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California appeals court decision increases the potential for CEQA challenges to power plant projects under the CEC’s jurisdiction.

By Marc T. Campopiano, Charles C. Read, and Kevin A. Homrighausen

In Communities for a Better Environment v. Energy Resources Conservation & Development Commission, the California First District Court of Appeal recently held that the State Legislature violated the California Constitution by limiting the scope of judicial review for California Energy Commission (CEC) decisions involving power plant siting to the California Supreme Court. Although the California Constitution gives the Legislature express authority to limit the scope of judicial review for California Public Utilities Commission (CPUC) decisions, the court found there is no similar authority regarding appeals of CEC decisions.

The Supreme Court has rarely, if ever, agreed to hear CEQA challenges of CEC power plant decisions. Now, developers seeking to construct new power plants or modify existing power plants under the CEC’s jurisdiction may see an increase in legal challenges — including California Environmental Quality Act (CEQA) challenges — in California’s trial courts. As a result, CEQA challenges to power plants may closely resemble other land use challenges in the state.

Wildfires, ride-sharing, community choice aggregation, and more bring increased regulatory risk.

By Marc T. Campopiano, Charles C. Read, and Brian F. McCall

The California Public Utilities Commission (CPUC) has tremendous influence on public utility regulation in California and beyond. The CPUC has the biggest staff of any state utilities commission and has issued fines and penalties well in excess of US$2 billion. The CPUC has been very active with new rulemakings and proceedings that will impact utilities and a range of industries. Because of the CPUC’s outsize influence, many of these new regulatory developments may well be adopted by public utilities or public service commissions in other states. Below are summaries of five key developments at the CPUC.

The California Assembly is expected to vote this summer to establish increased renewable energy targets and set a target of 100% clean energy by 2045.

By Marc T. Campopiano, Jennifer K. Roy, Diego Enrique Flores

SB 100, Senator Kevin De Leon’s renewable energy bill, would increase California’s already ambitious renewable energy standards by 2030 with an ultimate goal of 100% clean energy by 2045. On July 3, the California Assembly Committee on Utilities and Energy passed the bill out of committee. In 2017, the bill was approved in the Senate but did not progress through the Assembly before the term ended. In 2018, SB 100 is expected to again reach the Assembly floor for consideration.

As currently drafted, SB 100 would increase California’s Renewables Portfolio Standard (RPS) requirement from 50% to 60% by 2030, and set a goal of 100% clean energy by December 31, 2045 through RPS-eligible and zero-carbon resources. Clean energy could be defined more broadly than the current definition of renewable energy, to include energy resources such as large-scale hydro power that qualify as zero-carbon.

The California Assembly is expected to vote this summer to establish increased renewable energy targets and set a target of 100% clean energy by 2045.

By Marc T. Campopiano, Jennifer K. Roy, Diego Enrique Flores

SB 100, Senator Kevin De Leon’s renewable energy bill, would increase California’s already ambitious renewable energy standards by 2030 with an ultimate goal of 100% clean energy by 2045. On July 3, the California Assembly Committee on Utilities and Energy passed the bill out of committee. In 2017, the bill was approved in the Senate but did not progress through the Assembly before the term ended. In 2018, SB 100 is expected to again reach the Assembly floor for consideration.

As currently drafted, SB 100 would increase California’s Renewables Portfolio Standard (RPS) requirement from 50% to 60% by 2030, and set a goal of 100% clean energy by December 31, 2045 through RPS-eligible and zero-carbon resources. Clean energy could be defined more broadly than the current definition of renewable energy, to include energy resources such as large-scale hydro power that qualify as zero-carbon.

By Michael Gergen, David Pettit and Christopher Randall

The CPUC’s market-shaping decision provides guidance regarding the “stacking” of multiple electricity system services.

