California’s New Electric Plan Doesn't Cut Enough Carbon

The California Public Utilities Commission (CPUC) today approved a plan that isn’t likely to cut enough carbon emissions from our state’s electricity consumption to meet California’s 2030 emissions reduction target. It also doesn’t set California’s electricity providers on track to be generating zero-carbon electricity by 2045. Fortunately, the CPUC wisely left the door open to develop an alternate plan that would get us much closer to where we need to be.

Despite recommendations to the contrary from the entire environmental community, multiple electricity providers, and even the CPUC’s own Public Advocates Office, the commission adopted a primary plan with a relatively high emissions scenario as the state’s reference system plan (RSP) to guide California’s electricity providers for the next two years. (The list of everyone who opposed the high emissions plan and their rationales is at the end of this blog.)

And, in a wise, last-minute change, the commission said that it would also consider an alternative plan for the next two years if the state’s electricity providers demonstrate that they can cut even more emissions. 

This CPUC decision concludes the first phase of the 2019-20 Integrated Resource Planning proceeding in which the CPUC adopts a plan to guide the state’s electricity providers--the investor-owned utilities, Community Choice Aggregators (CCAs), and direct service providers--on how to best meet future electricity demand and reduce carbon emissions. In the second phase, each electricity provider will develop and submit by September:

  • a plan that conforms with the CPUC’s high emissions RSP, and
  • an alternate lower emissions plan that’s better for the environment and better complies with the goals of our state’s climate policy.

By the end of the year the CPUC will stitch these individual plans together to develop a statewide electric plan. It is essential the CPUC seize this opportunity and work with the state’s electricity providers to fully develop this alternative lower emissions plan and adopt it as California’s preferred plan. Otherwise, we risk losing valuable time in our fight against the climate crisis.

Pat Remick, NRDC

The Adopted Plan Falls Short of 2030 Climate Goals

Senate Bill 350 (SB350) requires the CPUC to develop a plan to reduce electric sector emissions to 40 percent below 1990 levels. By conducting an economy-wide analysis, the California Air Resources Board (CARB) determined that means that the electric sector must reduce its carbon emissions to between 30 and 53 million metric tons (MMT) by 2030. Unfortunately, the CPUC’s primary plan is very likely to lead to an electric grid that emits more than 53 MMT of carbon in 2030. 

The CPUC’s RSP is mistakenly labeled a 46 MMT by 2030 scenario, whereas in actuality it leads to 51 MMT carbon emissions in 2030 ,which is only 3 percent below the law’s limit. Moreover, the 51 MMT is a best-case scenario under ideal circumstances. Also, carbon emissions forecasts are different from, and usually lower than, real-world emissions mainly because electric models simulate the electric grid as an ideal electric market; the way the electric grid really works is vastly less efficient and, therefore, more emissions-intensive than what models determine. Accordingly, it’s no surprise that recent comparison of emissions forecasts to reported emissions show that models underestimate carbon emissions from the electric grid.

There are two other major sources of uncertainty that models need to account for. Firstly, although electric grid models apply best available data and assumptions about the future, such as average weather and average customer demand for electricity, reality is bound to differ from these assumptions. Secondly, all models circumvent the complexities of our electric grid by making simplifying assumptions about where and how energy is produced and consumed. 

For all these reasons, any emissions reduction plan must contain enough “headroom” to ensure that California’s electric sector can comply with our legally mandated 2030 emissions reductions targets. The current CPUC current plan lacks headroom and cannot be relied upon to guide emissions reductions in the electric sector.

The CPUC’s Plan Also Falls Short of 2045 Goals

The RSP needs to do more than just barely comply with California’s 2030 targets. It should also chart the best possible course toward a zero-carbon grid by 2045 as required by Senate Bill 100 (SB100), and former Governor Brown’s Executive Order that set a goal of getting to a carbon-neutral economy. Unfortunately, the RSP doesn’t accomplish this either. Even the CPUC’s own analysis indicates it misses the mark by at least 20 MMT—equal to the annual pollution from 4.32 million gas-guzzling cars.

The CPUC deliberated over three scenarios before adopting the RSP. (1) The RSP: the highest of the three emissions scenarios; (2) a 30 MMT by 2030 low-emissions scenario; and (3) an in-between scenario which the CPUC picked as the alternate option to demonstrate electricity providers can feasibly reduce more carbon that what the RSP implies. The best scenario to adopt would’ve been the 30 MMT by 2030 scenario. The CPUC had already conducted extensive analysis on this low emissions scenario and therefore had all the information it needed to adopt this target. Here’s why adopting the 30 MMT total target for California’s investor-owned utilities, Community Choice Aggregators (CCAs), and direct service providers would’ve been the right thing to do.

