
THINKING IN KIND OF, JUST DOING
WHAT THE STATUTE ASKED US TO DO,
THE STATUTE WAS ASKING US TO
LOOK AT, RESOURCES THAT COULD BE
ALTERNATIVES, THAT COULD DO WHAT
DIABLO CANYON DOES. SO WHEN WE
EXPLORED THAT, WE LOOKED AT
THREE DIFFERENT ELEMENTS, ONE
IS, YOU KNOW, WHEN WE THINK
ABOUT DIABLO, IT'S A BASE LOAD
24 SEVEN. SO WE WANTED A
COMBINATION OF RESOURCES THAT
COULD ACTUALLY PROVIDE 24 OVER
SEVEN, ABILITY. SO THAT'S ONE,
TWO, YOU KNOW, IT ASKED US TO BE
ABLE TO REPLACE DIABLO. SO WE
LOOKED AT, YOU KNOW, GIVEN THAT
THE DEADLINES FOR,
DECOMMISSIONING DIABLO WERE IN
24 AND 25, WE LOOKED AT THE
OPPORTUNITIES FOR RESOURCES TO
BE ABLE TO DO THAT. AND THIRD,
WE LOOKED AT WHETHER THE
RESOURCES CAN HAVE THE
GREENHOUSE GAS EMISSION
REQUIREMENTS AS, AS THE STATUTE
CALLS FOR. SO WHEN WE LOOKED AT
ALL THOSE THREE THINGS AND THE
AND THE STATED ONE THAT YOU
MENTIONED ABOUT, GIVEN THE
DELAYS IN PROCUREMENT AND THE
SUPPLY CHAIN ISSUES, WE DID NOT
WANT THE ALTERNATIVE ANALYSIS TO
COMPETE WITH WHAT IS ACTUALLY
NEEDED TODAY TO REPLACE DIABLO
CANYON DOWN THE LANE. SO WHEN WE
TOOK ALL OF THEM IN TOTALITY,
THE OUR ABILITY TO BRING IN NEW
RESOURCES THAT COULD FULFILL
THOSE THINGS, DID NOT, EXIST.
THAT IS THERE. SHOULD WE BE
EXPECTING A ANOTHER REPORT? YEAH
SO, WHILE THE STATUTE, MOST OF
THE 846 AND 205 REQUIREMENTS
ASKED US TO CONTINUOUSLY STUDY.
SO AS A PART OF OUR RELIABILITY
ANALYSIS, EVERY YEAR WILL STUDY
SOME OF THESE OPPORTUNITIES. BUT
SPECIFIC TO THAT REPORT, THERE
AREN'T ANY PLANS NOW TO REDO
ANOTHER ONE. THERE ARE PLANS.
THEY AREN'T THERE AREN'T ANY
PLANS. ALL RIGHT. THANK YOU. ALL
RIGHT, WE'LL GO AHEAD AND MOVE
ON TO THE SUMMER 2024 OUTLOOK.
THANK YOU. THANK YOU. CHAIR, I
THINK WE ARE GOING TO GO. OKAY.
SO WE ARE GOING TO GO INTO, THE
SUMMER ANALYSIS, BUT I'M GOING
TO HAND OFF TO PRESTON MEINZER
FOR THAT. BUT JUST BEFORE I HAND
IT OFF TO PRESIDENT MEINZER, I
JUST WANT TO POINT TO, WHAT YOU
HAVE SEEN ON THE LAYERED
APPROACH WE TALKED ABOUT NOW
THAT WE ARE IN THIS REALLY CLOSE
TO THE SUMMER, WE ARE IN THIS
OPERATIONAL TIME FRAME. AT THIS
POINT, THE BEST ANALYSIS WE HAVE
IS COMING FROM CAISO, SO LOOKING
AT THE SUMMER. SO I WANT TO HAND
IT OFF TO, PRESTON MEINZER FOR
THE ANALYSIS. THANK YOU. VICE
CHAIR AND COMMITTEE MEMBERS
LATER TODAY WILL BE ACTUALLY
RELEASING OUR WHAT'S KNOWN AS
OUR 2024 SUMMER READINESS
REPORT. SO I WANTED TO GIVE YOU
A PREVIEW HERE TODAY. BUT WE ALL
OF THIS PROCUREMENT THAT WE'VE
DESCRIBED EARLIER TODAY HAS
DEFINITELY, MADE A MAJOR
DIFFERENCE. AND WE OUR ANALYSIS
AT THIS POINT DOES SHOW A
REASONABLE SUPPLY MARGIN, TO
MEET FORECASTED DEMAND AND
RESERVE MARGINS FOR 2024. THIS
IS CERTAINLY A MUCH BETTER
POSITION WHEN YOU LOOK AT JUST
SOME OF THE NUMBERS, NEARLY
6300MW OF NEW CAPACITY ADDED IN
2023, ANOTHER 1200 MEGAWATTS OF
CAPACITY BROUGHT ON BOARD JUST
THIS YEAR THROUGH APRIL. AND AS
WE MENTIONED EARLIER, WE DEPLOY
AT THE AT THE CALIFORNIA ISO Ã
STANDARD. LOSS OF LOAD
EXPECTATION MODEL, WHICH IS SORT
OF THE INDUSTRY STANDARD USED BY
ALSO BY THE OTHER, THE ISOS,
WHICH LOOKS AT A 1 IN 10
FORECAST. AND WE BELIEVE AT THIS
POINT OUR NUMBERS ARE INDICATING
THAT WE HAVE ABOUT A 2550
MEGAWATT SURPLUS GOING INTO THIS
SUMMER, WHICH IS CERTAINLY, JUST
A JUST AN ENORMOUS IMPROVEMENT
OVER THE PAST SEVERAL YEARS. I
WANTED TO POINT OUT JUST ONE
OTHER SLIDE. WE'RE ALSO AT THE
AT THE POINT IN THE YEAR WHEN WE
START TRYING TO GET START
GETTING SOME REASONABLE FIDELITY
ON THE WEATHER FORECAST FOR THE
SUMMER. WE'RE ALL WE ALL SPEND A
LOT OF TIME LOOKING AT THE
WEATHER, AT THIS PARTICULAR
POINT, LOOKING IN THE SUMMER,
WE'RE SEEING AN INCREASED CHANCE
OF ABOVE NORMAL TEMPERATURES
ACROSS THE INTERIOR CALIFORNIA,
BUT LOWER CHANCE OF ABOVE NORMAL
TEMPERATURES FOR THE COASTAL
AREA. THIS IS ACTUALLY FAIRLY
SIMILAR TO WHAT WE SAW LAST
YEAR, SO WE'RE ACROSS JUNE
THROUGH AUGUST. WE'RE LIKELY TO
SEE SIGNIFICANTLY ELEVATED
TEMPERATURES ACROSS THE DESERT
SOUTHWEST AND POTENTIALLY UP
INTO THE NORTHWEST. BUT AGAIN,
LOWER CHANCE OF ABOVE NORMAL
TEMPERATURES IN THOSE COASTAL
LOCATIONS WHERE WE HAVE SO MANY
PEOPLE LIVING, PARTICULARLY IN
IN SOUTHERN CALIFORNIA. AS WE
GET FURTHER INTO THE SUMMER, WE
DO SEE A HIGHER PROBABILITY OF
THINGS HEATING UP IN CALIFORNIA.
BUT THAT HEAT APPEARS TO BE AT
THIS STAGE, CONCENTRATED IN THE
INTERIOR OF THE STATE. SO? SO
NOT AS EXTREME. I WILL NOTE, YOU
KNOW, HYDRO CONDITIONS ARE
ALWAYS AN IMPORTANT PART OF THE
SUPPLY DEMAND BALANCE. AS YOU
RECALL, BACK IN 2022, WHEN WE
WERE STILL VERY MUCH MIRED IN
THE IN THE DROUGHT, WE WERE ABLE
TO IMPORT A SIGNIFICANT AMOUNT
OF ELECTRICITY FROM THE PACIFIC
NORTHWEST BETWEEN 22 AND 23.
THOSE CONDITIONS REALLY FLIPPED
ON THEIR HEAD. WE'VE HAD TWO
VERY, VERY GOOD WATER YEARS HERE
IN CALIFORNIA THIS YEAR. WE'RE
IN GOOD SHAPE HYDROELECTRIC. BUT
THE DROUGHT CONDITIONS HAVE
REALLY HIT THE PACIFIC
NORTHWEST, PARTICULARLY UP IN
THE CANADIAN BASIN. AND SO AS WE
GET FURTHER AND FURTHER IN THE
SUMMER, OUR ABILITY, OUR SORT OF
OUR NET IMPORTS FROM
PARTICULARLY HYDRO FROM OUT OF
STATE ARE LIKELY TO, TO BE
SOMEWHAT STRAINED. SO THAT'S A
VARIABLE THAT WE'LL KEEP A CLOSE
EYE ON. AND JUST IN GENERAL, THE
WEATHER PATTERNS BOTH WITHIN
CALIFORNIA AND FROM OTHER OUR
OTHER SUPPLY BASINS IN THE WEST.
BACK TO YOU AS VICE CHAIR. THANK
YOU. PRESIDENT, MAINZER. SO JUST
KIND OF GOING TO THE NEXT SLIDE,
SLIDE NUMBER 15, JUST TO KIND OF
PREVIEW THE EXPECTED NEW
RESOURCES TO BE ADDED THIS YEAR
AS WE MENTIONED, WE ADDED OVER
6300MW LAST YEAR. AND RECENTLY
THERE HAS BEEN SOME PRESS ON THE
UNPRECEDENTED STORAGE. WE HAVE
IN CALIFORNIA. SO JUST OVER THE
LAST FOUR YEARS, AS PRESIDENT
REYNOLDS MENTIONED, WE'VE ADDED
OVER 18,000MW, BUT 10,000 OF
THAT CAN SUPPORT US IN THE
EVENING, WHICH IS REALLY, REALLY
GOOD NEWS. SO THIS YEAR WE'RE
EXPECTING TO ADD ANOTHER 7500MW
ON THE GRID, AND JUST TO KIND OF
NOTE THAT WE ARE NOW AT OUR
FIRST QUARTER MARK, YOU KNOW, WE
ARE ABOUT 1200MW IN THIS YEAR,
ALSO, ONE THING WE, OBSERVED
OVER THE LAST FOUR YEARS, THE
BUILD RATES IN JANUARY AND
FEBRUARY ARE THE LOWEST BECAUSE
OF THE WINTER CONDITIONS. AND WE
START PICKING UP AS WE GO INTO
THE SUMMER. AND REALLY HAVE HIGH
NOVEMBER AND DECEMBER RATES.
