Electricity: transmission planning and transmission facilities

The law aligns state planning with federal transmission-planning requirements and aims to speed grid expansion needed for clean energy, reliability, and electrification while keeping rates just and reasonable.

What the law does ​

• Requires the California Public Utilities Commission and California Energy Commission, with the California Independent System Operator, to update their transmission-planning memorandum and workplan by January 1, 2028.
• Requires transmission guidance to use at least three resource portfolios, account for uncertainty and adaptability, stress-test costs and reliability, and support applicable federal transmission-planning orders.
• Extends regional projections of electricity demand and resource portfolios from at least 15 to at least 20 years.
• Requires planning to consider supplemental or accelerated transmission needs, interconnection timelines, wildfire risk, grid reliability, clean-energy delivery, and energy, climate, and air-quality goals.
• Defines risk-prudent planning as planning that can meet state goals across plausible futures without relying on one assumed forecast.
• Requires the California Public Utilities Commission and California Energy Commission to identify cost-effective ways for energy-only resources to gain deliverability through transmission expansion and seek reserved deliverability for geothermal and wind resources.

Who it affects ​

• Electrical corporations, community choice aggregators, and other load-serving entities that procure electricity.
• Renewable, zero-carbon, geothermal, wind, offshore-wind, energy-storage, and transmission developers.
• The California Independent System Operator, which plans and approves transmission facilities under its tariff.

Context ​

The memorandum-and-workplan update requirement expires January 1, 2029.

Breakdown ​

Updating Energy Planning Coordination ​

The bill requires the Public Utilities Commission, Energy Commission, and Independent System Operator to update their coordination agreement and workplan by January 1, 2028. The update must ensure the documents reflect applicable requirements of Federal Energy Regulatory Commission Order 1920.

Key takeaways

• The PUC, Energy Commission, and ISO must update their memorandum of understanding and related workplan by January 1, 2028.
• The updated documents must incorporate applicable requirements from Federal Energy Regulatory Commission Order 1920.
• The memorandum and workplan guide coordination on electricity resources, grid connections, transmission infrastructure, and related planning needs.
• This requirement builds on the agencies' existing duty to periodically review their coordination agreement and workplan.

Risk-Prudent Electricity Planning ​

The bill changes the PUC’s electricity resource planning standard. The required portfolio must integrate renewable energy and resource diversity not only cost-effectively, but also in a risk-prudent way.

Key takeaways

• The PUC must consider whether its electricity resource portfolio is risk-prudent as well as cost-effective.
• The change applies to planning for reliable electricity supplies and the integration of renewable energy and diverse resources.
• The bill adds risk management to the standard used for the PUC’s resource portfolio.

Longer-Term Transmission Guidance ​

The bill updates the guidance used for transmission planning. It requires the guidance to account for uncertainty and flexibility, use prudent risk management, and support compliance with federal transmission orders. It also extends regional resource and electricity-demand forecasts to at least 20 years and adds faster grid connections and state energy, climate, and air-quality goals to transmission planning priorities.

Key takeaways

• Transmission planning guidance must account for uncertainty and preserve options when planning future facilities.
• The guidance must be risk prudent and support compliance with specified Federal Energy Regulatory Commission orders.
• Regional projections of resource portfolios and electricity demand must look at least 20 years ahead instead of at least 15 years ahead.
• The bill removes the requirement to provide these projections every year.
• Transmission planning must also aim to reduce the time needed to connect resources to the grid.
• Planning must support California’s energy, climate change, and air-quality goals.

Conditional AB 2369 Changes ​

This part makes additional changes to Public Utilities Code Section 454.57 that were proposed by AB 2369. Those changes take effect only if both AB 2111 and AB 2369 become law and AB 2111 is enacted after AB 2369.

Key takeaways

• The bill adds conditional changes to Public Utilities Code Section 454.57 that were proposed in AB 2369.
• The conditional changes apply only if both AB 2111 and AB 2369 are enacted.
• AB 2111 must be enacted last for these additional changes to become operative.

Enforcement and Local Costs ​

The bill makes violations of PUC actions that implement the bill's requirements criminal offenses under the Public Utilities Act. Although this creates a state-mandated local program, the bill says local agencies and school districts do not have to be reimbursed for related costs because the mandate results from creating or changing a crime.

Key takeaways

• A violation of a PUC action implementing the bill's requirements can be prosecuted as a crime.
• The bill creates a state-mandated local program because it adds criminal enforcement responsibilities.
• The bill states that the state does not have to reimburse local agencies or school districts for costs caused by this mandate.
• The stated reason for no reimbursement is that the costs arise from the creation or modification of a crime.