  • To get to a carbon-neutral economy by 2045 we need a zero-carbon electric sector, meaning we need to reduce its emissions at a very rapid pace. A 30 MMT in 2030 target puts us on a path to efficiently get to a zero-carbon electric grid by 2045.
  • Reducing more emissions now is urgently needed to fight climate change.

The CPUC Must Work with Electricity Providers to Develop a New Plan

The decision states that the CPUC will study the alternative plan to better understand the practical implications of reducing emissions beyond what the RSP requires. The CPUC needs to embrace and then adopt the lower emissions target. To accomplish this by the end of the year, when the final phase of this IRP cycle concludes, the CPUC must start working with electricity providers now.

Reductions in carbon emissions are not only essential to curb climate change and reduce its harmful impacts on the Golden State; solutions developed in California to cost-effectively reduce carbon emissions will have an outsized impact in the global fight against climate change. This is because these novel solutions demonstrate that reliable, low-carbon, and affordable electricity is within our grasp if we dare reach for it.

List of 16 Parties Who Recommend a Lower Emissions Scenario as the RSP, the Parties’ Rationale, from their Respective Comments.

Party Preferred Scenario Rationale
Defenders of Wildlife 30 MMT “46 MMT will not position California to meet greenhouse gas (GHG) goals.” 
“30MMT is the appropriate GHG target.”
“The 30 MMT target is most aligned with the procurement required to attain SB 100’s 2045 goals per Commission analysis.”
“Accurately setting the target, challenging as it is, will spur additional investments and innovations to meet that goal.”
Hydrostor 30 MMT “Such a target (30 MMT) better sets California on the path to achieve its Senate Bill (“SB”) 100 objectives.”
“Electrification could substantially increase electricity demand sooner than what is anticipated.”
“A 30 MMT GHG target by 2030 would also allow for the greatest participation of potential resources resulting in the most cost-effective procurement outcome compared to potentially rushed procurements in the period after 2030 in order to meet SB100 objectives by 2045.”
Vote Solar 30 MMT “The 46 MMT planning target is insufficient to meet the decarbonization goal required by SB 100.”
“30 MMT GHG planning target will drive the selection of more long duration storage earlier, as an alternative to the retention of out-of-market natural gas capacity, and better prepare the electric sector to serve the increasing load from transportation and building electrification after 2030.”
Environmental Defense Fund 30 MMT “California’s electric sector decarbonization goal requires deeper reductions to be established now.”
“The Commission should revise the Proposed Decision to adopt a 30 MMT GHG emissions target for 2030.”
“The downsides of establishing the lower target are minimal, and the consequences of having the target be set too high at 46 MMT include lost time for new procurement, higher costs to customers, and a diluted procurement signal for new generation to come online.”
“EDF is concerned that the Commission may be setting a higher target of 46 MMT in part because it is worried about recent market shifts from investor owned utilities to Community Choice Aggregators (CCAs).”
Eagle Crest Energy 30 MMT “30 MMT scenario, which is more realistic in light of SB 100 clean energy goals given the slow pace in achieving the GHG reductions in other state economic sectors to date, including in particular transportation.”
California Energy Storage Alliance 30 MMT “Due to the continued preference for imports within SERVM, the Commission should evaluate using a more stringent greenhouse gas (“GHG”) emissions target to minimize the risk of not meeting the state’s Senate Bill (“SB”) 350 and SB 100 goals. CESA continues to support the use of a 30 million metric ton (“MMT”) case for the RSP.” 
“The Commission recognizes that these electrification initiatives pose risks; however, the PD finds a 46 MMT target is more suitable at this time even in the face of expected increase in load. CESA believes this logic is flawed, as it would create a mismatch between the expected load and the zero-carbon resources available in the state"
California Environmental Justice Alliance (“CEJA”) and the Sierra Club 30 MMT “This portfolio must be rejected (46 MMT) because it: (1) most likely does not fall within the requirements of the Scoping Plan set by CARB; (2) fails to minimize criteria pollutant emissions; (3) does not set California on a trajectory to meet SB 100’s clean energy targets; and (4) fails to meet statutory requirements to not increase emissions when Diablo retires.”
California Efficiency + Demand Management Council 30 MMT “The proposed target of 46 MMT falls within the ranges outlined by the California Air Resources Board (“CARB”), we base our concerns on the evidence which suggests that the Commission’s own modeling tools tend to under-predict greenhouse gas (“GHG”) emissions compared to real-world emissions data which tend to be substantially higher.”
