Joint Reliability Plan
Track 1: Multi-year Resource Adequacy Requirement

 

Background

On May 20, 2014 the CPUC issued a Ruling in its Joint Reliability Plan (JRP) Rulemaking, commencing Track 1 to review the need for a multi-year approach to Resource Adequacy. Historically, the CPUC has only planned one year ahead for reliability need. The CPUC proposed to consider expanding the current Resource Adequacy program to acquire capacity resource needs 2-3 years prior to the compliance delivery year. The CPUC stated that Track 1 would: 

  • Determine need for proposed new policy. 
  • Review costs and benefits 
  • Design requirements in the context of preferred resources and resource characteristics 
  • Determine program requirements and rules. 

In June 2014, the CPUC issued a Decision in the Resource Adequacy proceeding which created an interim framework for Flexible Capacity procurement for the years 2015 – 2017, after which a permanent framework will be created. Flexible Capacity is required in order to balance the electric grid as more intermittent renewable resources are brought online.  

On October 2, 2014, the CPUC issued its Staff Proposal on multi-year Resource Adequacy, which supported the CPUC’s consideration of whether multi-year Resource Adequacy requirements are necessary or beneficial to ensure grid reliability. The Staff Report identified four pivotal issues, finding: 

  • Existing Reliability Framework:  Resource Adequacy and Long Term Procurement Planning processes have supported grid reliability and the CPUC should consider whether this existing framework and generation resources can adapt to future system needs.  
  • Available Flexible Capacity:  Data showed an over-supply of contracted Flexible Capacity for the 2014 - 2016 timeframe although more information is needed from the current Resource Adequacy program to determine whether greater regulatory intervention is needed, although there is no evidence to suggest that the current generation fleet cannot meet the system’s highest possible demand. 
  • Inefficient Retirements:  Discussed using a factor test to determine whether there may be resource retirements at any point in the five years following CPUC approval that create reliability risks, and whether new procurement policies, such as multi-year RA, may be justified. 
  • Existing Forward Procurement Practices:  Data showed that the existing reliability framework has resulted in a significant quantity of forward procurement and that multi-year RA requirements may have minimal effect.
    The Staff Report presented a menu of proposed options for multi-year RA requirements and proposed consideration of conditional triggers for instituting requirements.
     

On January 16, 2015, the CPUC issued a Ruling suspending Track 1 of the Joint Reliability Plan in order to first develop a more permanent Flexible Capacity procurement program to replace its 2015 - 2017 interim solution. 

 

ORA Position  

ORA supports safe and reliable electric service at the lowest possible costs. ORA’s Risk of Unplanned Retirement analysis and Production Cost Simulation study do not indicate that there are currently any generation resources that are both at risk of unplanned retirement and critical for electric grid reliability in 2021. Given ORA’s Retirement analysis and that data show that there is an oversupply of both available and contracted capacity for the 2014 - 2016 timeframe, it is, therefore, unnecessary to adopt multi-year RA requirements at the present time. The CPUC should not need to examine multi-year RA need until at least 2017 when the CPUC has already scheduled a review of its interim flexible capacity requirements in the Resource Adequacy proceeding.   

Accordingly, ORA supports the CPUC’s January 2015 Ruling to suspend Track 1.   

See ORA’s November 12, 2014 Comments on the CPUC’s Staff Report.  

See ORA’s October 30, 2014 Comments in response to the CPUC’s May 2014 Ruling.   

See ORA's February 20, 2014 Comments on the CPUC's Preliminary Scoping Ruling.  

 

Proceeding Status

See the Proceeding docket. 

Track 1 - Currently suspended. 

 

Resources

 ORA JRP Portal