A new decision from the Public Utilities Commission of the State of California (CPUC) has set the stage for improved economic viability for California’s energy storage industry. The January 17 decision — Decision 18-01-003 in Rulemaking 15-03-011 (the Decision) — establishes a set of rules to guide utilities on how to “promote the ability of storage resources to realize their full economic value when they are capable of providing multiple [or ‘stacked’] benefits and services to the electricity system.”

To advance this objective, the CPUC has adopted 11 stacking rules to govern the evaluation of multiple-use energy storage applications, as well as associated definitions of services and service “domains.” The agency also established a working group to develop certain issues further and directed the CPUC’s Energy Division to prepare a report in 2018 on the state of the energy storage industry.

By Michael J. Gergen and Marc T. Campopiano

On October 16, 2014, the Federal Energy Regulatory Commission (“FERC”) issued an Order on Tariff Revisions, FERC Docket No. ER14-2574, conditionally accepting, with two substantive modifications, tariff changes proposed by the California Independent System Operator (“CAISO”) to establish new flexible resource adequacy capacity (“FRAC”) and must-offer obligation (“MOO”) requirements intended to ensure that adequate flexible capacity is available to address the added variability and net load volatility associated with ongoing and expected future changes on the CAISO-controlled grid.  The FRAC-MOO requirements will be effective, subject to a compliance filing by the CAISO (due within 30 days of the date of the order), effective November 1, 2014, to allow load serving entities (“LSEs”) subject to the requirements time to make their first FRAC showings to the CAISO by November 15, 2014.

By Michael J. Gergen, Marc T. Campopiano and Andrew H. Meyer

On September 5, 2014, San Diego Gas & Electric (“SDG&E”) issued a 2014 Energy Storage System (“ESS”) Request for Offers (“RFO”) soliciting at least 25 MW—and up to 800 MW—of energy storage (the “2014 ES RFO”).  SDG&E’s 2014 ES RFO is among the largest solicitations to date in the U.S. for grid-scale energy storage resources.

By Michael J. Gergen, Marc T. Campopiano, and Andrew H. Meyer

On August 14, 2014, the California Public Utilities Commission (“CPUC”) issued an Order Instituting Rulemaking (“Order”) to establish policies, procedures, and rules to guide California investor-owned electric utilities (“IOUs”) in developing their Distribution Resources Plan Proposals (“DRPs”) in accordance with the requirements of Public Utilities Code Section 769.  In particular, the rulemaking will evaluate the IOUs’ existing and future electric distribution infrastructure and planning procedures with respect to incorporating Distributed Energy Resources (“DERs”) into the planning and operation of their electric distribution systems.  DERs include distributed renewable generation resources, energy efficiency, energy storage, electric vehicles, and demand response technologies. 

By Michael J. Gergen and Andrew H. Meyer

On August 1, 2014, the California Independent System Operator (“CAISO”) filed proposed tariff changes at the Federal Energy Regulatory Commission (“FERC”) in FERC Docket No. ER14-2574 that would establish new flexible resource adequacy capacity (“FRAC”) and must-offer obligation (“MOO”) requirements aimed at ensuring that adequate flexible capacity is available to address the added variability and net load volatility associated with ongoing and expected future changes on the CAISO-controlled grid. In its filing, the CAISO proposes a November 1, 2014, effective date for the tariff changes establishing the FRAC-MOO so that they will apply to resource adequacy showings beginning in January 2015.  FERC has set Friday, August 22, 2014, as the due date for comments on the CAISO’s FRAC-MOO proposal.        

By Marc T. Campopiano and Benjamin D. Gibson

On March 13, 2014, the California Public Utilities Commission (CPUC) adopted D.14-03-004, which authorized Southern California Edison (SCE) to procure 500-700 MW of additional resources and San Diego Gas & Electric (SDG&E) to procure 500-800 MW of additional resources.  The CPUC will require the utilities to fulfill this authorization based on an unprecedented reliance on “preferred resources,” including demand response, energy efficiency and energy storage technology.