California Regulators Approve Two Greenhouse Gas Emission Reduction Targets as Statewide Integrated Resource Plan Moves Forward

The California Public Utilities Commission (CPUC) took a tentative step forward to implementing SB 100, the historic legislation that set the goal of eliminating greenhouse gas (GHG) emissions from the electric sector in California by 2045.  At its March 26 business meeting, the Commission made a long-awaited decision to require investor-owned utilities and community choice aggregators (CCAs) to submit resource plans by September laying out how they would meet two GHG reduction targets – one that would set GHG emissions at 46 million metric tons (MMT) by 2030 and another that uses a more ambitious target of 38 MMT.  The Commission will subsequently adopt a binding GHG emission target and Preferred System Portfolio based on the aggregation of the individual plans.

The 46 MMT GHG target is a business-as-usual approach that uses the same target that was in place before the passage of SB 100. This status quo target and its accompanying reference portfolio would leave California far behind the curve in 2030 when electricity demand will begin to accelerate due to growth in demand for electric vehicles and the electrification of other sectors of the economy.  Their planning was also seriously flawed since it failed to consider or model low-cost hybrid resources, like solar paired with battery storage, as new candidate resources that should be procured in the near future.

Vote Solar joined other organizations in sending a letter to Governor Gavin Newsom pointing out that California was on track to have more GHG emissions in 2030 than in 2022.  The letter showed that without large-scale investment in solar power and battery energy storage to offset the closure of the Diablo Canyon nuclear reactors that there would be an increase in GHG emissions in California.

With the risk of catastrophic wildfires and other climate disasters increasing, California cannot afford a go-slow approach to implementing the landmark law, SB 100.  The significantly lower 2030 target of 30 MMT, which had been modeled by the Commission staff, would have provided clean energy investors and the public at large with much more confidence that California would stay on track to the zero carbon emissions goal by 2045.

Although a new statewide integrated resource planning process was adopted by the Legislature in 2015 (SB 350 – De Leon) the CPUC until recently had not approved the procurement of new renewable resources.  It was not until last November that the Commission authorized the procurement of 3,300 megawatts of new resources that would assure electric service reliability while making progress in achieving California’s climate goals.  It is expected that a substantial proportion of these new resources will be hybrid solar projects paired with battery storage systems. A resource portfolio based on a 30 MMT target would drive additional development of new clean energy resources and avoid the type of catch-up decision-making that occurred when the Commission suddenly realized it needed to keep open ancient and inefficient coastal power plants that had been scheduled for closure in 2020.

The California Energy Commission has recognized that the electricity sector is the key to reducing climate pollution across the economy, particularly in housing and transportation. California will not be able to decarbonize its economy as quickly as needed if the electric sector does not capture near-term opportunities offered by low cost, zero-carbon hybrid resources.

Given California’s importance as a leader in reducing climate pollution, the Commission must adopt the 38 MMT target when it approves the 2019-2020 Preferred Resource Portfolio around the end of the year.  In the subsequent 2021-2022 IRP process, we need a 30 MMT that would support the level of investments in clean energy resources that are needed to get the state back on the course to eliminate GHG emissions in the electric sector by 2045.