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Director Blog: Commissioners Continue Fight Against Climate Change at First Meeting of 2018

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Below is a blog from Edward Randolph, the Director of the CPUC's Energy Division 

 

The CPUC's January 11, 2018, Voting Meeting was one of the more amazing ones that I have witnessed since joining the CPUC in 2010. There are a number of reasons that make me marvel at the first Voting Meeting of the year, including the long-term importance of some of the actions the Commissioners took, and how groundbreaking in combatting climate change that those actions are. 


First and foremost, the Commissioners voted to close Pacific Gas and Electric Company's (PG&E) Diablo Canyon Nuclear Power Plant. If you had asked me seven years ago if it was likely that any of the existing nuclear plants in California would close down when their licenses expired, I would have said it was highly unlikely that California would be able to replace 4,000 megawatts of carbon-free energy, and that the San Onofre Nuclear Generating Station and Diablo Canyon would likely continue to operate long after 2025. Now, not only will California be nuclear free by 2025, we are all fairly confident that the electricity from Diablo Canyon can be replaced with carbon-free resources, thanks, in part, to the CPUC's Integrated Resource Planning. I was disappointed and surprised that some environmental groups choose to be critical of the decision. The groups that are critical say that they are concerned that the CPUC missed an opportunity to commit to clean energy. But they are choosing to ignore the results of the Integrated Resource Planning process, which shows a clear path to replacing Diablo Canyon resources with clean energy.


Second, the Commissioners set up implementation of third-party run energy efficiency programs. This may be viewed as a procedural step for a decision that the CPUC already made, but it is another in a series of steps aimed at reducing uncertainty and increasing creative market-based solutions to the ever challenging energy efficiency milieu. While there are risks around shifting focus to third-party providers, the decision could also result in some sea changes in how energy efficiency works. 


Third, continuing our commitment to helping reduce greenhouse gases in the state and lower customer costs, the Commissioners directed PG&E to solicit bids for clean energy resources to replace three costly fossil fuel plants to meet specific needs in Northern California. What amazes me about this decision is the fact that directing PG&E to look for non-fossil alternatives is even an option. The controversy around this decision was focused on process and not that anyone thought it was impossible to find cost-effective options to replace two fossil fuel peaker plants. It is amazing that it is even possible to suggest that the utility may be able to find storage and other clean resources that are more cost effective than fossil. We have come a long way in clean energy options.


Fourth, the Commissioners approved $555 million in Electric Program Investment Charge (EPIC) research and development. Organized around three program areas-Applied Research and Development, Technology Demonstration and Deployment, and Market Facilitation-EPIC is an important program that seeks to drive efficient, coordinated investment in new and emerging energy solutions.


Fifth, the Commissioners' decision approving 15 new Transportation Electrification pilot projects, as a precursor to what will likely be quite a few more later in the year, continues the CPUC's cutting edge work in supporting the adoption of a wide range of electric vehicle uses. 


Lastly, the Commissioners' actions to increase registrations under Rule 24 for third-party Demand Response providers to be able to participate in the California Independent System Operator markets will allow for the expansion of Demand Response Auction Mechanism. This is one more step where California has steadily but quietly increased Demand Response efforts over the past 8 years. I used to hear a steady drumbeat that California's Demand Response should be more like the regional transmission organization PJM. I think we are at the point that if we take into account that California has a very different industrial base than PJM; that Californians cannot use diesel generators to meet Demand Response requirements; and that we are not seeing Demand Response providers in California switch out their Demand Response to fossil, we see that California is well on the way to being the leader in Demand Response programs.


All in all, the Commissioners actions this month exemplify the CPUC's commitment to fighting climate change with all the resources at our disposal. It signals to the state and the nation that California will meet its climate change goals, and we will do so by being smart, creative, and dedicated.


Edward Randolph joined the CPUC in March 2010 as Director of Governmental Affairs and Senior Policy Advisor. He was named Energy Division Director in November 2011. 

