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California Governor, Lawmakers Reach Agreement on Set of Energy Proposals

California Gov. Gavin Newsom and the California Legislature reached an agreement on a set of proposals from Newsom that, among other things, will allow for the state to create a central buyer to procure clean electricity for the grid.

Under the agreement, announced on Aug. 31, the central buyer would focus on sources like offshore wind and long-duration storage to diversify the state’s energy portfolio.

The package comes in the form of an amendment to AB-1373, which was amended in the California Senate on Aug. 31.

The agreement also aligns the state’s primary clean energy planning and procurement programs – its renewable portfolio standard, resource adequacy and integrated resource planning – with California’s 100% clean electricity by 2045 goal.

The agreement also includes new measures to help prevent the misuse of the state’s new Strategic Reliability Reserve which is designed to maintain grid reliability during extreme weather events, like heatwaves.

The Strategic Reliability Reserve was developed in 2022 to expand the resources capable of managing or reducing net-peak demand during extreme events.

The Strategic Reliability Reserve provides funding to secure conventional generation, efficiency upgrades at existing natural gas plants, demand response, distributed generation, and long-duration storage.

In addition, the agreement calls for accelerating permitting for electric transmission projects.

Publicly Owned Utilities

The as amended AB-1373 includes sections related to publicly owned utilities in the state.

Existing law requires each local publicly owned electric utility serving end-use customers to prudently plan for and procure resources that are adequate to meet its planning reserve margin and peak demand and operating reserves, sufficient to provide reliable electric service to its customers.

The measure authorizes a local publicly owned electric utility to meet its minimum planning reserve margin through individual contractual procurement or through an aggregated or pooled portfolio of resources, as specified.

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