Resource Adequacy Waivers
The CPUC Resource Adequacy (RA) Program establishes RA obligations for Load Serving Entities (LSEs) as a key means of ensuring electric grid reliability for all Californians.
With the exception of the two waiver opportunities described below, the CPUC’s LSEs are required to meet RA obligations, irrespective of price, availability, or penalties. The CPUC strictly enforces non-compliance with RA obligations via penalties and expects all LSEs to maintain full compliance with the RA program. There is no waiver for LSEs who are unable to provide their share of System RA; failure to do so jeopardizes the reliability of all customers since insufficient electricity capacity can directly cause grid emergencies or outages.
Local Resource Adequacy Waiver Process
In adopting the Local RA requirement framework in D.06-06-064, the CPUC simultaneously determined a waiver process was necessary as a market power mitigation measure. Specifically, the decision allows LSEs to request relief from their local RA procurement obligation under certain conditions, although the market for Local RA is frequently a tight market. To be considered for a Local RA waiver, an LSE must provide a demonstration that it has made every commercially reasonable effort to contract for Local RA resources.
- Pursuant to D.06-06-064, LSEs who cannot meet their local RA requirements may file a local waiver request. D.19-06-026 requires that the local waiver requests be filed through a Tier 2 Advice Letter. Once a local waiver is submitted, Energy Division then evaluates the local waiver requests and issues disposition letters (posted below). A waiver request must include both of the following:
- a demonstration that the LSE reasonably and in good faith solicited bids for its RAR capacity needs along with accompanying information about the terms and conditions of the Request for Offer or other for solicitation, and
- a demonstration that despite having actively pursued all commercially reasonable efforts to acquire the resources needed to meet the LSE's local procurement obligation, it either:
(a) receive no bids, or
(b) received no bids for an unbundled RA capacity contract of under $51 per kW-year or for a bundled capacity and energy product of under $73 per kW-year or
(c) received bids below these thresholds but such bids included what the LSE believes are unreasonable terms and/or conditions, in which case the waiver request demonstrate why such items and/or conditions are unreasonable.
An LSE's waiver request that meets these requirements is a necessary but not sufficient condition for the grant of such waiver. The Commission will also consider other information brought to its attention regarding the reasonableness of the waiver requested.
Local Waivers Issued: 2022 | 2021 | 2020 | 2019 | 2018
System and Flexible Waiver Process for Provider of Last Resort (POLR)
Providers of Last Resort (POLRs) are required to continue electric energy service when a Community Choice Aggregator (CCA) fails to provide it to customers. SB-520 passed in 2019 to require the CPUC to develop a comprehensive POLR framework. To enact SB 520, the CPUC established R.21-03-011. The investor-owned utility (IOU) is currently responsible for being POLR.
In D.20-06-031 Ordering Paragraph 21, the Commission adopted a POLR waiver for limited system and flexible RA:
The provider of last resort (POLR) may be eligible for a limited system or flexible Resource Adequacy (RA) waiver for instances in which retail load is:
(a) returned to the POLR with insufficient time to meet the RA requirement, or
(b) not transferred from the POLR to another load-serving entity (LSE) as planned as a result of action or inaction by the LSE. The waiver shall be submitted through a Tier 2 Advice Letter. The POLR waiver process shall be effective immediately.
For details about the Resource Adequacy program, please visit https://www.cpuc.ca.gov/ra/