THAT'S WHAT WE OBSERVE. NEXT
SLIDE. SO JUST TO KIND OF GIVE
THEN SOME PRECISE NUMBERS, GOING
IN BASED ON PRESIDENT MESA'S,
KIND OF WORK. SO IF YOU'RE
LOOKING AT, THE NEXT TABLE, I
WANT TO SLOWLY WALK THROUGH EACH
OF THIS, COLUMN REPRESENTS A
DIFFERENT YEAR, AS WE WERE
WALKING IN SOME FOR 2022, WHEN
WE WERE DOING THE ANALYSIS AHEAD
OF SUMMER 2022, AND I WANT TO
JUST DIRECT YOUR, ATTENTION TO
THE LAST THREE ROWS. WE WERE
BARELY MEETING OUR STANDARD
CONDITIONS IN SUMMER 2022. AND
IF YOU LOOKED AT 2020 AND 2022
EXTREME EVENTS, WE WERE GOING
INTO SUMMER WITH 7000 MEGAWATT
DEFICIT. AND THAT'S
UNFORTUNATELY WHAT HAPPENED. SO
WE HAD 7000 MEGAWATT DEFICIT
GOING INTO THAT SEPTEMBER SIXTH
HEAT WAVE. AND WE HAD TO DO
EXTRAORDINARY THINGS, INCLUDING
A TEXT ALERT TO KEEP THE LIGHTS
ON IN CALIFORNIA COMING INTO
2023. AGAIN, THIS IS A PROGRESS
OF HAVING MORE AND MORE
RESOURCES ON THE TABLE. THE
CONDITIONS WERE MUCH BETTER, SO
WE WERE HAVING SURPLUS IN THE
STANDARD CONDITIONS AND WE HAD
SOME, DEFAULTS ARE DELTAS IN THE
2020 AND 2022 EXTREME EVENTS,
BECAUSE WE ARE USING THE
TERMINOLOGY OF 2020 AND 2022
EVENTS, THE 2020, WE HAD ABOUT
9% DEVIATION IN, IN, IN DEMAND
FROM WHAT WE EXPECTED IN 2022.
THAT WAS 12.5, DIFFERENCE
DIVERGENCE. SO THAT'S THE
ENORMITY OF HEAT THAT WE'VE SEEN
FOR A FEW DAYS NOW GOING INTO
2024. GIVEN HOW MANY RESOURCES
WE WERE ABLE TO ADD LAST YEAR,
WE ARE IN A MUCH BETTER
SITUATION IN THE MARKET TODAY.
WE HAVE ABOUT, YOU KNOW, 4000MW
OF ADDITIONAL RESOURCES ABOVE
AND BEYOND WHAT WE NEED TO MEET
FOR RAS. BUT AS YOU GO TO THOSE
EXTREME EVENTS, THE TIGHTNESS
BEGIN TO OCCUR. SO ONE IMPORTANT
THING I WANT TO NOTE HERE, THIS
DOES NOT INCLUDE A COINCIDENTAL
FIRE RISK, A CATASTROPHIC FIRE
RISK. IF WE HAD A CATASTROPHIC
FIRE RISK LIKE WHAT HAPPENED IN
BOOTLEG, IN 2021, THAT 4000MW
WILL BE ADDED AS A DEFICIT TO
THESE NUMBERS. SO THOSE WILL BE
EXTRAORDINARY SITUATIONS THAT WE
HAD TO DEAL WITH. SO GOING TO
THE NEXT SLIDE, SLIDE NUMBER 17
TÍNH. AND THIS IS TO KIND OF
TEMPER THE OPTIMISM WITH SOME
CAUTION, WE TRY TO STRUCTURE,
THE, THE KIND OF EVENTS THAT WE
SEE. IT'S ANYWHERE FROM LOSS OF
IMPORTED ENERGY TO AN EARTHQUAKE
OR A CYBER ATTACK, ANY, ANY KIND
OF THINGS COULD IMPACT OUR GRID.
SO SOME OF THEM ARE SLOW MOVING.
WE CAN SEE THEM COMING AND SOME
OF THEM ARE SUDDEN ONSET. WE
CANNOT SEE THEM COMING. SO I
JUST WANT TO CAUTION THAT MUCH
OF OUR WORK TODAY SUPPORTS THOSE
SLOW MOVING, VISIBLE CONDITIONS
THAT WE COULD PREPARE FOR. BUT
IF IT'S A SUDDEN ONSET CYBER
ATTACK, SUDDEN ONSET
TRANSMISSION FIRE, THOSE ARE THE
THINGS THAT WE WOULD NOT BE
PREPARED FOR, SHORT OF A FEW
RESOURCES WE HAVE IN OUR POCKETS
THAT CAN QUICKLY COME ONLINE,
INCLUDING SOME DEMAND SIDE
RESPONSE. NEXT SLIDE, SO THEN,
GOING ALL THE WAY BACK TO 2021,
THIS IS A SLIDE WE SHOWED YOU
REGULARLY IN THESE MEETINGS,
WHEN WE TALK ABOUT THE NEED FOR
STRATEGIC RESERVE, WHY DO WE
NEED THESE ADDITIONAL
CONTINGENCY RESOURCES? LET ME
SLOWLY WALK THAT STACK, THAT
BOTTOM AND DARK BLUE IS WHAT WE
WOULD NEED TO PROCURE TO JUST
MEET OUR PLANNING STANDARDS.
THAT'S THE REPRESENTATION. THE
BOTTOM BLUE THAT YOU GO TO THE
NEXT SLIDE. BLUE. SO GIVEN THAT
ALL OF THESE RESOURCES MIGHT NOT
COME ONLINE OAN AND THERE MIGHT
BE SOME DEVELOPMENTAL DELAYS,
YOU NEED TO CUSHION THAT WITH
SOME ADDITIONAL RESOURCES. NEXT
YOU ADD TO THAT THESE EXTREME
HEAT CONDITIONS. AND FINALLY THE
CATASTROPHIC CONDITIONS. SO THE
TOP THREE BUCKETS ARE WHAT
YOU'RE TRYING TO MEET WITH
RESOURCES OUTSIDE THE STANDING
PLANNING PROCESS. YOU KNOW, THAT
MIGHT, YOU KNOW, REQUIRE SOME
SUPPORT FROM THE GENERAL FUND.
NEXT SLIDE. SO GOING INTO 2024
WE'VE JUST GIVEN YOU THAT WE'RE
LOOKING GOOD. BUT THEN HOW ARE
OUR CONTINGENCIES LOOKING. THOSE
THOSE SET OF RESOURCES OUTSIDE
OUTSIDE THE PLANNING RESOURCES,
THE LARGE INFUSION OF THE
STRATEGIC RESERVE WITH THE OTC
POWER PLANTS THAT DWR HAS
CONTRACTED FOR AND DIRECTOR HÌ
IS GOING TO TALK ABOUT, WE ARE
LOOKING PRETTY GOOD GOING INTO
THE SUMMER WITH THE NUMBER OF
MEGAWATTS THAT WE COULD RELY ON
IN EMERGENCIES. SO THAT'S THAT'S
WHAT THIS SLIDE IS ABOUT. SO WE
WILL GIVE YOU FOR EACH ONE OF
THEM, YOU KNOW, THERE'S A TOP
LINE WHICH IS THE STRATEGIC
RESERVE, WHICH IS LARGELY STATE
FUNDED. THOSE ARE THE RESOURCES
I'M GOING TO DISCUSS IN A BIT.
BUT FIRST I WANT TO PASS TO
PRESIDENT REYNOLDS TO TALK ABOUT
THE CPUC PORTION OF THOSE
RESOURCES AND THEN GO TO
DIRECTOR HÌ FOR THE RESOURCES
FROM DWR. THANK YOU, VICE CHAIR
GUNDA, SO ON THE PUC SIDE, AS I
MENTIONED, AFTER 2020, THE PUC
OPENED A EMERGENCY SUMMER
RELIABILITY PROCEEDING AND THE
INTENT OF THAT WAS REALLY, WHAT
CAN WE DO QUICKLY TO HAVE
ADDITIONAL MEGAWATTS AVAILABLE
IN EMERGENCIES? AND THOSE COULD
BE ADDITIONAL SUPPLY RESOURCES
AS WELL AS DEMAND SIDE RESOURCES
, MEANING DEMAND RESPONSE. HOW
CAN WE REDUCE DEMAND QUICKLY
DURING EMERGENCY EMERGENCIES AND
LINE THOSE UP IN ADVANCE SO
WE'RE NOT SCRAMBLING WHEN WE SEE
AN EMERGENCY COMING ON. SO ONE
OF THOSE, THE FIRST ONE IS
EMERGENCY LOAD REDUCTION
PROGRAM, AND WE CALL IT Â ALRP
AS WELL AS THE SMART THERMOSTATS
PROGRAM. SO THAT IS ON THE
DEMAND SIDE. AND THAT PROGRAM IS
PAY FOR PERFORMANCE. AND ALL OF
THE, ALL OF OUR LOAD SERVING
ENTITIES WERE ORDERED TO
ESSENTIALLY GO OUT AND SEE HOW
MUCH YOU SEE IF CUSTOMERS YOU
CAN GET CUSTOMERS TO SIGN UP.
THERE'S NO PENALTY IF YOU DON'T
PERFORM, BUT YOU GET PAID IF YOU
REDUCE YOUR DEMAND WHEN CALLED
UPON. IN EMERGENCIES. AND A
LARGE PART OF THAT PROGRAM IS
RESIDENTIAL AND COMMERCIAL
CUSTOMERS, YOU MIGHT HAVE HEARD
OF POWER SAVER REWARDS. SO THIS
IS JUST INDIVIDUAL HOUSEHOLDS.
IF THEY'RE ABLE TO REDUCE DEMAND
COMPARED TO BASELINE, THEY CAN
GET PAID, FOR THAT DURING
EMERGENCIES. ON THE COMMERCIAL
SIDE, WE HAVE AN EXISTING
PROGRAM, EXISTING PROGRAMS THAT
PAY FOR DEMAND, RESPONSE DURING
EMERGENCIES THAT THAT IS PART OF
OUR NORMAL PLANNING. IT'S PART
OF THE RAS REQUIREMENTS. AND SO
WE HAVE THAT WE THINK ABOUT THAT
SEPARATELY, BUT WE HAVE RELIED
ON THAT PROGRAM DURING
EMERGENCIES. IT IS CALLED WHEN
CAISO DOES AN Â WATCH. AND SO
YOU MIGHT HEAR OF AN Â WATCH
WHERE CERTAIN RESOURCES ARE
BEING CALLED, BUT WE HAVE WE
HAVE KNOWN RESOURCES THAT WE
HAVE RELIED ON IN THE PAST. AND
SO THAT'S KIND OF THE FIRST
LEVEL OF, OF EMERGENCY SUPPORT.
WE ALSO HAD THE IOUS GO OUT AND
GET ADDITIONAL IMPORTS THAT WERE
TO BE AVAILABLE DURING
EMERGENCIES. AND THEN THE THIRD
LINE IS AS AVAILABLE ENERGY FROM
INSTALLED RESOURCES. THESE ARE
EXISTING GENERATION, FACILITIES
AND WHERE WE COULD GET
ADDITIONAL CAPACITY OUT OF
THOSE. THERE'S A CONTRACTUAL
RELATIONSHIP THAT WAS SET UP BY
THE IOUS SO THAT THEY WOULD BE
READY WHEN CALLED. THANK YOU
VERY MUCH, CHAIR. VICE CHAIR.
