Dive Brief:

• San Diego Gas & Electric (SDG&E) has issued a Request for Offers (RFO) for up to 140 MW of distributed energy resources, including energy storage, renewable energy, distributed generation, energy efficiency, and demand response for its 2016 Local Capacity Requirement (LCR).
• The utility issued the RFO remain compliant with procurement targets established by state regulators when the San Onofre Nuclear Generation Station was shuttered. That order authorized SDG&E to procure between 500 and 800 MW of preferred resources by 2022 to meet local capacity needs.
• SDG&E wants “third party-owned, contracted resources” for renewables, distributed generation, efficiency, and demand response. For energy storage, SDG&E is will take bids for both “third party owned, contracted resources and energy storage systems to be owned by SDG&E.”

Dive Insight:

When the giant 2,200 MW San Onofre nuclear plant was shuttered, California regulators issued guidelines for how utilities could replace the lost generation. In addition to the 500-800 MW of procurement authorized for SDG&E, regulators also said Southern California Edison could procure between 500 and 700 MW of preferred resources. 

Those resources include renewables and distributed generation, along with gas plants and energy storage. SCE made waves throughout the power sector in 2014 when it announced it would procure more than 260 MW of storage for its first RFO under the local capacity requirements, but attracted some criticism for proposing more than 1,300 MW of gas generation as well. 

This SDG&E RFO doesn't include new gas generation, likely because the utility got 600 MW of it approved last May when the CPUC reversed an earlier proposed decision to halt the Carlsbad gas plant project, approving it in a 4-1 vote.

For energy efficiency resources, the offering must provide for incremental local capacity (MW) or energy savings (MWh) to SDG&E’s existing 2015-2016 EE portfolio and proposed 2017 EE portfolio, as defined by California Independent System Operator (CA ISO) and California Energy Commission (CEC) EE studies.

Demand response bids must offer a minimum aggregate resource capacity of 500 kW, be a supply side resource, offer permanent load shifting, be supported by other resources, be dispatchable by CAISO or SDG&E, and meet CPUC load reduction requirements.

Renewables procured will count towards SDG&E’s Renewable Portfolio Standard (RPS) requirement and so must come from owners and operators of RPS-eligible facilities that interconnect within the San Diego area. 

Bids for energy storage systems can be for a turn-key build, own, transfer approach or a turn-key engineering, procurement, and construction approach.

Because distributed generation (DG) is defined as a preferred resource, SDG&E will include it as part of this offering.

Bids for projects must be in by July 1. Winners will be announced in November.