On October 29, 2021, California Public Utilities Commission (CPUC) issued a suite of proposals to address the risk of outages during extreme heat events similar to the ones the state experienced in 2020 and 2021.[1] The proposed decisions create new programs and modify existing programs to reduce energy demand and increase supply during critical times of the day. The proposals are part of the CPUC’s effort to respond to Governor Gavin Newsom’s July 30, 2021, Emergency Proclamation, which urged state energy agencies to ensure there is adequate electricity to meet demand. According to the CPUC, 2,000 to 3,000 MW of new supply- and demand-side resources will help address grid reliability in extreme heat events in 2022 and 2023.[2]

One of the new proposals is the Demand Response Program for Residential Customers, which would pay residential customers $2 per kWh for reductions in energy use at critical times. Other proposals include doubling the compensation rate of the Emergency Load Reduction Program to $2 per kWh, implementing a $22.5 million smart thermostat incentive program to assist customers in reducing air conditioner use during critical times, and expanding other energy efficiency programs. On the supply side, the CPUC is proposing new energy efficiency programs, such as four new energy storage microgrid projects for San Diego Gas & Electric (SDG&E) to provide a total of 160 MWh of capacity and temporary generation for Pacific Gas and Electric Company (PG&E) to augment its temporary generation program.

[1] https://www.cpuc.ca.gov/news-and-updates/all-news/cpuc-proposals-ensure-electricity-reliability-during-extreme-weather-for-summers-2022-and-2023

[2] Peak demand managed by CAISO in 2020 was 47, 121 MW. The peak demand in 2021 is 43,982 MW as of October 2021.