SACRAMENTO – Assemblymember Bill Quirk (D-Hayward) has introduced a bill to incentivize load serving entities to plan well-balanced portfolios to minimize impact on our shared electrical system.
The electricity market has become increasingly fragmented, with more than 40 California Public Utilities Commission-jurisdictional load-serving entities in operation, including investor-owned utilities, community choice aggregators, and electric service providers. By 2021, all load serving entities must have 65% of their renewable resources under long-term contract. Portfolios that are not carefully balanced will impose indirect costs on the shared electrical system.
For example, load serving entities may not match their energy purchases to their customer load profiles, leaving the California Independent System Operator with the responsibility of ensuring that sufficient system resources are available to serve load. These resources are likely to be gas-fired, at least in the short term.
“California has set an ambitious goal to eliminate reliance on fossil fuels in our electric system by 2045. This bill would give retailers an incentive to shape their resource portfolios to minimize impacts on our shared electric system by requiring them to pay for the indirect system costs that their portfolios create,” said Assemblymember Quirk.
“As California increasingly relies on renewable energy resources, additional electric system balancing resources, such as storage, will be required. However, the more that our utilities and other retail sellers craft their own resource portfolios to match their customer loads, the fewer such resources will be required. This bill would create the cost signals to encourage that,” said Nancy Rader, Executive Director of California Wind Energy Association.
AB 1584 will be eligible to be heard in March.