Dive Brief:

• Lawmakers in the California Assembly and Senate have introduced legislation to encourage more clean energy resources in the state in order to address peak load, reliability and to avoid the need for new fossil fuel generation.
• The bills would require utilities to deploy clean energy during peak demand in order to meet California's aggressive greenhouse gas and renewable energy goals, while mandating the California Public Utilities Commission determine a percentage of kWh each peak-load time period to be served with clean energy. 
• The bills build upon a proposal in Arizona, where the state consumer advocate proposed tweaks to the state renewable portfolio standard (RPS) that could maximize the value of new capacity by adding a timing component. 

Dive Insight:

The classic difficulty in reaching high levels of renewable power has typically been balancing them with fossil fuel generation. But as battery storage, demand management and efficiency become more entrenched, lawmakers in California see a way around new gas-fired plants.

Assembly Speaker pro Tem Kevin Mullin (D) introduced AB 1405 to deploy more clean energy resources during peak electricity demand, setting out a schedule for utilities to reach kilowatt-hour goals. In a statement, Mullin called the California’s renewables and emissions goals "laudable, but ultimately incongruous in the absence of a policy framework and new market mechanisms."

The California’s Independent System Operator will need new tools, he said, to manage the impacts of increasing renewables penetration. As more renewable resources are brought online, Mullin explained in his statement, additional fossil fuel power plants may be built to provide flexibility and reliability—an outcome at odds with greenhouse gas reduction.

AB 1405 would define a four hour peak-load time period around the hour of each day that exhibits the highest peak demand, and direct state regulators to determine the percentage of clean kilowatt hours each electric utility delivers. Then, beginning in 2020, the measure requires the California Public Utilities Commission to to ensure each utility increases the percentage of clean peak resources it delivers every three years for at least 15 days per month. 

A similar measure has been introduced in the Senate. The increases in clean peak energy continue until 2029, or when a utility serves 40% of demand during the peak-load time with clean resources. The bills also require the PUC to consider targets to encourage the deployment of clean peak resources to provide flexibility and reliability services as well. 

Four years ago, California became the first state in the nation to set an energy storage mandate, directing investor-owned utilities to buy 1.325 GW by 2020. Those deployments were accelerated in some regions, due to a natural gas shortages impacting gas plants.