ASSEMBLY MEMBER. BENNETT, THANK
YOU FOR HAVING ME TODAY. SO I'LL
BE PRESENTING THESE STRATEGIC
RELIABILITY RESERVE OVERSEEN BY
THE DEPARTMENT OF WATER
RESOURCES. AND THAT IS THE
ELECTRICITY SUPPLY STRATEGIC
RELIABILITY RESERVE PORTFOLIO.
SO HERE I'VE LAID OUT THE THREE.
HERE I'VE LAID OUT THE THREE
YEARS THAT WE, HAVE BEEN ABLE TO
PROVIDE THE PORTFOLIO, THANKS TO
THE FORESIGHT OF THE LEGISLATURE
AND APPROVING THE AUTHORIZATION,
I'LL FOCUS ON 2023, BECAUSE
THAT'S QUITE SIMILAR TO 22. SO
THOSE TWO YEARS ARE FAIRLY
SIMILAR. SO STARTING IN 2023, WE
HAD 147.5MW OF THESE EMERGENCY
AND TEMPORARY, RESOURCES FOR
EXTREME EVENTS. THAT INCLUDES
THE 120 THAT WAS ORIGINALLY
BUILT BACK IN 2021, PURSUANT TO
THE GOVERNOR'S EMERGENCY
PROCLAMATION. THÀNH, BUT WE WERE
ABLE TO RETAIN THOSE UNITS AND
ADD TO IT, MOVING DOWN THE 2023
COLUMN, LAST YEAR, WE WERE ALSO
AUTHORIZED TO PROCURE,
ADDITIONAL FERM ENERGY IMPORTS
AND PAY FOR THE ABOVE MARKET
COST OF THOSE RESOURCES. THAT
WAS ALSO DONE IN COORDINATION
WITH THE CPUC TO MAKE SURE THAT
THOSE PROCUREMENTS WERE ABOVE
AND BEYOND THE RESOURCE ADEQUACY
REQUIREMENTS. SO THERE'S NO
DOUBLE COUNTING THERE, WE'RE
STILL AT THE TAIL END OF,
VALIDATING ALL THE INFORMATION
AND THE ASSESSMENTS, BUT FROM
WHAT WE CAN SEE AT THIS POINT
WAS COMING IN ABOUT 3400MW. SO
VERY SIMILAR TO WHAT WE HAD IN
2022. AND YOU'LL NOTICE AT THE
VERY LAST ROW FOR TEMPORARY
DIESEL GENERATORS, OUR
AUTHORIZATION FOR THAT ENDED
JULY 1ST, 2023. BUT DWR OPTED TO
CLOSE THAT PROGRAM EARLY IN
FAVOR OF LESS EMITTING
RESOURCES. SO AGAIN, 22 AND 23
FAIRLY SIMILAR, AND RESOURCES
WERE AVAILABLE FOR ANY EXTREME
EVENTS MOVING INTO 2024. THIS IS
WHERE THINGS ARE QUITE
DIFFERENT. SO WE'RE ADDING TO
OUR EMERGENCY AND TEMPORARY
NATURAL GAS GENERATORS. SO WE'RE
GOING TO BE UP TO 291MW FOR THIS
SUMMER. BUT THE BIG CHANGE THAT
WE'VE TALKED ABOUT IS STARTING
IN JANUARY 1ST OF THIS YEAR, WE
NOW HAVE THREE ONCE THROUGH
COOLING NATURAL GAS RESOURCES.
THOSE WOULD HAVE RETIRED AT THE
END OF 2023. BUT FOR THE
RECOMMEND THE JOINT
RECOMMENDATION FROM THE CDC, PUC
AND CAISO TO THE STATE WATER
RESOURCES CONTROL BOARD TO
EXTEND THEIR OTC COMPLIANCE DATE
SO THAT THESE UNITS CAN BE PUT
INTO THE RESERVE. AND THAT IS
REALLY KIND OF BRINGING TOGETHER
A LOT OF THE DIFFERENT THEMES
THAT WE'VE BEEN TALKING ABOUT
EARLIER TODAY. SO FIRST AND
FOREMOST, IT TOUCHES UPON
RELIABILITY, BECAUSE THESE
RESOURCES WOULD BE THERE TO HELP
WITH EXTREME EVENTS, BUT IT ALSO
TOUCHES UPON AFFORDABILITY AS
WELL, BECAUSE OTHERWISE THESE
RESOURCES WOULD HAVE RETIRED,
BUT USING THE STATE FUNDS, AND
PAYING FOR THEM TAKES THEM OUT
FROM RATEPAYER BURDEN. BUT AT
THE SAME TIME, I'M VERY HAPPY TO
SAY THAT DWR WAS ABLE TO
NEGOTIATE PRICES WITH THESE
GENERATORS THAT WERE ON AVERAGE,
$10 PER KILOWATT MONTH. AND JUST
AS AN IDEA OF WHAT THAT COMPARES
TO, WE DON'T HAVE THE MOST,
PUBLICLY AVAILABLE NUMBERS FOR
RESOURCE ADEQUACY FOR 2023, FOR
2024. BUT I WAS DOING A LITTLE
SLEUTHING ON THE INTERNET AND
THE CCAS ACTUALLY HAVE ON THEIR
WEBSITE THAT THEY'VE BEEN
ENCOUNTERING SOME RAY PRICES IN
2023 THAT HAS ARE AS HIGH AS $60
PER KILOWATT MONTH IN THE
SUMMERTIME. SO AGAIN, COULD BE
VERY DIFFERENT RESOURCES. WE
DON'T HAVE ANY DETAILS OR
INFORMATION, BUT THAT DOES SHOW
YOU, THAT BEING ABLE TO SIGN
THESE CONTRACTS EARLY, BEING
ABLE TO NEGOTIATE RESOURCES THAT
WOULD HAVE OTHERWISE RETIRED,
WAS A GOOD MOVE TO POPULATE THE
STRATEGIC RESERVE, AND LASTLY,
ALSO FOR EMISSIONS, THIS ALSO
CREATES A BALANCE IN TERMS OF
OFFSETTING EMISSIONS TO THE
EXTENT POSSIBLE. SO IN THE
RESOURCE ADEQUACY PROGRAM THERE
IS SOMETHING CALLED A MUST OFFER
OBLIGATION. RESOURCES MUST OFFER
THEMSELVES SO THAT THE GRID
OPERATOR CAN SEE THEM AND THAT
THEY ARE VISIBLE AND USABLE, AND
THAT IS PART AND PARCEL OF THE
RESOURCE ADEQUACY PROGRAM, WHICH
MEANS THAT THESE OTC RESOURCES,
AS OF LAST YEAR, HAD TO BE
AVAILABLE 24 HOURS A DAY, SEVEN
DAYS A WEEK, SO THAT THEY ARE
VISIBLE TO THE GRID OPERATOR AS
RESOURCE ADEQUACY, CAPACITY.
NOW, WITH THE RESERVE, THAT IS
THE OPPOSITE. THEY ARE ACTUALLY
GOING TO BE DEFAULT TURNED OFF
UNLESS AND UNTIL THE CAISO
DECIDES THAT AS A GRID OPERATOR,
THESE RESOURCES COULD BE NEEDED
TO ADDRESS, EITHER SOME
PROJECTED OR, OCCURRING EXTREME
EVENT. SO THAT IS A SEA CHANGE
IN THE OPERATIONAL
CHARACTERISTIC OF THESE
RESOURCES, OF HAVING THEM
DEFAULT OFF ON THE SYSTEM VERSUS
ON TO BE PREPARED ALL THE TIME.
HOWEVER, THOSE RESOURCES ARE
STILL IN THE RESERVE, THEY'RE
BEING MAINTAINED. WE'RE WORKING
COLLABORATIVELY WITH THE
RESOURCE OWNERS AS WELL AS WITH
CAISO TO MAKE SURE THAT THEY'RE
GOING TO BE AVAILABLE AND READY
TO PERFORM IN SUMMER, AND THEN
MOVING DOWN PAST THAT, YOU'LL
NOTICE THAT FOR FERM ENERGY
IMPORTS, THAT IS ALSO BLANKED
OUT. WE NO LONGER HAVE THE
AUTHORIZATIONS, JUST FLAGGING
THAT THAT ENDED OCTOBER 31ST,
2023. THANK YOU, THANK THANK
YOU. MADAM CHAIR, COULD I HAVE A
SPECIFIC QUESTION ABOUT WHAT SHE
JUST WENT OVER? CAN I JUST.
SURE. VERY QUICK. AND I REALLY
APPRECIATE THAT THE OTCS ARE NOW
NOT ON STANDBY, BUT THEY'RE IN
RESERVE, THEY'RE IN OUR MOST
DISADVANTAGED COMMUNITIES. AND
SO I HOPE WE DON'T HAVE TO TURN
THEM ON. AND I APPRECIATE THAT
CAISO WON'T DO THAT UNLESS THEY
ABSOLUTELY NEED TO. BUT DO YOU,
GIVEN THAT WE HAVE AN OPTIMISTIC
SCENARIO, DO YOU THINK IT'S
REASONABLE FOR US TO SAY THAT IN
2024, THE OTC PLANTS WON'T GET
TURNED ON AT ALL? YOU DON'T
THINK THAT'S REASONABLE? THAT'D
BE A GREAT HEADLINE. I DON'T
THINK WE CAN PROVIDE THAT
ASSURANCE. I THINK I DON'T MEAN
ASSURANCE. IS IT POSSIBLE THAT'S
DIFFERENT? WELL, IF THINGS STAY
GOOD, I THINK THE REALITY OF THE
SITUATION IS THAT, YOU KNOW, WE
ARE STILL FACING THE RISK OF
VERY EXTREME WEATHER OR FIRE OR
TRANSMISSION CONTINGENCIES, AND
WE'RE GOING TO BE EVER WATCHFUL.
WE'LL REITERATE THE POINT THAT
THESE WILL BE, YOU KNOW, A
RESOURCE THAT WE WILL ONLY TURN
ON IN LAST RESORT. BUT I THINK
THERE STILL IS A I'LL ASK IT ONE
OTHER WAY AND THEN I'LL STOP.
AND IF IT WAS, IF IT. YEAH, IF
IT, IF WE HAVE THE SUMMER THAT
WE HAD LAST SUMMER. YEAH. WOULD
WE BE ABLE TO KEEP THEM OFF. YES
THANK YOU. ALL RIGHT. WITH. OKAY
CAVEAT THAT THEY STILL NEED TO
BE TESTED IN ORDER TO BE
OPERATIONALLY READY. CORRECT.
YEAH OKAY. THANK YOU, THANK YOU.
