More than 850 attended this year’s California Independent System Operator (CAISO) Symposium. While most of the conference focused on regional issues and day-ahead scheduling, the opening panel consisted of panelists representing western state utilities. 

Carolyn Winn, CEO of SDG&E, highlighted the need for more solar, wind, hydropower, and storage. She also added that SDG&E will be tripling its energy storage by the end of 2023. When discussing the September heat wave, she emphasized that warmer temperatures are now the norm, and they planned for the extreme temperatures and procured more power. While the state was able to get through the crisis, California needs more resources, demand response, storage, transmission, fire hardening, and communications between all entities. She closed by looking forward. She said transportation electrification is gaining momentum. However, we still use an electricity rate structure that dates back to the gas crisis in the 1970s. She wants to see the modernization of rates. She also wants forecasts to be more regional as our load changes.

Martin Adams, CEO of LADWP, mentioned that the Intermountain rebuild will run on 30% hydrogen by 2025 and eventually transition to 100% hydrogen. He states that long-duration storage has been challenging, and LADWP needs local generation. Adams pointed to hydrogen as the clean fuel LADWP is promoting, but the federal government needs to help lower hydrogen costs. As the state transitions to clean energy, we must consider reliability. LADWP still has most of its assets and does not want to get rid of additional ones until dispatchable assets are available. He pointed out that some batteries during the crisis were repowered by fossil fuels. He also warns that better coordination is needed. Some utilities may have looked at the same out-of-state asset as a backstop. He closed by discussing the need to expedite the regulatory and permitting process. He also mentioned the need for federal funds because the customers cannot pick up the entire tab for greening the industry. Finally, demand response must be more palatable to the public, or it will not work.

Steven Powell, CEO of SCE, led by highlighting how energy storage, imports, and demand response helped alleviate the energy issues during the September heat wave. He also stated that we might not be good at forecasting since we are looking back at history rather than the reality that extreme weather events are more prevalent recently. He also questioned what the right standard for reliability is. He believes the EIM has created better reliability and lowered costs. However, many issues still need to be resolved before we enter an RTO. He is hopeful that EDAM will be in place in the next five years. He is hopeful for a more regional view with more integration, but not fully integrated.

Others that spoke in the opening panel include Stefan Bird, CEO of Pacific Power. He mentioned that more resources are needed, and Pacific Power is looking at 11 pumped storage projects. Jim Shetler, the General Manager of the Balancing Authority of Northern California (BANC), mentioned the need for regional day-ahead markets. He still believes that the grid is challenged regarding dispatchable resources. He is hopeful that a transition to the transition will be developed.

Arne Olson of E3 closed the Symposium by talking about the need for more resources to meet California’s clean energy future. He broke the needs down into three different groups. The first is the technology already available such as wind, solar, heat pumps, and battery storage. The second group is near ready such as offshore and out-of-state wind and distributed energy resources. The final group is items we do not have yet, such as clean alternative fuels and clean, firm generation, whether it is enhanced geothermal, carbon capture with fossil fuels, or more nuclear and hydrogen.

While the Symposium started by focusing on regionalization and day-ahead markets, the panelists focused on more – more transmission, more resources, and more state and federal funding.

The California Public Utilities Commission this week released a long-awaited overhaul of its proposal to regulate rooftop solar installations, removing an unpopular new fee but reducing how much utilities would pay homeowners for supplying power to the grid. 

Under the new proposal, the monthly fee for California rooftop solar customers — a sticking point in a protracted battle over changes to a popular solar incentive program — is off the table.

The Commission has dropped the fee from their latest proposal to update net metering, giving solar companies a win in the contentious debate.  But the proposed changes still include reduced incentives for solar panel owners.

The fee development is welcome news for the solar industry, which warned that a previous proposal could kill the market by taxing rooftop solar customers.  But by dropping it, regulators delayed a decision on how to spread the costs of maintaining the grid.

The new proposal by the California Public Utilities Commission replaces a December 2021 version that generated backlash from the public spurred by solar companies and divided environmental and business groups.  Some environmental groups, along with advocates for low-income people and utilities, argued that the costs of maintaining the grid should be more evenly distributed among customers so that rooftop solar panels could be more affordable.

Solar advocates were still critical of the proposal’s steep reduction in the credit that solar owners would get for giving their excess solar power back to the grid.  Bernadette Del Chiaro, executive director of the California Solar & Storage Association, said the proposed decision would “really hurt” and could “replace the solar tax with a steep solar decline.”

Meanwhile, a coalition of utilities, business, and community groups argued that by dropping the proposed grid fee, regulators failed to address the question of maintenance costs — which, they say, fall disproportionately on Californians without rooftop solar.

“It is extremely disappointing that under this proposal, low-income families and all customers without solar will continue to pay a hidden tax on their electricity bills to subsidize rooftop solar for mostly wealthier Californians,” said Kathy Fairbanks, a spokesperson for the coalition.

Advocates will get a chance to argue their case on Wednesday in a hearing about the proposal.  CPUC Commissioners could vote to approve the new rules as soon as December 15.

After caucusing for more than six hours Thursday, Assembly Democrats voted unanimously to make Assemblyman Robert Rivas, D-Salinas, the next Speaker.  But first, they will re-elect current Speaker Anthony Rendon, D-Lakewood to open the legislative session next month. 

In a negotiated outcome, Assemblymember Robert Rivas will succeed Assembly Speaker Anthony Rendon in late June under a deal that diffuses a long and bitter standoff in the California Legislature.

After caucusing for six hours Thursday, Assembly Democrats emerged with a deal to have Rendon remain in power until the end of June and then hand off caucus leadership to Rivas.

“I look forward to working with Assemblymember Rivas in anticipation of a smooth transition in 2023,” Rendon said in a statement.

Rivas secured commitments in May from a majority of assemblymembers and attempted to initiate a transition. Rendon balked, and a May standoff ended without a conclusive result.  That result opened a rift within the caucus, dividing Democrats to the point that Rivas launched a rival campaign operation that paralleled the traditional Rendon-led structure.

Rivas told reporters Thursday that he was excited to “do the incredibly hard work and exciting work of unifying that caucus.”

The speakership comes with tremendous power to shape policy — including by appointing policy committee chairs with the authority to block or shape legislation — and responsibility for leading Assembly Democrats’ campaign operation.

The protracted standoff profoundly divided the caucus.  Both camps spent months maneuvering and parsing the Assembly rules governing leadership selections.  At one point, there was a very “good rumor” that Rendon floated making Assemblymember Evan Low his successor in exchange for Rendon staying on — a surprising move, given that Rendon last year punished Low for seeking the speakership by stripping him of his influential committee chairmanship.  Low then joined the Rivas coalition and was, at one point, widely viewed as the likely next Appropriations chair.

Term limits made Rendon’s 2024 departure inevitable.  Rivas ascended with the help of numerous members who have been elected in the last couple of cycles, just as Rendon did when he compiled the votes in 2016.  Many of Rendon’s longtime lieutenants departed this year.  Soon Rivas will preside over a transformed caucus: At least 15 incoming members.

Following many months of campaigning and spending, the Golden State’s general election is now in the past.  And as predicted, things don’t look very different.  Governor Gavin Newsom was easily re-elected, and the Legislative Democratic supermajority is still in place – as are Democrats in every Constitutional office.   

Early returns predicted that all of the state’s incumbent Democrats were on the path to being handily reelected: Governor Gavin Newsom, Lt. Governor Eleni Kounalakis, Attorney General Rob Bonta, