Two Steps Forward, One Step Back: CPUC Plans for New Power Plants in San Diego

The California Public Utilities Commission authorized nearly 350 Megawatts of new and upgraded power plants in San Diego, a decision that was based on an incomplete analysis that excludes a significant portion of expected energy savings from efficiency upgrades. The move is a step backward after the Commission unanimously voted earlier this year to look first to energy efficiency to meet Southern California electric needs.

State law requires utilities to rely on energy efficiency before turning to dirtier and costlier alternatives like fossil fuel generation. But recent disconnects between the state’s energy agencies called into question whether California will continue to rely on efficiency to avoid new electricity generation.

The CPUC’s decision for new power generation in San Diego is a prime example of the problem arising from those disconnects. The California Independent System Operator’s modeling of electric system needs, which formed the basis for the CPUC’s ruling, excluded all savings from future efficiency, despite San Diego Gas and Electric’s ongoing $75 million annual investments in efficiency. The CPUC attempted to compensate for that omission but used an estimate that significantly undercounted the expected future energy savings.   

Recent Signs of Progress

This decision comes on the heels of two very important recent steps forward on using efficiency to offset power plants. First, following the California Senate Energy Committee’s hearing in January, the CPUC, ISO and California Energy Commission committed to improving their coordination on this critical issue. NRDC, together with the consumer advocate groups, the Utility Reform Network and the Division of Ratepayer Advocates, support many aspects of the joint agencies’ detailed commitments.

Second, the February decision where the CPUC relied on 100 percent of expected energy efficiency in ruling on how much new generation is needed in the Los Angeles area over the next ten years. In that decision, the CPUC overcame the same analysis shortcomings by relying on an alternative analysis that was not available in the San Diego case. 

Problems in San Diego

Unfortunately, the CPUC’s ruling on the need for new power plants in San Diego does not fully implement the joint agencies’ recent commitment to improve reliance on energy efficiency in place of fossil fueled power plants.  

The CPUC included only about 150 Megawatts of savings over the coming decade, instead of the 600 Megawatts in savings estimated by the Energy Commission and SDG&E. That means that at least 450 Megawatts of energy efficiency was omitted.  Some of these major policies that were excluded were the CEC’s:

  • Lighting efficiency standards that took effect in 2011;
  • Television efficiency standards that took effect in 2012; and,
  • 2010 and 2013 building code improvements.

Including these energy savings in the Commission’s analysis shows that it is unclear whether there is actually any need for new generation right now.  Of course, this analysis pre-dated the outage of the enormous nuclear plant at San Onofre, which may create a need for alternatives if it remains out of service. However, the CPUC is already conducting such an analysis on a parallel track, and will have initial results coming out this year.

All energy agencies know that  energy efficiency is the cheaper and cleaner alternative to power plants. As the joint energy agencies seek to make progress in relying on this clean energy resource, it is essential that the CPUC take full advantage of efficiency’s potential to avoid the need for new power plants moving forward. 

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