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California's Renewables

The rate at which California builds new sources of renewable energy has slowed dramatically over the last few years. In 2013, we were adding over 3,000 MW a year; in 2017, we only added 546 MW. The reason for this slowdown is that conventional utilities (like PG&E) have been losing customers to Community Choice Aggregators (like MCE). The conventional utilities don't want to add capacity because it's expensive and their revenues are down. The CCAs have a hard time adding capacity because they're still small and young.

This has set the stage for a deeper problem of reliability. The young, financially fragile CCAs have mostly been focusing on low-cost renewables like wind and solar, and haven't been building the energy storage and firm capacity needed to integrate those renewables with the grid. The conventional utilities haven't been building them either, for the same reason they aren't building renewables. This is limiting how much of our electricity can come from renewables, which may prevent us from achieving our 2030 goals.

In order to fix this, Asm. Eduardo Garcia introduced AB 56, which would create a backstop procurement entity. This would be a state body that directly procures needed resources, like energy storage, that aren't being procured by conventional utilities or CCAs (or any similar type of organization). We don't know for certain that this will be required, since the state can also just order utilities to procure things, but it could potentially play an important role. It's better to set up an emergency Plan B now, when we don't need it, rather than wait until we're in the middle of a crisis.

The bill has already gotten through the Utilities and Energy and Natural Resources committees in the Assembly, and is currently in the Appropriations committee. Earlier this week, Appropriations moved it to the Suspense File, which is where it puts bills that will be worked on after the budget has been prepared.

This is a bill to pay close attention to. It's important for ensuring that we maintain grid reliability while reducing greenhouse gas emissions, and it's likely to see substantial pushback from Republicans because it involves direct state ownership of energy resources. We may end up having to go to the trenches to get this one through.

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