SO, SO, CHAIR, WE HAVE A FEW
MORE SLIDES. WE'LL TRY TO GET
THROUGH THIS QUICKLY, SO JUST
KIND OF CLOSING OFF WITH ANOTHER
PART OF THE STRATEGIC RESERVE,
WHICH IS STATE FUNDED. SO YOU
GOT, YOU KNOW, THE LEGISLATURE
GAVE US MONEY TO HAVE THIS Dð
PROGRAMS CALLED THE DSGS AND
DBA. I'M GOING TO JUST MOVE TO
SLIDE NUMBER 22. IN INTEREST OF
TIME, GO TO THE NEXT SLIDE, SO
AT A HIGH LEVEL, THE, THE NATURE
OF THE DSGS, THE DEMAND SIDE
GRID SUPPORT IS VERY SIMILAR TO
WHAT PUC IS DOING, WHICH IS
THESE DEMAND REDUCTION RESOURCES
THAT ARE OPERATIONALIZED THROUGH
A FEW DIFFERENT PATHWAYS, BUT
ALL OF THEM ARE PINPOINTED TO
PERFORMANCE BASED PAYMENTS. SO
IN 2022, WE HAD VERY LITTLE
TIME. IN ABOUT TWO WEEKS, WE
WERE ABLE TO BRING IN ABOUT
315MW TO THE TABLE. BUT THE
REASON WE GOT 315MW WAS ALL OF
THEM WERE DIESEL BACKUP
GENERATORS, AND WE WANT TO BE
ABLE TO BE IN A SITUATION WHERE
WE SUPPLEMENT THEM WITH ACTUAL
CLEAN RESOURCES LIKE DEMAND
RESPONSE AND VIRTUAL POWER
PLANTS. SO IN 2023, WE TESTED
SOME NEW GUIDELINES ON HOW WE
CAN OPERATIONALIZE THEM MOVING
FORWARD. WE HAVE A VERY
OPTIMISTIC VIEW, GIVEN THE
STRONG STAKEHOLDER PROCESS,
WE'VE BEEN ABLE TO DO THAT. WE
CAN BRING IN A NUMBER OF DEMAND
SIDE RESOURCES THAT CAN ACTUALLY
SUPPORT THE GRID DURING
EMERGENCIES. THE DBA, WHICH IS
THE DISTRIBUTED ENERGY, BACKUP
ASSETS, IS A SLIGHTLY DIFFERENT
BEAST, IT HAS TWO DIFFERENT
ASPECTS TO IT. A PART OF THE
MONEY, YOU KNOW, WE WERE
DIRECTED TO INVEST IN BULK SIDE
RESOURCES. SO THE BULK SIDE
RESOURCE SOLICITATION OF ABOUT
130 MILLION HAS ALREADY BEEN
COMPLETED. AND THAT IS GOING TO
GET US ABOUT 300MW BY 2027. SO
THAT'S IN PLACE. AND WE'RE
WORKING ON THAT. ONE OF THE
REASONS WHY YOU SEE A LOT OF
ZEROS ON DBA, WAS WE WERE TAKING
THE NECESSARY TIME TO, TO GO
THROUGH A BROAD STAKEHOLDER
PROCESS TO REALLY INVEST IN
RESOURCES THAT CAN COME RIGHT
AFTER THE, THE, THE OTC POWER
PLANTS, BUT WE CAN HAVE THE TIME
TO DO THEM THOUGHTFULLY. AND
GIVEN THAT THESE ARE NEW
RESOURCE DEVELOPMENT, IT'LL TAKE
SOME LEAD TIME. SO THAT'S THE
REASON WHY YOU SEE ZEROS RIGHT
NOW. BUT THEY'RE ANTICIPATED TO
COME ALONG. AND ONE OF THE MOST
IMPORTANT ASPECTS OF DBA AND
DSGS, ALONG WITH WHAT DWR IS
DOING, IS THESE ARE NOT
RATEPAYER FUNDED. THESE ARE
RESOURCES THAT ARE STATE FUNDED
AND ESSENTIAL TO GO THROUGH THE
EXTREME EVENTS WITHOUT RATEPAYER
BURDEN. SO THEN KIND OF GOING TO
THE NEXT TWO SLIDES VERY QUICKLY
, SLIDE NUMBER 24, QUICKLY THAT
SO GIVEN THAT, YOU KNOW, WE ARE
LOOKING AT DIFFERENT OPERATIONAL
TIMEFRAMES, WE'RE LOOKING GOOD
THIS SUMMER, BUT WE ALSO LOOK AT
THE NEXT TEN YEARS, THE
IMPORTANT PART I WILL ACTUALLY
GO TO 25. SO TO GIVE YOU A HIGH
LEVEL, THE, THE BIGGEST PART IS
THE CLIMATE CHANGE IS GOING TO
CONTINUE TO, SHOW UP IN VERY
DIFFERENT WAYS, BOTH IN TERMS OF
THE HEAT, THE LEVELS OF HEAT.
WE'LL SEE. BUT BUT THE FREQUENCY
OF THAT HEAT AND HOW LONG THOSE
HEAT WAVES ARE GOING TO BE. SO
WHAT YOU'RE SEEING ON THIS SLIDE
IS EACH BAR CONSTITUTES TO HOW
MANY DAYS YOU WILL HAVE
CONSECUTIVE OVER 100 DAYS, FOR
EXAMPLE, IN SACRAMENTO. SO IF
YOU GO ALL THE WAY DOWN TO
1980S, YOU KNOW, THAT WAS UNDER
FIVE DAYS ON AN AVERAGE OVER
100, 100, 100 DEGREE DAYS. BUT
AS WE ARE GOING INTO THE 2023
TIME FRAME, IT'S ALREADY
EXTENDED PAST THAT FIVE INTO
SIX, SEVEN DAYS. AND BY THE END
OF THIS DECADE, YOU WILL BE
HAVING TEN, 20 CONSECUTIVE DAYS
THAT WE HAVE TO HAVE THOSE
ADDITIONAL RESOURCES FOR. AND
THAT BRINGS US TO 26. OKAY. WHEN
YOU PUT ALL THOSE NUMBERS, WHAT
DOES THAT LOOK LIKE? SO WHAT
YOU'RE SEEING HERE ON THIS SLIDE
IS, IS BASICALLY A COMPOUNDED
WORST CASE SITUATION, ALL THE
WAY TO 2034. THE REASON WHY 2034
HAS EXTREMELY HIGH NEGATIVE
NUMBERS IS ONE EXTREME WEATHER,
BUT ALSO TWO, WE DON'T HAVE
PROCUREMENT THAT FAR OUT. SO AS
PUC BRINGS IN MORE PROCUREMENT
ORDERS, THOSE NUMBERS WILL GO
DOWN. BUT I DO WANT TO EMPHASIZE
TO THIS COMMITTEE THAT THIS
PROBLEM IS NOT GOING TO GO AWAY.
IT IS WE ARE GOING TO DO
EVERYTHING WE CAN TO PROCURE
RESOURCES THROUGH RESOURCE
ADEQUACY AND IRP. THAT MEETS THE
STANDARD LEVEL. AND THAT
STANDARD LEVEL IS ABOUT MAKING
SURE WE DON'T EXCEED MORE THAN
ONE OUTAGE EVERY TEN YEARS.
BASED ON THE STOCHASTICS. BUT AS
YOU MOVE FORWARD, GIVEN THE
WEATHER VARIABILITY, WE WILL
HAVE THESE EXTREME EVENTS AND WE
WILL NEED TO HAVE A PATH FOR
THAT MOVING FORWARD. SO THAT
BRINGS US TO THE LAST SLIDE. I
WANT TO, BRING TO YOU ON 28. HOW
ARE WE PREPARING FOR THAT? AS WE
JUST SHOWED YOU IN 2023? YOU
KNOW, IF YOU LOOK AT THE,
CONTRIBUTION OF THE STRATEGIC
RESERVE, IT WAS BROADLY DWR
RESOURCES. SOME DGS RESOURCES,
WHICH WAS LARGELY BUGS AND SOME
CLEAN 2024 TO 2026. THAT STACK
HAS INCREASED SIGNIFICANTLY
BECAUSE OF THE OTC POWER PLANTS
PRESENCE MOVING FORWARD TO 26
AND 20 2030. IF SOME OF THE
RESOURCES YOU GAVE US IN THE
BUDGET CONTINUES TO REMAIN AS WE
IMPLEMENT THEM, A SIGNIFICANT
PORTION OF THAT WILL BE MADE UP
WITH DBA AND DGS RESOURCES. BUT
I JUST WANT TO MAKE SURE THAT
YOU YOU REALIZE THAT WE CANNOT
BRING IN THE LEVELS OF EXTREME
WEATHER RESOURCES. WE NEED, WITH
THE CURRENT, APPROPRIATED
NUMBERS. SO, AND WE DO NOT HAVE
A PLAN BEYOND 2030. CURRENT
LEVELS OF APPROPRIATION, WE HAVE
AND BEYOND 2030, WE DO NOT HAVE
ANY PLANS TO CONTINUE THAT
STRATEGIC RESERVE. SO THE LAST
SLIDE KEY TAKEAWAYS. AGAIN JUST
REMINDING I THINK OUR ANALYSIS
IS LOOKING MUCH BETTER GOING
INTO 24. I HAVE TO SAY WE I CAME
HERE FOR A BRIEFING RIGHT AFTER
THE AUGUST 14TH AND 15TH EVENTS.
IT WAS NOT, FUN TO BE IN FRONT
OF YOU AND TAKING THE QUESTIONS
OF WHY THE LIGHTS WENT OFF, AND
I THINK TO THE POINT THAT WAS
RAISED BY ALL OF YOU TODAY, SOME
OF THE TENSION CONTINUES TO BE
BETWEEN AFFORDABILITY AND HOW
MANY RESOURCES WE REALLY CAN
BUILD. AND HOW DO WE OPTIMIZE
THAT. I THINK WITH THE BEST CASE
IS IF RESOURCES ARE CHEAP AND WE
CAN BUILD IT, WE SHOULD BUILD A
LOT. BUT AS LONG AS WE HAVE THE
CONSTRAINT OF COST AND GHG WILL
HAVE TO ALWAYS CAP HOW MANY
RESOURCES WE BUILD UNDER AN RA
PROGRAM, AND HOW MANY WERE ARE
WE GOING TO SUPPORT THROUGH OUR
GENERAL FUND? OVERALL, WE WILL
HAVE TO CONTINUE TO BUILD AT THE
SAME LEVELS THAT WE HAVE SEEN IN
THE LAST YEAR, WHICH IS ABOUT
6000MW. WE NEED TO CONTINUE TO
BUILD THAT YEAR AFTER YEAR
THROUGH 2045. AND WITH THAT, A
BIG STAT FOR YOU. IF WE ARE
GOING TO REALIZE OUR RESOURCES,
WE NEED ANOTHER 2 MILLION ACRES
OF DEVELOPMENT IN CALIFORNIA. SO
WITH THAT, WE'LL LEAVE THAT
HERE. THANK YOU. WITH THAT, ALL
RIGHT. WE'LL OPEN IT UP FOR
QUESTIONS FROM COMMITTEE
MEMBERS, ASSEMBLY MEMBERS OF OUR
. THANK YOU ALL FOR BEING HERE
TODAY. AND, YOU PROBABLY WON'T
BE SURPRISED THAT MY FIRST I
HAVE TWO QUESTIONS, MY FIRST
QUESTION IS ABOUT OFFSHORE WIND,
AS YOU KNOW, I'M VERY CONCERNED
ABOUT THE FACT THAT WE'RE
PROJECTING HAVING AROUND FIVE
GIGAWATTS OF OFFSHORE WIND
ENERGY BY 2030 OR 31. I'M, I
GUESS WHAT IS YOUR CURRENT
ASSESSMENT ABOUT WHETHER OR NOT
ALL THE THINGS THAT HAVE TO
HAPPEN TO MEET THAT ARE ON
TRACK, AND HOW IMPORTANT IS IT
THAT WE ACTUALLY TAKE STEPS NOW
TO START SECURING THE FINANCING
FOR THE PORT INFRASTRUCTURE?
