Could the tide be turning? Last month, I wrote about a pending decision at the California Public Utilities Commission (CPUC) on whether to approve San Diego Gas & Electric’s (SDG&E) contract with the proposed 600 megawatt (MW) Carlsbad gas plant prior to an evaluation of clean energy alternatives. While previous signs had pointed to CPUC approval of Carlsbad, the judge presiding over the case rejected Carlsbad in a proposed decision that strongly reaffirms the state’s commitment to clean energy and state policy (known as the “Loading Order”) requiring that clean energy be prioritized over fossil fuels.
To replace the San Onofre Nuclear Generating Station (“San Onofre”), SDG&E was pushing for Carlsbad to fill the entirety of the 300-600 MW of power the CPUC determined could be met with clean energy or gas. In denying SDG&E's application, the proposed decision recognized that the CPUC had "directed SDG&E to procure up to 100 percent" of its San Onofre replacement need from clean energy. By rushing to approve Carlsbad prior to an evaluation of clean energy alternatives, the proposed decision determined that Carlsbad approval would “categorically preclude the procurement of renewable generation to the fullest extent possible.”  Because it is “incumbent on SDG&E to meet its procurement authority to the extent feasible with preferred resources and energy storage,” the proposed decision found that SDG&E could only resort to gas once all feasible and cost-effective clean energy options had been exhausted.
This is a big win for clean energy. While the Loading Order has long been part of state law and Commission policy, it has often been given little more than lip service. The proposed decision marks the first time the Loading Order has been robustly enforced and if finalized, will help ensure that clean energy is meaningfully prioritized in subsequent power solicitations. In rejecting Carlsbad, the potential market for clean energy solutions like local solar, storage, demand response and efficiency has grown by up to 600 MW in the San Diego region, with every additional megawatt of clean energy and storage that is procured displacing what would have gone to gas.
The proposed decision is not only a victory for clean energy, but also an important step forward in restoring public trust in the wake of repeated disclosures of the CPUC’s backroom deals with the utilities it is charged with regulating. SDG&E’s effort to ram through a privately negotiated contract prior to any competitive evaluation is not in the public interest and always appeared suspect. With new Commission leadership vowing reform and for CPUC decisions “based on a record developed in public,” whether the CPUC upholds the proposed decision will speak to the seriousness of its commitment to protect customers and the environment.
The proposed decision will be voted on by the five CPUC Commissions as early as April 9.Â