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The California Public Utilities Commission (CPUC) issued an order denying motions for rehearing and for partial stay by California Community Choice Association (CalCCA), jointly, Shell and Alliance for Retail Energy Markets (ESP Parties), and several Joint Parties (12/14/23). 

In California, all load-serving entities (including community choice aggregators and retail electricity suppliers) have resource adequacy obligations to meet.

In the Order the Commission:

• Noted it implemented the rule prohibiting “any community choice aggregator (CCA) or electric service provider (ESP) with a deficiency of greater than 1 percent of its California – Electricity – Supplier Issues system resource adequacy (RA) requirement on a month ahead RA filing during the previous two calendar years from expanding its operations or taking on any new customers for the following year” due to “repeated failure by load-serving entities (LSEs) to meet their RA requirements while seeking to expand their service territories”; 
• Rejected CalCCA’s argument that it lacked jurisdiction to do so on the basis that the California legislature exercised its plenary power to authorize CPUC to “‘do all things, whether specifically designated in [the Public Utilities Act] or in addition thereto, which are necessary and convenient’ in the exercise of its jurisdiction over public utilities,” and that this authority extends to CCAs as well; 
• Rejected and ESP Parties’ arguments that “that the RA Deficiency Rule violates the Direct Access (DA) statutory scheme because we may not bar retail customers from seeking service from registered ESPs” on the basis that, while “Originally, Direct Access was intended to be a choice available to all customers,” following “the 2001 energy crisis, the State capped the amount of load that can be served by Direct Access providers and limited new enrollment to non-residential customers,” with the most current statute providing that CPUC “shall authorize individual retail nonresidential end-use customers to acquire electric service from other providers in each electrical corporation’s distribution service territory, up to a maximum allowable total kilowatt-hours annual limit”; and 
• Rejected Joint Parties’ and ESP Parties’ arguments “that the RA Deficiency Rule discriminates against ESPs,” responding that “We are treating all LSEs the same pursuant to section 380 by requiring that all LSEs comply with their RA requirements.

As background the CPUC opened a rulemaking proceeding to oversee the resource adequacy program, consider program reforms and refinements, and establish forward resource adequacy procurement obligations. The proceeding will follow two tracks – an implementation track and a reform track. 

The Implementation Track will include: 

1. the adoption of Local Capacity Requirements (LCR) for LSEs for the 2023-2025 and the 2024- 2026 RA compliance years;
2. adoption of Flexible Capacity Requirements (FCR) for the respective LSEs for the 2023 and 2024 RA compliance years; 
3. consideration of potential modifications to the Central Procurement Entity (CPE) structure and process, including implementation details of the “shown” resource component of the hybrid framework and changes to the CPE timeline; 
4. consideration of modifications to the Planning Reserve Margin (PRM); 
5. consideration of potential modifications to Qualifying Capacity counting conventions and requirements for third-party demand response resources, hybrid resources, wind and solar resources, and other resources; 
6. modification to Effective Load Carrying Capability (ELCC) values; and 
7. other refines to the resource adequacy program. The Reform Track will include examination of the “broader resource adequacy capacity structure to address energy attributes and hourly capacity requirements, given the increasing penetration of use-limited resources, greater reliance on preferred resources, rolling off of a significant amount of long-term tolling contracts held by utilities, and material increases in energy and capacity prices experienced in California over the past years.”

Order (12/18/2023)
R2110002  (10/07/2021)

(Order Instituting Rulemaking to Oversee the Resource Adequacy Program, Consider Program Reforms and Refinements, and Establish Forward Resource Adequacy Procurement Obligations.)