YEAH. THANK YOU, MEMBERS. I'LL
BEGIN BY, BROADLY, THE, YOU
KNOW, SIX PORTION OF THE WORK
AND THEN PASS TO PRESIDENT
REYNOLDS FOR ANY ADDITIONAL
COMMENTS. I THINK FROM A
STRATEGIC PLAN PERSPECTIVE, I
THINK WE HAVE THE CENTRAL
PROCUREMENT FUNCTION IN PLACE,
AS PUC TAKES DECISIONS ON THAT,
I THINK IT'S AN IMPORTANT
ELEMENT. SO WE HAVE THAT TOOL,
IN TERMS OF PORTS AND PLANNING,
I THINK WE ARE MOVING FORWARD
WITH THE 30 ODD AGENCIES THAT
ARE INVESTED IN IT, AND SOME OF
THE MONEY YOU HAVE GIVEN US FOR
PLANNING PURPOSES. SO OVERALL,
FROM A PLANNING PERSPECTIVE, I
THINK WE HAVE A GOOD HANDLE NOW
STARTS THE IMPLEMENTATION
PROCESS. AND I THINK THAT STARTS
WITH, YOU KNOW, SOME OF THE
STRONG SIGNALS WE GOT FROM THE
IRP ON SOME AUTHORIZED
PROCUREMENT, SO I THINK OVERALL,
I THINK THE PLANNING IS THERE
AND THEN THE IMPLEMENTATION IS
BEGINNING TO TAKE PLACE, AND
THERE'S A BUNCH OF WORK TO DO.
SO, I'VE ALWAYS JUST LOOKING AT
LARGE INFRASTRUCTURE ENTITLEMENT
PROCESSES. I'VE SELDOM SEEN THEM
OCCUR IN PERIODS THAT ARE LESS
THAN FIVE, SIX, SEVEN, EIGHT
YEARS, WE HAVE SIGNIFICANT
AMOUNT OF WORK TO BOTH MAKE THE
FINAL SELECTIONS ON THE PORTS.
THAT WILL BE THE MAIN, STAGING
PORTS, BUT ALSO MOVING THROUGH
THE ENTITLEMENT OF THAT. AND
FRANKLY, FINDING THE FINANCING
TO, PUT IT IN THE FINANCING IN
PLACE TO ASSURE THAT THE
DEVELOPMENT OF THESE
IMPROVEMENTS OF THESE PORTS CAN
TAKE PLACE, TO ME, IT SEEMS LIKE
WHEN I LOOK AT THE ENTITLEMENT
PERIOD ALONE, PLUS THE
CONSTRUCTION OF THE PORTS WE'RE
TAKING, WE'RE MOVING ALL THE,
YOU KNOW, I DON'T SEE HOW WE GET
THERE BY 2030. AND 2031. AND IT
WOULD SEEM TO ME I MEAN, DO YOU
THINK THAT IT'S A FAIR CONCERN
OF MINE THAT WE NEED TO MOVE
THIS YEAR TO START PUTTING THE
FINANCING IN PLACE TO MAKE SURE
THAT OFFSHORE WIND BECOMES A
REALITY AND IS, YOU KNOW, A
REALITY AND IS MEETING THE
OBJECTIVES THAT WE THAT ARE
EMBEDDED IN BASICALLY OUR
FORECAST. YES, YOU KNOW, SO I
WOULD ABSOLUTELY, AGREE WITH YOU
THAT SOME OF THESE LONG LEAD
TIME PROJECTS, YOU KNOW, THE
TIME IS OF ESSENCE, AND I THINK
FROM, FROM THE PERSPECTIVE OF
ALL THE ELEMENTS THAT YOU RAISED
. AND I JUST WANT TO THANK YOU
FOR YOUR LEADERSHIP IN THIS, I
THINK THE SOONER WE, TAKE THOSE
IMPLEMENTATION STEPS, INCLUDING
THE FINANCING, IN PLACE, THE
BETTER CHANCE WE HAVE AT HITTING
OUR TARGETS. AND I. ONE OTHER
QUESTION, I THINK, AND ALSO, ANY
OF YOU CAN ANSWER, WOULD YOU SAY
THAT IT IS A FAIR
CHARACTERIZATION TO SAY THAT
OFFSHORE WIND IS A KEY AND
ESSENTIAL ELEMENT IN MEETING THE
ELECTRICITY THAT WE ARE GOING TO
NEED TO MEET OUR SCOPING PLAN
OBLIGATIONS. I MEAN, I, I THINK
IT'S A CRUCIAL ELEMENT, AND
THAT'S WHY I'VE BEEN PUSHING
FORWARD FOR US TO MAKE STEPS TO
INCLUDE $1 BILLION IN THE BOND,
WHICH OBVIOUSLY ISN'T ANYTHING
CLOSE TO WHAT WE NEED FOR THESE
THINGS. BUT WHEN I LOOK AT THE
TIME FRAME THAT WE HAVE, WHICH
IS ENTITLING, FINANCING,
CONSTRUCTING THE PORTS AND THAT
ALL HAVING TO HAPPEN BETWEEN
2030, I JUST DON'T SEE HOW IT
HAPPENS UNLESS WE TAKE SORT OF
IMMEDIATE STEPS AND THEN EVEN IF
THAT DOESN'T HAPPEN, I IS IT
FAIR FOR ME TO HAVE A
SIGNIFICANT CONCERN ABOUT
WHETHER THE STATE CAN MEET OUR
SCOPING PLAN OBLIGATIONS, WHICH
ALL THE THINGS THAT REQUIRE
ELECTRIFICATION IN THE SCOPING
PLAN IS THAT IS THAT A FAIR
CONCERN THAT I HAVE? I THINK IT
IS A CONCERN. HOW ARE WE GOING
TO MEET THE SCOPING PLAN TARGETS
IN GENERAL, AND HOW ARE WE GOING
TO PUT TOGETHER THE RIGHT
COMBINATION OF RESOURCES THAT
WORK IN THE RIGHT WAY? WE KNOW
WE HAVE AMAZING WIND RESOURCES
OFF THE COAST OF CALIFORNIA, IN
PARTICULAR IN CENTRAL COAST AND
NORTH COAST. AND THEY THEY WORK
THOSE RESOURCES AS ACCORDING TO
THE STUDIES THAT WE'VE SEEN,
WORK VERY WELL WITH OUR SOLAR
THAT WE ALREADY HAVE IN PLACE
LARGE CAPACITY OF SOLAR IN
CALIFORNIA AND SO IN THAT SENSE,
IT'S IT IT WORKS WITH A
PORTFOLIO, LOOKING FORWARD TO
HOW THESE RESOURCES ARE GOING TO
WORK TOGETHER WITH THE BILL
THAT'S GOING ON OFFSHORE WIND
LOOKS VERY POSITIVE FOR OUR
FUTURE. I THINK THE QUESTION FOR
ME IS HOW WHAT HOW DO WE THINK
ABOUT RATEPAYER COST? ALWAYS IN
DOING THAT AND LOOKING FORWARD
TO WHAT WE NEED AND THE RIGHT
COMBINATION OF RESOURCES. AND
YOU'RE RIGHT THAT OFFSHORE WIND
IS GOING TO TAKE ADVANCED
PLANNING. WE NEED TO START SOON.
AND WE ARE WE'RE STARTING TO
LOOK AT THE TRANSMISSION WHERE
THAT MIGHT GO, WHAT THAT MIGHT
COST, HOW WE MIGHT DESIGN IT,
WHAT THE PROCUREMENT MIGHT LOOK
LIKE, AS WELL AS THE PORT
PLANNING. AND THANKFULLY WE HAVE
SOME FEDERAL ASSISTANCE THERE,
AND SO AND WE HAVE THE 524
PROCESS, WHICH HAS REALLY
BROUGHT ALL OF THE AGENCIES
TOGETHER BECAUSE AS VICE CHAIR.
GOOD TO NOTED, THE PERMITTING
PROCESS IS GOING TO BE
CHALLENGING, BUT ALSO WILL
BENEFIT FROM COORDINATED
INTERAGENCY WORK TOGETHER. SO I
THINK ALL THAT IS GOING TO BE
REALLY NECESSARY IN ORDER TO
MAKE SURE THAT WE'RE NOT MISSING
ANY OPPORTUNITY HERE, AND I'M
NOT CRITICIZING ANYONE. I WANT
TO REALLY THANK YOU ALL FOR, YOU
KNOW, REALLY MOVING THAT AHEAD.
I I THINK IT'S A CRUCIAL PART OF
REALLY MEETING OUR SCOPING PLAN
OBLIGATIONS. YOU KNOW, IF I HAD
TO LOOK AT LIKE, THE ONE THING
WE COULD DO THIS YEAR TO
BASICALLY MAKE SURE THAT THAT,
THAT WE'RE ABLE TO SORT OF YOU
KNOW, HAVE THE ELECTRICITY WE
NEED, THE KIND OF ELECTRICITY AT
THE TIME THAT WE WANT IT, IT
WOULD BE TO SORT OF MAKE TAKE
THE URGENT STEP TO SEND THE
SIGNAL TO THE MARKET NOW THAT WE
ARE SERIOUS ABOUT OFFSHORE WIND
AND IT MOVING FORWARD. AND I AND
I'M NERVOUS IF WE WAIT ANOTHER
YEAR THAT WE'RE GOING TO BE
SENDING PRETTY NEGATIVE SIGNALS
TO THE MARKET. SO THAT'S JUST A
COMMENT. I HAVE ONE MORE
QUESTION. AND THEN I WANT TO
GIVE OTHERS TIME, SO THIS IS
ACTUALLY FOR, FOR MR. MAINZER,
SB 350 PASSED IN 2015. TÍNH, YOU
KNOW, THAT INCREASED THE RPS TO
60 REQUIRED THAT PREVAILING
WAGES BE PAID ON ALL
TRANSMISSION PROJECTS BUILT IN
CALIFORNIA, WHAT PROCEDURES DOES
CAL ISO EMPLOY TO ENSURE THAT
BIDDERS ON TRANSMISSION PROJECTS
ARE AWARE OF THE REQUIREMENT AND
TO ENSURE THAT LABOR COSTS IN
THEIR BIDS ARE ACTUALLY FACTORED
IN, OR FACTORING IN PREVAILING
WAGES, AND WHAT STEPS ARE YOU
TAKING TO ASSURE PREVAILING
WAGES ARE ACTUALLY BEING PAID?
