SECTION 1.
(a) The Legislature finds and declares all of the following:(1) Decarbonization of California’s economy will require improved alignment between the operation of a renewable and greenhouse gas emission-free generation supply portfolio and increased demand flexibility enabled by load automation technologies.
(2) Reducing California’s reliance on generation from fossil fuels to maintain grid reliability will require incorporating flexible and automated demand management capabilities into the state’s reliability planning and market operations.
(3) Historically, the State Energy Resources Conservation and Development Commission has included the load impact of demand-side management programs into the state’s electricity demand forecast for reliability planning purposes. This process, however, does not account for the ability of commercially available demand management tools to provide dispatchable, programmable, and automated load shifts in response to wholesale market needs, thereby limiting the ability for these resources to fully support reliability planning through commercial operations to mitigate the consequences of extreme weather events and wholesale market volatility. This has led to an increased reliance on costly emergency-based approaches and out-of-market fossil fuel-based resource procurement to reduce near-term grid outage risks.
(4) In recent years, the Legislature has provided the State Energy Resources Conservation and Development Commission with authority to set load management standards to increase demand flexibility on the grid and has appropriated funding for demand-side and distributed energy resource incentives. These policy and budgetary tools, in combination with the State Energy Resources Conservation and Development Commission’s responsibility to forecast electrical demand, can be synergized to support the integration of demand flexibility into the state’s reliability planning and wholesale capacity market to reduce the state’s reliance on costly emergency-based or out-of-market approaches.
(5) Successful commercialization of demand flexibility market products or services will require these resources to perform, so that the intended demand reduction or load shift can be relied on with a high degree of confidence by grid operators and electricity market participants alike.
(b) It is the intent of the Legislature that the State Energy Resources Conservation and Development Commission should, through its load management rulemaking proceeding and experience administering distributed resource incentives, develop a set of technical guidance and load modification protocols to enable the state to reduce or modify its electrical demand forecast to improve grid reliability.