USA – CALIFORNIA Law and Practice Contributed by: Nora Sheriff, Gwenneth O’Hara, Samir Hafez, Antonio Carrejo and Elisa Rivas, Buchalter
2.3 Supply Mix of Electricity California’s electricity supply includes in-state generation and out-of-state imports. The US Energy Information Administration’s profile analysis of 16 May 2024 indicates that: “California imports more electricity than any other state and typically receives between one- fifth and one-third of its electricity supply from outside of the state. However, in 2023, in-state utility-scale electricity generation equalled about 90% of California’s electricity sales.” The CEC’s most recent comprehensive report shows that, in 2023, California’s total system electric generation (all utility-scale, in-state gen- eration plus net electricity imports) was 281,140 GWh. The supply mix of that generation was com- prised of the following. • Natural gas: approximately 37%. • Renewable energy sources (excluding large hydroelectric) – approximately 37%, broken down as follows: (a) solar (utility-scale and rooftop) – approxi- mately 17%; (b) wind – approximately 11%; and (c) geothermal, biomass and small hydro- electric – approximately 9%. • Large hydroelectric power: about 12%. • Nuclear power: approximately 9% (note that the majority of this supply was associated with California’s single operating nuclear plant, Diablo Canyon Nuclear Power Plant (see 3.5 Decommissioning a Generation Facility )). • Unspecified: approximately 4%. • Coal: 1.77%. • Oil: 0.01%.
FERC jurisdiction FERC regulates interstate transmission service and wholesale electricity sales, including import and export transactions. Transmission rights Entities scheduling imports and exports must possess or acquire necessary transmission ser- vice rights on the interconnections. Construc- tion and operation of international transmission lines require permits from the US Department of Energy. RA To satisfy California’s RA requirements, imports must meet specific deliverability and availabil- ity requirements established by the CPUC and CAISO. Typical Circumstances and Pricing California typically imports electricity dur- ing peak demand periods – ie, evening ramp period when solar output declines, or summer heatwaves when out-of-state power is cheap- er relative to in-state power. Exports typically occur when California has surplus generation, especially during midday when solar output is abundant. Pricing for imports in the CAISO market is determined by competitive bids at the intertie scheduling points. The clearing price for imports contributes to the LMP, reflecting real-time sup- ply, demand and transmission congestion at the relevant intertie. Exports are priced at the CAISO LMP at the relevant intertie. This energy then competes in the importing jurisdiction’s balanc- ing authority market, or is delivered based on bilateral agreement terms.
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