Matt Freedman, Consumer Advocate, on the Importance of California's Clean Energy Infrastructure

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August 1, 2017

I think the most important thing I want to leave the commissioners with, in my opening presentation here, the utilities have primarily procured new resources, particularly on the clean energy front, under long-term contracts. That's what got us to the state of success that we're in today. 

New CCA's, when they form, primarily sign short-term contracts for existing resources. And it takes many years for CCA's to be able to get new projects built. Marin started in 2010 and they look to have a pretty impressive portfolio coming online in the next couple of years. But that's actually quite a long number of years if we try to take that same increment of time and project out into the future. So the very immediate effect of migration to CCA is that we are trading long-term procurement of new resources by the utilities for short-term procurement of existing resources by CCAs. And if the utilities lose a significant chunk of their retail load, they will have no appetite for new resource procurement. You already hear it from them in pretty much every proceeding, they're not interested in signing up new contracts. 

And so, we need the CCAs and the direct access providers to pick up the slack by developing new resources, otherwise, we are facing literally a valley of death for new resource procurement. The pipeline is going to run dry, it already is running dry. And this raises critical questions for this commission and how it conducts its oversight of the CCAs and the DA providers because they need to do heavy lifting to meet state goals. Everyone is going to need to sign long-term contracts, get new resources built. No one is going to be able to get a free pass on this. Because if they rely too heavily on existing resources, then we end up back where we started from which is a supply crunch down the line with higher prices.

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