CPUC Issues Staff Report on Physical Security of Substations

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The Risk Assessment & Safety Advisory section of the CPUC's Safety & Enforcement Division has issued a new whitepaper titled, "Security and Resilience for California Electric Distribution Infrastructure: Regulatory and Industry Response to SB 699".

 

The report assesses the readiness of California's three primary electric utility companies to respond to a terrorist attack and the grid's ability to withstand an organized attack, and makes recommendations for low-cost practical solutions that would further enhance grid security and reduce the risk of a terrorist attack.

 

The report builds upon a previously issued Safety & Enforcement Division whitepaper from February 2015 that provided valuable information for a CPUC proceeding looking into Physical Security of the Electric Distribution Infrastructure (R.15-06-009). This Rulemaking was initiated in response to Senate Bill 699, a 2014 law directing the CPUC to assess grid vulnerability in the wake of an attack at Pacific Gas and Electric Company's Metcalf electric transmission substation on the southern outskirts of San Jose. The Metcalf attack also triggered sweeping new federal regulations to prevent such attacks against the high-voltage transmission grid under federal jurisdiction.

 

The CPUC report issued today focuses on potential gaps in federal rules (known as Critical Infrastructure Protection - CIP) for physical security of the distribution grid, overseen by the CPUC, in particular distribution substations and control centers.  

 

California's investor-owned electric utilities, as well as several publicly owned utilities, are considered leaders nationally in the emerging field of utility threat assessment and physical security. The CPUC report finds that although California's electric utilities are doing a good job of proactively taking steps to secure their electric distribution assets, they still have some ways to go to fully satisfy State regulators. 

 

Rather than focusing solely on "hardening" the physical security of facilities, the report recommends that all electric utilities operating in California boost resiliency - a facility's ability to withstand an attack and the grid's ability to withstand potential loss of a substation.

 

Recommended strategies include:

  • Maintaining an inventory of spare parts that can be rapidly dispatched and installed by utility repair crews;
  • Participation in assistance assurance agreements such as those that utilities have invoked for fires and major event relief efforts in California and nationally; and,
  • New standards for construction of new utility substations that would require defensibility as a design consideration. 

 

Separately, the CPUC in R.15-06-009 is considering a Joint Utility Proposal for Distribution Substation and Distribution Control Center Security Programs and Mitigation Plans. This first-of-its-kind proposal at the state level would consist of these elements:

  1. Identification of distribution facilities;
  2. Assessment of physical security risk on distribution facilities;
  3. Development and implementation of security plan;
  4. Verification;
  5. Recordkeeping
  6. Timelines; and,
  7. Cost recovery.                                                        

Natural Gas System Emissions Decrease from 5 percent from 2015

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On June 15, 2017, CPUC approved the Natural Gas Leak Abatement Program, consistent with Senate Bill 1371. The decision, made in consultation with the California Air Resources Board (CARB), established rules and procedures for natural gas utilities to provide annual emissions reports, put in place 26 mandatory best practices for minimizing methane emissions, and ordered utilities to complete biennial compliance plans beginning in March 2018.

 

The program's goal is to achieve a 40 percent reduction from the baseline by 2030, consistent with the State's Short-Lived Climate Pollutant Reduction Strategy.  

 

 As part of the program, the CPUC and CARB jointly analyzed emissions data submitted by utilities. The analysis shows emissions for 2016 for the sector are approximately 8.08 million metric tonnes of carbon dioxide (MMTCO2e), assuming a 20-year methane global warming potential.  The emissions from the Aliso Canyon leak are included in the report, as estimated by CARB, for informational purposes only but are not part of the overall estimate. 

 

 The 2016 methane emissions are approximately five percent lower than the 2015 baseline data (8.51 MMTCO2e), primarily due to reductions in intentional vented emissions from pipelines.  Although encouraging, natural gas consumption also decreased with a resulting leakage rate similar to 2015.  The CPUC and CARB will continue to analyze data to confirm the trend in emission reductions over time to enable meeting the 2030 goal.  


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