California is looking for an “all-of-the-above” list of energy resources to forestall the threat of blackouts next summer due to the shutdown of the massive Aliso Canyon natural-gas facility. That will include tens of megawatts of new energy storage projects, as we covered earlier this month.

But it will also involve energy reductions to come from millions of dollars' worth of new demand response programs, under a plan approved by state regulators this week -- and it could also include many megawatts of new solar projects -- if solar advocates get their way.

Last week, the California Public Utilities Commission approved a decision that will allow utility Southern California Edison to spend an additional $8.7 million on demand response programs specifically to address the Aliso Canyon gas leak. It’s part of a broader push that includes energy efficiency, better coordination between utilities and state grid operator CAISO, and other measures.

The January shutdown of Aliso Canyon, which has been leaking massive amounts of methane since a well rupture last fall, has threatened to disrupt gas supplies to power plants that supply up to 70 percent of the power needs for some 11 million people in the Los Angeles basin. An April report found these disruptions could lead to up to 14 days of blackouts next summer if alternative resources can’t be found.

The CPUC’s ruling will allow SCE to expand demand response ranging from smart thermostats and air conditioner load control, to commercial and industrial “interruptible load” programs. Here’s a breakdown of the key features of the plan:

  • CPUC will allow SCE to spend $2.8 million in current 2016 funding and $3.2 million of additional 2017 funding for its Summer Discount Plan, which signs up customers willing to have their air conditioning interrupted during peak events. SCE wants to sign up about 1 million residential and commercial customers this year and 1.6 million residential and commercial customers in 2017, and the CPUC has ordered the utility to target marketing in the Los Angeles Basin region affected by Aliso Canyon’s shutdown.
  • SCE won’t end its Peak Time Rebate program, but will continue it through the end of this year to avoid losing additional load reduction capacity. It will also revive its Demand Bidding Program and continue its Base Interruptible Program and Agricultural Pumping Interruptible programs, with additional budgeting adding up to less than $1 million.  
  • SCE will also receive an additional $1.65 million to provide a $75 rebate to 28,000 customers who purchase programmable communicating thermostats (PCTs) and enroll in SCE’s PTR Direct Load Control program.
  • Finally, the CPUC authorized $3 million for SCE’s plan for a custom demand response auction mechanism (DRAM). The DRAM is a pilot program that has only just gotten underway this year, with the state’s big three utilities taking bids for more than 40 megawatts to start this summer. But SCE’s custom DRAM is expected to be exclusively focused on the areas affected by the Aliso Canyon shutdown. While the details of how that will work haven't been set yet, SCE is under the gun to get a plan in place that stakeholders can agree on -- the CPUC has set a deadline of July 15 for SCE's advice letter laying out its plan and a mid-August deadline for opening bids.

Solar power as an emergency resource

Meanwhile, solar PV projects could bring more energy to the region, particularly during the same hot summer afternoons when grid demands are expected to reach their peak. That’s the rationale of a proposal from the Solar Energy Industries Association (SEIA), asking the CPUC to keep SCE’s long-running Solar Photovoltaic Program up and running.

Started in 2009, the SPVP was aimed at bringing about 500 megawatts of commercial PV projects on-line, with the utility and third-party developers getting half. But after receiving only 1.8 megawatts of projects under its most recent solicitation, SCE asked CPUC for permission to end the program, even though about 25 megawatts of capacity remain.

The SEIA has been arguing against closing the program since before the Aliso Canyon report came out in April, Brandon Smithwood, SEIA’s California state affairs manager, said in an interview last week. But that report has highlighted the need to keep open as many options for new energy resources as possible, he said.

In fact, least 10 megawatts of projects that were proposed for SCE’s latest procurement are planned for one of the substations that’s deemed critical for maintaining grid reliability in the wake of the Aliso Canyon shutdown, according to SEIA’s analysis. The CPUC is expected to take up the SPVP issue in a meeting later this month, which means there’s little time left to save that potential resource from being left out of next summer’s mix.

SEIA and its sister organization CalSEIA are also asking the CPUC to expand solar water heating incentives, order SCE to revamp its interconnection rules to speed up new projects coming on-line, and lift the cap on SCE’s so-called “Option R” rate schedule for commercial and industrial customers with solar projects.

They’re also lobbying for legislation to allow natural-gas-fired water heaters to be replaced with grid-responsive electric water heaters paired with solar PV -- another example of how the Aliso Canyon emergency will require a broad approach that pulls multiple resources together in innovative ways.