AND THEN THE LAST QUESTION IS,
ARE PREVAILING WAGE IS PART OF
THE COST THAT YOU ARE
ANTICIPATING? ARE THEY BEING
WORKED INTO THE COST RELATED TO,
PROJECTED COSTS FOR THE
TRANSMISSION? YEAH, CERTAINLY.
WE SEE, YOU KNOW, I THINK ACROSS
THE, ACROSS OUR ENTERPRISE, I
THINK WE SEE THE IMPORTANT ROLE
OF, OF LABOR IN PLAYING A JUST A
HUGE ROLE IN, IN BUILDING OUT
THE INFRASTRUCTURE ACROSS
TRANSMISSION GENERATION, YOU
NAME IT. SO WE CERTAINLY ONE OF
OUR EVALUATION CRITERIA LOOKING
AT COST AND MAKING SURE THAT WE
ARE ACCURATELY REFLECTING THE
TOTAL INVESTMENT COSTS AND LABOR
COSTS IN OUR BIDS. SO CERTAINLY
SOMETHING WE'RE VERY SENSITIZED
TO. WE'RE ALSO PLEASURED THIS
LAST YEAR TO, TO HAVE, HAD THE
IBEW 1245 NOW OPERATING OUR
CONTROL CENTER. SO WE'RE VERY
ACUTELY SENSITIVE TO THESE
ISSUES. SO THANK YOU. THANK YOU,
MADAM CHAIR. THANK YOU, THANK
YOU. ASSEMBLY MEMBER WITT. THANK
YOU, SO KIND OF THINKING ABOUT
SOME EARLIER PART OF AN EARLIER
CONVERSATION. WHEN WE ARE
LOOKING AT, TRANSMISSION AND
PLANNING, I THINK WHEN WE TALKED
ABOUT, WE TALKED ABOUT I DON'T
WANT IT COULD BE ANY IT COULD BE
ANY INDUSTRY, BUT, THE
FORECASTING, THE PLANNING AND
THEN AND THEN CAL ISO MAKES A
DECIDES HOW MUCH WE SHOULD
ACTUALLY BE BUILDING. IN THE
PROCESS. I MEAN, WE DON'T NEED
TO GO BACK TO THE 1930S HERE,
BUT IN THAT PROCESS, ARE WE
LOOKING AT FUTURE CAPACITY FOR
WHAT IS BEING BUILT SO THAT, IN
OTHER WORDS, IF WE'RE BUILDING
TOWERS AND WIRES AND ARE WE ARE
WE THINKING ABOUT THE FUTURE
CAPACITY, OR ARE WE JUST
BUILDING FOR WHAT WE NEED NOW
BECAUSE IT'S SUCH AN ONEROUS
PROCESS TO GO THROUGH AND FIVE
YEARS FROM NOW, IF WE NEED THAT,
WE GOT TO MAKE PEOPLE GO THROUGH
A WHOLE NEW SONG AND DANCE TO
GET THERE. SO CAN YOU DESCRIBE
HOW THAT IS DONE? YEAH. THANK
YOU FOR THE QUESTION. I YOU
KNOW, ONE OF THE REASONS WE
DECIDED TO DEVELOP A 20 YEAR
TRANSMISSION OUTLOOK WAS EXACTLY
FOR THAT REASON, YOU CAN'T JUST
BE THINKING ABOUT TRANSMISSION
JUST FOR THE NEXT 2 TO 3 YEARS.
YOU REALLY DO NEED TO STEP BACK
AND THINK ABOUT A WHOLE BUNCH OF
DIFFERENT SCENARIOS. GROWTH
SCENARIOS, TECHNOLOGY SCENARIOS,
RESOURCE DEVELOPMENT SCENARIOS,
AND MAKE SURE THAT YOU'VE GOT A
PLAN THAT'S ROBUST AND HONESTLY
IS SCALABLE AS WELL. SO WHEN
WE'RE THINKING ABOUT THE MAJOR
CORRIDORS THAT WE'RE BUILDING
OUT, BOTH WITHIN CALIFORNIA AND
AS WE AND OFFSHORE AND AS WE
LOOK TO, YOU KNOW, OTHER PARTS
OF THE WESTERN UNITED STATES TO
MEET SOME OF CALIFORNIA'S
RESOURCE PLANNING REQUIREMENTS.
WE'RE DEFINITELY THINKING ABOUT
GROWTH AND SCALABILITY AND
EXPANSION CAPABILITY AND
INTERCONNECTED VIÆT, BECAUSE AS
YOU'VE MENTIONED A COUPLE OF
TIMES, I REALLY APPRECIATE THE
SENSITIVITY. YOU KNOW, OUR
TRANSMISSION SYSTEM IS REALLY IS
THE FUNDAMENTAL, YOU KNOW,
UNDERGIRDING OF RELIABILITY AND
ULTIMATELY AFFORDABILITY AND OUR
ABILITY TO MOVE POWER AROUND TO
WHERE IT'S NEEDED, PARTICULARLY
UNDER ACUTE EVENTS. SO WE ARE
DEFINITELY SENSITIVE TO THAT
ISSUE. AND EVEN THOUGH WE'RE
DOING WE'RE ON A TWO YEAR
PLANNING CYCLE AND WE'RE
BUILDING ON A TRANSMISSION PLAN
THAT HAS SOME BROAD ARCHITECTURE
ALREADY BUILT INTO IT. SO WE'RE
SENSITIVE TO THOSE ISSUES. SO AS
A FOLLOW UP TO THAT, AND JUST
THINKING, WE OFTEN, YOU KNOW,
THE LEGISLATURE OFTEN COMES
THINGS COME FORWARD FROM THE
ADMINISTRATION OR THE OR OR THE
LEGISLATURE THAT CHANGE, YOU
KNOW, WHAT'S GOING TO HAPPEN OUT
THERE. AND I DON'T THINK ANY I
CERTAINLY WASN'T ON MY RADAR.
THE FACT THAT AS A CHAIR TALKED
ABOUT AI IS A HUGE CONSUMER OF
ENERGY, WE DON'T KNOW WHAT THE
NEXT THING IS OUT THERE. SO HOW
NIMBLE ARE YOU GOING TO BE ABLE
TO BE FOR WHEN THAT NEXT THING
COMES ALONG? BECAUSE WE, YOU
KNOW, WE HEAR FROM INDUSTRIES
LIKE AS WE MOVE TOWARDS AN ALL,
YOU KNOW, AN ALL ELECTRIC CAR
FLEET, JUST THE INFRASTRUCTURE
NEEDS AND THE ENERGY NEEDS FOR
THAT IS PRETTY SIGNIFICANT. AND
PUTTING A LOT OF PRESSURE ON, ON
UTILITIES AND OTHERS TO BUILD
THAT OUT. SO WE DON'T KNOW WHAT
THE NEXT THING IS. BUT HOW ARE
YOU? YOU KNOW, YOU HAVE A 20
YEAR FORECAST, BUT IS IT IS
THERE A BUFFER SOMEWHERE. YEAH.
YES THANK YOU, ASSEMBLY MEMBER.
I REALLY AM APPRECIATE KIND OF
THE QUESTIONING ON THE NEED FOR
LONG, LONGER TERM PLANNING. AND
I THINK THE, THE, THE CRUX OF
ONE OF THE THINGS THAT YOU'VE
IDENTIFIED AND GOES TO HOW WE
USED TO DO THINGS VERSUS HOW WE
ARE DOING THINGS NOW IN TERMS OF
ENHANCEMENTS AND MUCH OF OUR
PLANNING USED TO BE, KIND OF
NEAR TERM, WITH, WITH LITTLE TO
NO SCENARIO DEVELOPMENT AND
LARGELY FOCUSED ON SINGLE POINT
ESTIMATES BECAUSE WE HAD, A VERY
KIND OF STABLE, DEMAND GROWTH
AND STABLE SUPPLY CONDITIONS.
BUT OVER THE LAST FOUR YEARS,
ESPECIALLY THE AMOUNT OF WORK
THAT GETS DONE, WHEN WE WHEN WE
SAY WE DO A FORECAST, IT'S NOT A
SINGLE POINT ESTIMATE ANYMORE.
AND WHAT WE'RE DOING IS WE'RE
DOING A FORECAST FOR EACH SECTOR
AND FOR EACH SECTOR. WE ARE
DOING MANY DIFFERENT VARIATIONS
ON DIFFERENT SCENARIOS THAT
COULD OCCUR. SO WE HAVE THESE
MENU OF FORECASTS BY SECTOR AND
BY VARIABILITY. AND THEN
TOGETHER JOINTLY WE SAY WHAT
COMBINATION OF THOSE FORECASTS
SHOULD WE PLAN FOR IRP IN THE
NEAR TERM. AND WHAT FORECAST
SHOULD WE DO A LONG TERM STUDY
ON AND WHICH FORECAST SHOULD WE
USE OR SCENARIO SHOULD WE USE
FOR SENSITIVITY UNDERSTANDING.
SO ALL THAT IS CURRENTLY BEING
DONE AND THOSE SENSITIVITIES ARE
STUDIED ACROSS DIFFERENT
PROCESSES. AND WHEN WE TALK
ABOUT THESE PRODUCTS THOSE
PRODUCTS ARE NOT REALLY ONE
SINGLE SET OF DATA ANYMORE. THEY
REALLY DO TAKE INTO ACCOUNT A
LARGE, LARGE VARIABILITY. AND
SPECIFIC TO YOUR SECOND ELEMENT
OF THE QUESTION, HOW DO WE TAKE
INTO ACCOUNT THESE NEW, LOAD
GROWTH ISSUES? SO, STARTING
AROUND 2019, WHAT THE AGENCIES
HAVE STARTED DOING WAS WE
DEVELOP THESE SCENARIOS OF
ADDITIONAL GROWTH. WE MIGHT NOT
BAKE THEM IN FOR PROCUREMENT.
LET'S SAY, BUT WE DO PUT THEM
OUT FOR STAKEHOLDER INPUT. AND
AS WE BEGIN TO SEE THAT THOSE
THOSE KIND OF, GROWTHS ARE GOING
TO BE REAL, WE START BAKING THEM
INTO THE FORECAST. SO PART OF IT
IS DO WE HAVE VISIBILITY? YES.
ARE WE DECIDING TO USE A CERTAIN
LEVEL OF LOAD GROWTH FOR
PROCUREMENT? YES. IT DEPENDS ON
THE PROCESS, THE PUBLIC PROCESS.
