The CPUC authorized PG&E to issue a Request for Offer (RFO) for battery storage or other preferred resources to 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 RFO, as well as transmission solutions, could replace the three gas-fired plants. Energy storage is a clean energy resource that can be fast-responding, reliable, and constructed in a short timeframe.
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 cleaner, less expensive alternatives, including battery storage and preferred resources.
Today’s decision does not require PG&E to sign contracts if doing so would result in unreasonable costs or if the solicitation yields proposals that would not prove effective in reducing or eliminating the need for the three gas-fired plants.
