The Joint Reliability Plan resulted from extensive cooperation between Commission and CAISO staff following long-term resource adequacy summit jointly hosted by the Commission and the CAISO in February 2013. Following the summit, staff discussed a range of policy options to respond to California’s emerging reliability challenges while accommodating the unique history and structure of California’s energy and capacity markets. The overall objective for this proceeding is to ensure that California’s electric reliability framework continues to adapt as needed to meet the changing requirements of the electric grid while facilitating the achievement of California’s environmental policies at just and reasonable rates. The current reliability framework has provided for reliable operation of the transmission grid over the past decade. Yet, fundamental changes are expected as unprecedented levels of renewable resources reach commercial operation to meet California’s environmental laws, including required reductions in greenhouse gas emissions, the renewable portfolio standard, and retiring gas-fired power plants that use once through cooling technology. This Commission has been anticipating these changes and taking steps to prepare for them in the last several cycles of the Long-Term Procurement Planning (LTPP) and Resource Adequacy (RA) proceedings, but as new operational and market challenges emerge we recognize the need to remain aware and responsive in order to ensure reliable electricity supplies. In the discussions leading to the development of the three initiatives we agreed to undertake by adopting the Joint Reliability Plan, the CAISO staff reiterated its opinion that California should institute a three to five-year forward capacity market. But we have previously considered and rejected proposals to institute a centralized capacity auction in California, and we will not revisit our
RELIABILITY OF CORPORATION NOVEMBER 8, 2013 I. EXECUTIVE SUMMARY The California Public Utilities Commission (CPUC) and California Independent System Operator Corporation (ISO) present this Joint Reliability Plan describing steps the two entities plan to take to ensure long-term electric reliability in California. Inter-organizational cooperation between the CPUC and ISO on resource and reliability planning has always been critical, but expected changes over the next decade merit the two organizations renewing their joint commitment to providing a reliable electric supply, at just and reasonable rates, while supporting the achievement of California’s environmental policies. The regulations as well as the planning and contracting processes that currently guide resource procurement in California have provided for reliable electricity service over the past decade. But California’s electric system is undergoing fundamental changes as unprecedented levels of renewable resources reach commercial operation to meet California’s renewable portfolio standard. California has also adopted a policy to retire, repower, or replace tens of thousands of megawatts of gas-fired power plants that use once through cooling technology in order to protect marine life. These transformations pose new operational and market challenges that resource planners and transmission operators must be aware of, and responsive to, in order to ensure reliable electricity supplies. Accordingly, the CPUC and ISO agree on the guiding principles described herein and to consider three proposed initiatives set forth in this Joint Reliability Plan. This Joint Reliability Plan does not commit the CPUC or ISO to reach specific policy outcomes for the three proposed initiatives, but it commits the CPUC and ISO to consider their design and implementation through appropriate CPUC proceedings and ISO stakeholder processes. The CPUC and ISO will use the Joint Reliability Plan to