WE GO THROUGH A STAKEHOLDER
PROCESS AND BRING THAT TO THE
COMMISSION FOR ADOPTION. I JUST
HAVE ONE FOLLOW UP QUESTION
RELATED TO THE STRATEGIC RESERVE
, AND SO YOU UNDERSTAND THAT
IT'S INCREDIBLY IMPORTANT, BUT I
THINK THAT THE, THE MULTIYEAR
COST FOR THE STRATEGIC
RELIABILITY RESERVE IS, I THINK,
LIKE 2.1 BILLION, WHICH SEEMS
LIKE A LOT OF MONEY FOR
SOMETHING THAT WE USE, HOPEFULLY
ZERO DAYS, MAYBE TWO. YOU DID
TALK A LITTLE BIT ABOUT
COMPARING THAT TO OTHER OPTIONS,
BUT CAN YOU SPEAK A LITTLE BIT
ABOUT WHAT WE'RE DOING TO
IDENTIFY OTHER, MORE COST
EFFECTIVE WAYS TO MAINTAIN A
STRATEGIC RESERVE? ABSOLUTELY.
SO I DID TALK ABOUT THE OTC
CONTRACTS, AND THAT WAS TO
RETAIN ASSETS THAT WOULD HAVE
RETIRED, THERE IS ALSO A
COMBINATION OF NEW ASSET BUILDS.
AND SO THAT WAS GOING TO BE A
BIT MORE EXPENSIVE, BUT THAT'S
ALSO LIMITED IN TERMS OF HOW
MUCH WE ARE ABLE TO ADVANCE,
THAT SECTOR. SO IN BROADENING
THAT OUT, ONE OF THE THINGS THAT
DWR HAS BEEN LOOKING AT ARE, ARE
THERE OTHER OPTIONS THAT WE CAN
PURSUE, ESPECIALLY CLEANER
OPTIONS, AND WE DID PUT FORWARD
AN RFI EARLIER THIS YEAR TO LOOK
AT SOME VARIOUS OPTIONS. AND WE
DID FIND IS FIRST AND FOREMOST
THERE IS SO MUCH BUILD OUT
HAPPENING ON THE NORMAL PLANNING
SIDE FOR RESOURCE ADEQUACY. ONE
OF THE CORE TENETS THAT WE HAVE
PER LEGISLATION AND THROUGHOUT
DWR, FOR THE ENERGY SIDE, IS
THAT WE DON'T WANT TO COMPETE
WITH THE PROCUREMENT THAT IS
ALREADY HAPPENING FOR THE LOAD
SERVING ENTITIES OR THE PUBLICLY
OWNED UTILITIES. SO THAT DOES
TAKE OUT QUITE A LARGE SWATH OF
RESOURCES, ESPECIALLY CLEAN
RESOURCES, SO KIND OF USUAL
SUSPECTS LIKE BATTERY STORAGE,
VERY POPULAR. BUT WE ALSO DON'T
WANT TO ADD ANY MORE PRESSURE TO
LOAD SERVING ENTITIES THAT ARE
TRYING TO OBTAIN THOSE RESOURCES
FOR THEIR PLANNING NEEDS. SO
UNFORTUNATELY, THAT DOES PUSH
DWR. IF IT'S IF IT'S NOT SORT OF
THE TRIED AND TRUE TRADITIONAL
GAS FIRED, IF IT'S NOT THE
NEWER, CLEANER TECHNOLOGIES LIKE
STORAGE OR EVEN HOW CLEAN
GENERATION. UNFORTUNATELY, I
THINK WHAT WE FOUND IS THAT THAT
DOES PUSH US OUT INTO SORT OF
MORE, LET'S SAY LESS COMMERCIAL
RESOURCES. THOSE THAT DON'T HAVE
THE PROVEN TRACK RECORD THAT
TEND TO BE A LITTLE BIT MORE
EXPENSIVE, AND BUT EVEN WITHIN
THE PORTFOLIO, WE'VE STEPPED OUT
A LITTLE BIT IN SOME OF THE
SMALLER GAS FIRED RESOURCES THAT
WE'VE RECENTLY CONSTRUCTED. AND
OAN. THOSE ARE STILL NATURAL
GAS FIRED, BUT WE SPECIFICALLY
SOUGHT OUT THAT TECHNOLOGY
BECAUSE IT IS MUCH LOWER
EMITTING, AND IT ALSO AS LOW
EMISSIONS, TO THE POINT THAT A
SIMILAR TECHNOLOGY WAS ACTUALLY
APPROVED BY CARB FOR THE
DISTRIBUTED GENERATION PROGRAM
CERTIFICATION. AND IN DOING SO,
THAT HAD ALLOWED US, AS WE GO
THROUGH THE LOCAL PERMITTING
PROCESS, TO REALLY GET THROUGH
SOME OF THE LOCAL AIR DISTRICTS
VERY, VERY QUICKLY, BUT AGAIN,
THAT'S NEWER TECHNOLOGY THAT'S
BEEN CONSTRUCTED IN CALIFORNIA
FOR THE FIRST TIME. AND SO WE'RE
EXCITED ABOUT THAT AND HAVING
THAT ON LINE FOR THE SUMMER. BUT
AGAIN, WE STILL HAVEN'T BROKEN
OUT OF NECESSARILY THAT NATURAL
GAS FIRED SPACE. SO IT'S BEEN
IT'S BEEN A CHALLENGE. WE ARE
LOOKING THROUGH AS MANY OPTIONS
AS WE CAN, INCLUDING
CONTRACTING, PARTNERSHIPS AND
ANY, YOU KNOW, CREATIVE
MECHANISM RAIMES THAT WE CAN
THINK OF AND COST SHARING AND
THINGS LIKE THAT. WELL, AND
ACTUALLY, ON THE TOPIC OF
CREATIVE SOLUTIONS, YOU KNOW,
THERE SEEMS TO BE A TON OF
POTENTIAL AND I GUESS THIS IS
SORT OF IN THE CONTEXT OF
STRATEGIC RESERVES, BUT ACTUALLY
JUST MORE BROADLY IN THE CONTEXT
OF MORE RELIABILITY AT A CHEAPER
COST. THERE JUST SEEMED TO BE A
TON OF OPPORTUNITY IN DEMAND
RESPONSE PROGRAMS, VIRTUAL POWER
PLANTS. CAN YOU AND MAYBE THIS
IS BEST DIRECTED AT PRESIDENT
REYNOLDS, I CAN YOU SPEAK A
LITTLE BIT ABOUT WHAT WE'RE
DOING TO UNLOCK THAT POTENTIAL?
YEAH, I'M HAPPY TO TALK ABOUT
IT. AND IT IS A REALLY EXCITING
BUT ALSO CHALLENGING AREA. AND I
THINK ONE WAY TO THINK ABOUT IT
IS THE COST OF RESOURCES THAT
ARE CERTAIN IN TIMES OF SCARCITY
IS HIGH, AND THAT'S WHAT WE'RE
TALKING ABOUT WITH THE STRATEGIC
RESERVE, BUT IT ALSO MEANS THAT
WE NEED TO LOOK AT ALTERNATIVES.
WE NEED TO LOOK AT OUR WHOLE
SUITE OF POTENTIAL SOLUTIONS AND
THE DEMAND SIDE IS SOMETHING
THAT WE'VE BEEN EXPLORING A LOT.
AND IS ALSO COMPLEX, BUT BUT HAS
A LOT OF POTENTIAL. AND SO PUC
HAS BEEN WORKING REALLY CLOSELY
WITH CEC ON ALL TYPES OF WAYS TO
HARNESS DEMAND RESPONSE. SO
EVERY FLAVOR, WHETHER IT'S
THROUGH RATES AND WE HAVE SOME,
EXPLORATORY RATE DESIGNS, THE
CAL FUZE RATES THAT WE'RE
WORKING ON AT CEC AND TESTING
THOSE, SEEING IF WE CAN GET
THOSE TO RESULT IN MODIFIED
DEMAND SHAPES, LOAD SHAPES THAT
ARE RELATIVELY CERTAIN, AND
WE'LL LOCK THAT DOWN MORE OVER
TIME. AS WELL AS THE EMERGENCY
PROGRAMS. WE TALKED ABOUT, OF
COURSE, IN MULTI-DAY HEAT WAVES,
YOUR ABILITY TO SHIFT PEOPLE
AWAY FROM AIR CONDITIONING WHEN
IT GETS HOT IN THE AFTERNOON
GETS LOWER AND LOWER OR WORSE OR
WORSE AS THE HEAT WAVE MOVES ON.
AND SO WE HAVE TO THINK ABOUT
THAT AS WELL. WHAT TYPES OF
CONSUMER BEHAVIORS ARE WE GOING
TO SEE IN THE FUTURE, AND CAN WE
EXPECT AND CAN WE GET TO WORK
THE ABILITY TO SHIFT LOAD WITH
HEAT PUMPS, WITH ELECTRIC
VEHICLES, ALL OF THE, THE
ELECTRIFICATION EFFORTS THAT WE
ARE WORKING ON ALSO PROVIDE HUGE
OPPORTUNITIES. SO THAT'S
SOMETHING TO THINK ABOUT IN THE
FUTURE. WE'LL HAVE MORE AND MORE
OF THOSE OPPORTUNITIES IN THE
FUTURE, AND WE'LL CONTINUE TO
LOOK AT WAYS TO USE THOSE IN
EMERGENCIES VERSUS JUST
INCORPORATING THEM INTO THE
NORMAL PLANNING, WHICH WE ALSO
WANT TO DO. JARED, THANK YOU SO
MUCH FOR THAT QUESTION, JUST TO,
ADD TO THE CONVERSATION, THE CC,
ALONG WITH PUC AND CAISO, WE
WERE ABLE TO ADOPT A 7000
MEGAWATT, DEMAND FLEXIBILITY
GOAL BY 2030, AND WE ARE
REQUIRED TO REPORT TO YOU ON A
REGULAR CADENCE ABOUT THE
PROGRESS OF THAT. AND, AND THE
NEXT STEP WOULD BE ON HOW BEST
TO OPERATIONALIZE THOSE 7000MW
MOVING FORWARD. AND YOU WERE
KIND OF GETTING TO THE QUESTION
AROUND, HOW ARE YOU LOOKING AT
THE COSTS OF THESE DIFFERENT
RESOURCES, IT IS A GOOD METRIC
FOR US TO THINK ABOUT HOW MUCH
DOES A KILOWATT COST YOU TO
RESERVE FOR A YEAR, SO AS, AND
DIRECTOR HÌ MENTIONED, THE OTC
POWER PLANTS, YOU KNOW, GIVEN
THE $10 PER MONTH, IS LOOKING AT
ABOUT $120, PER KILOWATT PER
YEAR. RIGHT? SO THAT TRANSLATES
TO IF THAT IS THE COST, 120
MILLION FOR 1000MW, RIGHT? SO
THAT'S KIND OF HOW MUCH YOU NEED
TO PAY. AND MOST RESOURCES IN
THE DEMAND RESPONSE, FRAME IS
AROUND THE SAME COST, SO IF YOU
LOOK AT THE BIB PROGRAM THAT PUC
ADMINISTERS WITH THE LARGE
USERS, THAT'S ABOUT $170, YOU
KNOW, A KILOWATT YEAR, VERSUS
THE DWR RESOURCE AT ABOUT 120.