“The 30 MMT target facilitates building and procuring resources on the most efficacious timeline to reach both the 2030 and 2045 goals.”
“The 46 MMT target allows substantially more carbon-emitting electric generating resources versus a cleaner portfolio of resources that state policy and laws prioritize.”
“By allowing the 46 MMT target, the Commission is systematically ignoring the role that efficiency and demand management resources can play in California’s clean carbon future.”
Peninsula Clean Energy Authority, Marin Clean Energy, San José Clean Energy 30 MMT “The Commission should find that the proposed investment supporting the 30 MMt is appropriate and commit to working to deliver policies and regulatory stability to minimize the cost of achieving this target.”
“The Commission should not adopt either the 46 MMt Default or the 46 MMt Alternate case because it will likely result in stable or increased emissions between 2022 and 2030. In particular, the Commission estimate of GHG emissions may be too optimistic if modeling systematically underestimates actual emissions. For example, comparison of the CAISO reported emissions and RESOLVE emissions in the 2018 cycle suggests that the RESOLVE modeling estimates may be many MMts lower than actual emissions.”
The Protect Our Communities Foundation 30 MMT “POC cannot endorse the 46 MMT GHG target proposed in the PD, as the 46 MMT GHG target fails to lower GHG emissions as quickly as possible. Pursuant to Executive Order B-55-18 (“EO”), the Commission should adopt a 30 MMT GHG target in this cycle.”
“The PD however uses the highest possible GHG target of 46 MMT rather than the lowest considered target of 30 MMT without sufficient analysis or support. The decision ignores the still applicable Executive Order to achieve carbon neutrality as soon as possible.”
Natural Resources Defense Council 30 MMT “The Commission should adopt the low emissions, 30 MMT scenario, to comply with CARB’s recommendation and put California's load serving entities (LSE) on the best path towards SB100 compliance.”
“Supporting the 30 MMT scenario in this cycle will also give the LSEs, especially newer Community Choice Aggregators, adequate time to transition to a zero-carbon grid by 2045 in a smooth and cost-efficient manner.”
Union of Concerned Scientists 30 MMT “The Commission should choose a lower electric sector GHG emissions target to ensure California achieves its 2030 GHG emissions reduction goals.”
“The 46 MMT target will not put the state on track to achieve its 2030 climate goals.”
“Due to inaccuracies in GHG accounting with the Commission's modeling tools, the 46 MMT portfolio will likely produce emissions outside of the CARB range. The Commission should adopt a 30 MMT electric sector emissions target because of these inaccuracies.”
Southern California Edison 38 MMT “The proposed 46 MMT planning target will not put the electric sector on an appropriate path to meeting California’s Senate Bill (“SB”) 32 goals for GHG reduction by 2030 and SB 100 goals for carbon neutrality by 2045.”
“Planning to a 46 MMT target for 2030 puts California at risk of not setting a feasible and least-cost path to meeting the necessary GHG reduction targets through 2045.”
“Setting a GHG target approximately 10 MMT too high in the electric sector means that not only will other sectors (e.g., transportation, buildings) need to make up the difference with more expensive abatement alternatives.”
“SCE urges the Commission to adopt a 38 MMT GHG planning target for 2030 for all LSEs in the 2019-20 IRP.”
Center for Energy Efficiency and Renewable Technologies 46 MMT GHG target is too high “The Proposed Decision claims that the resulting 46 MMT/year 2030 GHG emission goal keeps LSEs on track to meet the state’s Senate Bill (SB) 100 goals. However, the 46 MMT/year goal is too high to ensure a smooth transition to meet those policy goals.”
“Using the high 46 MMT/year GHG emission reduction baseline, and relying on gas generation to get us there, locks California onto a path that will prevent the state from reaching its SB 100 goals on time and in the most cost-effective manner.”
American Wind Energy Association (AWEA) Revisit the selection of a 46 MMT Emissions Target “The selection of the 46 MMT target will not fulfill the statutory requirement for a 2030 GHG emission reduction target nor the recent amendments to Section 454.52 of the Public Utilities Code to integrate the statutory requirements of SB 100.”
“The CPUC should revisit its selection of a 46 MMT target and ask whether the stool will stand when the Commission is faced with the selection of a PSP that is compiled from plans that do not collectively achieve Section 454.52(a)(1)(A) of the Public Utilities Code.”
California Wind Energy Association 46 MMT GHG target is relatively high “By adopting a relatively high 46 MMT GHG target and by using the 2017-18 RSP for transmission planning, the proposed RSP refrains from taking any concrete steps toward the limited and preliminary diversity resources identified.”

About the Authors

Mohit Chhabra

Senior Scientist, Climate & Clean Energy Program

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