Dive Brief:

• The California ISO has approved Pacific Gas and Electric's plan to utilize clean energy resources to allow an older jet fuel generator on its system to retire.
• The utility says its Oakland Clean Energy Initiative (OCEI) will be the first time that local clean-energy resources were "proactively deployed as an alternative to fossil-fuel generation" for transmission reliability in PG&E's service area.
• Dynegy owns the Oakland generator, which has a reliability-must-run (RMR) contract with the California grid operator to address peak demand. Retiring the plant would have an impact on reliability, but PG&E's plan aims to offset that. 

Dive Insight:

Rather than replacing the facility with a new fossil-fuel generator, PG&E has gotten approval to turn to local clean energy. OCEI resources could include energy storage, energy efficiency and electric-system upgrades to ensure transmission grid reliability in Oakland. PG&E says it will open a request-for-offers process this spring, and depending on the exact resource mix, expects the solicitation is expected to result in 20 MW to 45 MW of clean energy resources.

Following CAISO's approval, PG&E said it will now begin to upgrade existing substations and develop new clean-energy resources in Oakland. And, the utility said it will continue to collaborate with community choice aggregator East Bay Community Energy "to determine and meet the clean-energy and reliability needs of local customers."

PG&E officials say they invited stakeholders to weigh in, and as a result, the OCEI has support on the ground.

Parties who discussed the initiative with PG&E included the city of Oakland, a local union, the Port of Oakland, environmental groups like the Environmental Defense Fund and the Natural Resources Defense Council, and others.

PG&E intends to seek cost recovery for the battery storage with the Federal Energy Regulatory Commission, and for other distributed energy resources with the California Public Utilities Commission. A filing with state regulators will come before the end of the year. The project is expected online in the middle of 2022.