AND WE COULD DEFINITELY DO
BETTER WITH THESE DIFFERENT
RESOURCES. WHAT CÁC IS EXPLORING
THROUGH THE DSG'S CONSTRUCT ARE
AROUND 120 TO $140 FOR THESE
DEMAND RESPONSE RESOURCES. AND
ONE OF THE CORE ELEMENTS IN WHAT
WE'RE LOOKING AT IS HOW DO YOU
ENSURE THAT THOSE RESOURCES
ACTUALLY SHOW UP? AND ONE,
EXPERIENTIAL DATA POINT WE HAVE
IS THAT WHEN THEY'RE BACKED WITH
SOME RESOURCE, LIKE, AS YOU
MENTIONED, VIRTUAL POWER PLANTS,
IF THERE'S A BEHIND THE METER
STORAGE AUDITS THAT THERE IS A
VEHICLE BATTERY. SO YOU SUDDENLY
GET A LOT MORE PERFORMANCE FROM
THEM RATHER THAN IT'S JUST
PURELY BEHAVIOR DRIVEN, AND SO
AGAIN, BEHAVIOR DRIVEN PROGRAMS
DOESN'T MEAN THAT THEY DON'T
PRODUCE. IT'S JUST THAT IF
YOU'RE THINKING ABOUT 1000MW,
MAYBE 200, 300 SHOWS UP
REGULARLY AND THE REST MIGHT NOT
SHOW UP. AND HOW DO YOU TAKE
THAT VARIABILITY IN YOUR PRICING
STRATEGY? SO WE ARE CAREFULLY
LOOKING AT THAT, AND WE'LL COME
BACK TO REPORT ON ON THE
PROGRESS. GREAT ASSEMBLY MEMBER
BENNETT. THANK YOU VERY MUCH.
AND I'LL TRY TO QUICKLY GO A FEW
OF A FEW THINGS. NUMBER ONE, TO
THE EXTENT THAT THE DEMAND
RESPONSE IS CLOSE TO THE SAME
PRICE AS RESERVES IT WITH THE
OTC PLANTS, CERTAINLY WE HAVE
THE GREAT ADVANTAGE OF YOU ONLY
HAVE TO PAY FOR THE DEMAND
RESPONSE IF WE HAVE THE BAD
EVENTS, WHEREAS IF WE RESERVE,
WE'RE PAYING THAT COST UP. SO
I'M CERTAIN YOU GUYS ARE SHARP
ENOUGH TO CALCULATE THAT IN.
BUT, IT WOULD BE AN ADVANTAGE
FOR THE STATE OF CALIFORNIA. THE
SOONER WE CAN DEAL WITH THE OTC
PLANTS IN THOSE DISADVANTAGED
COMMUNITIES, ONE, TWO, HAVE YOU
AND I WOULD ENCOURAGE YOU, IF
YOU HAVEN'T, IF YOU COULD DO ANY
KIND OF COST CALCULATION OF WHAT
WILL BE THE IMPACT TO CALIFORNIA
, COST WISE, OF HAVING
BLACKOUTS, OF HAVING THERE'S
SIGNIFICANT COST INVOLVED THERE.
AND SO WHEN PEOPLE TALK ABOUT
YOU'RE YOU'RE RAISING RATES
BECAUSE YOU'RE PUTTING ON THE
STRATEGIC RESERVE SO WELL, YOU
KNOW HOW MUCH YOUR RATES WILL GO
UP IF WE IF WE HAVE ANOTHER ONE
OF THOSE 20, 22, OUTAGES, WHAT
IS THE HIDDEN COST THAT ALMOST
PEOPLE DON'T DON'T SEE, THE
THIRD THING THAT, I'D LIKE TO
JUST ASK YOU TO CONSIDER IS THAT
WHENEVER YOU CREATE
ORGANIZATIONS, WHEN YOU EVER
CREATE DIFFERENCES, THE SENATE
VERSUS THE ASSEMBLY, THERE'S
ALWAYS TENSION THAT JUST IS IT'S
NORMAL. IT'S JUST ABSOLUTELY OUT
THERE. TO THE EXTENT THAT WE ALL
PROFESSIONALLY FIND WAYS TO WORK
WITH EACH OTHER, IT'S JUST
BETTER FOR EVERYBODY. AND I
WOULD OFFER THAT A LOT OF TIMES
AT THE LEGISLATIVE SIDE, WE FEEL
LIKE IT'S DIFFICULT TO GET
INFORMATION FROM THE EXECUTIVE
BRANCH, AGENCIES, ETC, AT AT THE
BUDGET HEARINGS, WE'VE, WE'VE
ENDEAVORED TO TRY TO NOT CREATE
A HOSTILE ENVIRONMENT WHERE
WE'RE GOING AFTER ANYBODY OR
PLAY CATCH, ETC. AND, AT THE
SAME TIME, IT CAN LOWER THE
TEMPERATURE IF EVERYBODY KNOWS,
HEY, WE ARE GOING TO GET THE
INFORMATION. MAYBE IT'S NOT
AVAILABLE RIGHT NOW. SO I WOULD
JUST POINT OUT THAT AT OUR LAST
BUDGET HEARING THAT WE HAD ON
THIS TOPIC, THE INFORMATION
WASN'T READY. AND IF IT COULD BE
SOME SORT OF AN UNWRITTEN POLICY
THèC THAT WE WILL GET WRITTEN
RESPONSES TO THE QUESTIONS THAT
WE HAVE. AND IT'S FINE TO SAY
THAT QUESTION IS SO HARD AND
WOULD TAKE US SO LONG. WE CAN'T
DO IT. THAT'S LEGIT. BUT AT
LEAST EVERYTHING ELSE, IF WE
KNEW IT WAS GOING TO COME, I
THINK IN GENERAL IT WOULD LOWER
IN GENERAL LEGISLATIVE
FRUSTRATION AND HOPEFULLY OUR
TREATING YOU GUYS PROFESSIONALLY
ALWAYS, ALSO ALSO HELPS INCREASE
EVERYBODY'S ABILITY TO DEAL WITH
THE NORMAL FRICTION THAT'S
ALWAYS GOING TO EXIST THERE. SO
THAT WOULD BE MY REQUEST. THANK
YOU VERY MUCH, JUST,
ASSEMBLYMEMBER BENNETT, THANK
YOU FOR THOSE THREE POINTS, JUST
ON THE FIRST ONE, JUST WANTED TO
QUICKLY NOTE THAT THE CAPACITY
PAYMENTS THAT WE'RE TALKING FOR,
DEMAND RESPONSE, THE INDUSTRY,
IS ASKING US TO DO THESE, THESE
CONTRACT CGRTS OVER A TIME
PERIOD, WHETHER WE ARE USING
THEM OR NOT ARE SIMILAR TO WHAT
WE WOULD DO, BECAUSE THAT WOULD
HELP THEM TO THINK ABOUT HOW
BEST TO STRUCTURE THOSE. BUT I
THINK YOU DO ALLUDE TO AN
IMPORTANT POINT THAT THESE
RESOURCES DO NOT HAVE LONG LEAD
TIME, RIGHT? SO IT DOESN'T TAKE
TWO DAYS FOR US TO WARM THEM UP.
SO IF WE CAN COME TO A PLACE OF
GOOD PERFORMANCE AND DEMAND
RESPONSE, THAT'S SPONTANEITY AT
WHICH WE CAN DEPLOY THEM IS A
HUGE BENEFIT. AND TO MOST OF
THESE ARE STRANDED ASSETS. SO IF
WE ARE USING STRANDED ASSETS TO
REDUCE, I THINK IT GOES A LONG
WAY IN CREATING THAT SUSTAINABLE
AND CLEAN PATHWAY. SO 100%
AGREE. I JUST WANTED TO ADD THAT
ADDITIONAL POINT. THANK YOU VERY
MUCH. WELL, I THINK THAT, SEEING
AND HEARING, NO FURTHER
QUESTIONS FROM OUR MEMBERS, THAT
CONCLUDES OUR PANELS. I JUST
WANT TO SAY THANK YOU SO MUCH TO
OUR PANELISTS FOR BEING HERE. AS
WE'VE ALL NOTED, WE'VE GOT SOME
INCREDIBLY AMBITIOUS AND
INCREDIBLY IMPORTANT CLIMATE
TARGETS FOR THE STATE OF
CALIFORNIA. WE HAVE A MONUMENTAL
CHALLENGE ON OUR HANDS TO
DELIVER ON THAT. AND I REALLY
APPRECIATED THE CONVERSATION AS
WE FOCUS ON THE WORK TO ENSURE
THAT WE DO THAT IN A WAY THAT'S
RELIABLE. AND I DO ALSO WANT TO
NOTE, BECAUSE I THINK IT'S
IMPORTANT FOR US TO PAUSE AND
RECOGNIZE AS WHAT WE HAVE
ACCOMPLISHED AND WHAT WE HAVE
ACHIEVED, AND AS YOU NOTED AT
THE BEGINNING OF THE
PRESENTATION, ANNUAL NEW
RESOURCES INSTALLED BY THE STATE
HAVE NEARLY DOUBLED OVER THE
COURSE OF THE LAST FOUR YEARS,
INCLUDING 10,000MW OF SOLAR OVER
THE LAST FIVE FROM WHAT WAS
ESSENTIALLY A STANDING START,
AND SO CERTAINLY WE HAVE, A LOT
OF WORK AHEAD OF US AND SOME
MAJOR CHALLENGES AHEAD. AND I
JUST WANT TO THANK YOU ALL FOR
JOINING US TODAY AND SHARING
YOUR PERSPECTIVE, YOUR
TESTIMONY, AND LOOK FORWARD TO
CONTINUING TO PARTNER WITH YOU
AS WE TACKLE THESE, THESE
CHALLENGES FOR THE STATE OF
CALIFORNIA. THANK YOU VERY MUCH.
THANK YOU SO MUCH, CHAIR. THANK
YOU. THANK YOU, MEMBERS AND WITH
THAT, WE'LL GO AHEAD AND OPEN IT
UP FOR PUBLIC COMMENT, PUBLIC
TESTIMONY. SO, IF ANYONE WOULD
LIKE TO PROVIDE PUBLIC COMMENT,
COMMENT, YOU CAN GO AHEAD AND
APPROACH THE MICROPHONE AT THIS
POINT, PLEASE STATE YOUR NAME
AND ORGANIZATION AND, YOU'LL
HAVE TWO MINUTES. LET'S SEE.
ANYONE ALL RIGHT. WELL OH, THERE
WE GO. ANYONE? OKAY. WELL SEEING
AND HEARING NO ONE IN THE ROOM
WISHING TO PROVIDE PUBLIC
TESTIMONY, THAT CONCLUDES
TODAY'S AGENDA. AND TODAY'S
HEARING OF THE ASSEMBLY
COMMITTEE ON UTILITIES AND
ENERGY IS ADJOURNED