Distributed Energy Resources

Calif. PUC OKs cost recovery tied to utility DER contracts

The California Public Utilities Commission has given the green light to Southern California Edison to recover in customer rates the cost of contracts for “innovative clean energy resources to offset the need for new natural gas generation,” the PUC said on July 12.

Specifically, the CPUC approved Southern California Edison cost recovery for 19 contracts totaling 125 megawatts of preferred resources, including distributed energy resources, such as energy storage.

The utility, which is a subsidiary of investor-owned Edison International, first began a preferred resources pilot request for offers (RFO) following the unexpected retirement of the San Onofre Nuclear Generating Station and the anticipated closure of once through cooling plants, which represented 7,000 MW of generation critical to system and local reliability, the PUC said.

The San Onofre nuclear power plant was shut down in 2013.

The July 12 decision finds that DERs can be used to offset localized load growth and that the utility’s preferred resources pilot will help determine to what extent an integrated portfolio of preferred resources deployed at a high concentration can operate “just as reliably as a traditional gas-fired power plant and meet future customer needs in a clean manner,” the commission said.

The 125 MW of preferred resources will interconnect to lower voltage level substations and circuits, electrically in-line with either the Johanna A-Bank substation or the Santiago A-Bank substation – referred to as the “J-S Region.” Southern California Edison has said that customer electricity demand in the J-S Region is growing.

The utility said that load growth in the region presents an opportunity for it, through its preferred resources pilot, to:

  • Demonstrate the ability to site locally preferred resources to offset the growing load in the J-S Region, driven by new commercial and residential developments and business expansion;
  • Operationally integrate and manage DERs as they potentially become more than 20% of the resources serving the J-S Region; and
  • Enable customer choice in meeting their energy needs with cleaner preferred resources by providing sourcing avenues through alternative energy service markets.

The utility said that, while its principal purpose for launching the preferred resources pilot RFO is to support the preferred resources pilot endeavor, an equally motivating objective is to procure preferred resources to support other important state-led endeavors that focus on the emerging modernized grid.

The July 12 decision is the second made under the preferred resources pilot.

The proposal voted on by the CPUC is available here.