The California Public Utilities Commission is proposing a strategy to replace the electricity generated by the retired San Onofre Nuclear Generating Station (SONGS) with a mix of resources, including energy efficiency.
The replacement strategy is a critical issue for communities within the greater Los Angeles region and in San Diego because their health and environment will be directly affected by the Commission’s decision.
The question before the CPUC was: Will the replacement of SONGS — a 2,200 MW power plant — be met with excessive fossil-fueled power plants or clean energy resources? Yesterday the CPUC struck a balance by first relying on energy efficiency (the cleanest, cheapest, fastest energy resource to meet our needs) and other “preferred resources” that have lower environmental impacts (like demand response and renewable energy) to fill the needs left by the 2013 retirement of SONGS. Second, the CPUC went to a mix of resources to meet the remaining portion of the energy needs.
Overall, the CPUC is moving in the right direction by relying on energy efficiency and other preferred resources to replace the retired nuclear plant, although it is critical that the commission improve its proposal by correctly accounting for the contribution of preferred resources. In summary, the Commission:
- Relies significantly on clean energy resources in its proposal
- Authorizes no additional mandatory gas-fired generation in its proposal
- Should modify the proposal to explicitly account for the additional 733 MW of energy efficiency that is reasonably expected to occur
- Should improve the accounting of other preferred resources and transmission solutions
CPUC First Relies on Clean Resources to Replace SONGS
In this proposal, the CPUC plans to rely on 600 megawatts (MW) of clean “preferred resources” and energy storage to meet the reliability needs in southern California created by closing SONGS.
That’s a significant amount of power—it’s equivalent to two medium-sized fossil-fueled power plants. And it’s just a minimum amount of preferred resources, the utilities can do more.
Preferred resources” are those that the state has prioritized because there are fewer environmental impacts than conventional generation from natural gas. For example, energy efficiency – doing more with less energy — is the highest priority resources of all the “preferred resources” because it is the cleanest, fastest, cheapest way to meet Californians’ energy needs. Demand response (reducing energy consumption at key points during the day) and renewable resources such as wind and solar are also “preferred resources.” Energy storage (like batteries, pumped hydro, flywheels, among others) is also included in this 600 MW of preferred resources the CPUC plans to authorize.
CPUC Also Relies on a Mix of Resources to Replace Part of SONGS
The CPUC also proposes to use 400 MW to 800 MW of new resources, which could come from any type of energy resource, to meet needs in the SONGS region. These resources would be procured through what is called an “all-source request for offers (RFO).” In the past, all-source RFOs historically resulted in procurement of gas-fired generation because preferred resources were not put on a level playing field to compete. However, in the most recent all-source RFO stemming from the CPUC’s procurement work, Southern California Edison worked to change this dynamic, and the current CPUC proposal has language requesting that the utilities continue this work to allow for fair competition among the resources. It will be important that the CPUC and utilities prioritize this work in order to ensure that preferred resources get a fair shake in the proposed all-source RFOs.
Where Will the Rest of the Power Come From?
Although SONGS was a 2,200 MW plant, the CPUC proposal only authorizes a total of 1,000 MW to 1,400 MW of new resources to replace it. What about the rest?
The studies conducted to determine the exact amount of resources needed are very technical and complex and there are a variety of reasons why SONGS replacement resources are less than 2,200 MW. Primarily it is due to i) demand-side resources like energy efficiency reducing the amount of energy demanded, and ii) improvements to the transmission networks.
At its heart, the major problem caused by the retirement of SONGS was a loss of voltage support (the ability to maintain voltage levels) in the local areas around SONGS. That problem can be solved through demand side resources, like energy efficiency, which reduce the amount of voltage support needed in the first place; through transmission resources, like many of the improvements already undertaken by the California Independent System Operator (ISO), in addition to planned improvements in the ISO’s new Transmission Plan; and through generation resources, which are addressed in this CPUC proposal. Because there are transmission and demand side resources that have contributed to replacing SONGS, the Commission does not need to rely excessively on generation resources.
The Proposal Should Explicitly Rely on All Reasonably Expected to Occur Energy Efficiency
In the proceeding, the model results that used the best resource estimates available showed there is no clear need to authorize additional gas-fired generation at this time, (beyond the 1,500 MW of gas-fired generation already authorized in 2013). However, the commission’s proposal does not use those best estimates for all the various resources. The commission should instead change its proposal by explicitly relying on the (conservative) amount of cost-effective energy efficiency that is reasonably expected to occur and included in the record. That amount is 733 MW of additional energy efficiency, a conservative estimate of savings from building efficiency standards, appliance efficiency standards, and utility programs. Then, the commission can make other adjustments as necessary.
The Proposal Should Correct How It Accounts for Contributions from Other Preferred Resources and Transmission Solutions
Other adjustments include improving the accounting for all other preferred resources, like demand response, solar energy, and for energy storage as well. The proposal currently assumes that out of all the preferred resources, energy storage, and transmission improvements on the record, only one or two of those solutions will materialize. This approach is overly conservative, unsupported in the record, and reduces the contributions of those non-gas-fired resources by 80% to 90%. Instead, the commission should make a determination about how much of each resource is reasonably expected to occur, based on facts in the record, and then rely on those resources.