California ISO approves PG&E plan to replace old power plant

PG&E will open a two-month request-for-offers process this spring to invite providers of distributed energy resources to propose solutions for the portfolio

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Pacific Gas and Electric Co. won approval from the California Independent System Operator (California ISO) to provide a clean alternative to a decades-old fossil-fuel power plant in Oakland.

PG&E’s Oakland Clean Energy Initiative (OCEI) will use local clean-energy resources, including energy storage, energy efficiency and electric-system upgrades, to ensure transmission grid reliability in Oakland when the current power plant at 50 Martin Luther King Jr. Way is retired.

PG&E will open a two-month request-for-offers process this spring to invite providers of distributed energy resources to propose solutions for the portfolio.

The system operator has a Reliability Must Run contract with the existing plant’s owner, Dynegy, to purchase power during peak periods. In spring 2017, the system operator identified the 40-year-old plant’s eventual retirement as a risk to local transmission reliability, and said it would consider alternatives including new transmission lines through heavily populated areas of Oakland, a new fossil-fuel plant or a portfolio of local clean resources.

PG&E and the system operator worked collaboratively over the last several transmission-planning cycles to study how distributed clean energy resources could become part of the solution, Kuga said.

The system operator determined in its transmission plan that the OCEI would be a clean and affordable option to new transmission or a new fossil-fuel facility.

With the system operator’s decision, PG&E will move forward to upgrade existing substations and develop new clean-energy resources in Oakland to provide an alternative to the generating facility.

The OCEI would mark the first time that local clean-energy resources are proactively deployed as an alternative to fossil-fuel generation for transmission reliability in PG&E’s service area.

PG&E will continue to collaborate with community choice aggregator East Bay Community Energy to determine and meet the clean-energy and reliability needs of local customers.

Depending on the exact resource mix, the market solicitation is expected to result in 20 to 45 megawatts of clean energy resources.

PG&E invited multiple stakeholders to weigh in on the proposal, including the city of Oakland; the International Brotherhood of Electric Workers Local 1245; the Port of Oakland; environmental groups such as the Environmental Defense Fund, the West Oakland Environmental Indicators Project and the Natural Resources Defense Council; and businesses that neighbor the site.

PG&E will seek cost recovery for the battery storage with the Federal Energy Regulatory Commission, and for other distributed energy resources with the California Public Utilities Commission. PG&E expects to make its filing with the state commission by the end of 2018. The Oakland Clean Energy Initiative has a forecasted in-service date of mid-2022.

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