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Proposal Would Require PG&E to Seek Bids for Energy Storage to Replace Three Fossil Plants

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We have issued a proposal (Resolution E-4909) that, if adopted at our January 11, 2018 Voting Meeting, would require Pacific Gas and Electric Company (PG&E) to solicit bids for battery storage or other preferred resources to replace three fossil fuel power plants to meet specific local area needs. Energy storage is a clean energy resource that can be fast-responding, reliable, and constructed in a short timeframe. 

 

The battery storage projects would replace three Calpine fossil fuel plants (Feather River, Yuba, and Metcalf) that do not have long-term contracts with utilities but that have been identified by the California Independent System Operator (CAISO) as needed to serve local reliability needs. If successful, PG&E's Request for Offer (RFO) would replace the three gas-fired plants.

 

Calpine and the CAISO have requested that the Federal Energy Regulatory Commission approve the CAISO's designation of the three plants as "must run" for reliability purposes, which would mean that the plants would get paid to operate on an expensive cost of service contract. The CPUC and PG&E have opposed this, in part because a lack of competition can lead to market distortions and unjust rates for power. The CPUC believes there are better alternatives, including battery storage. 

 

The CPUC proposal does not require PG&E to sign contracts; it requires the utility to ascertain whether there are competitive offers for battery storage within 30 days, and if there are PG&E will execute contracts. 

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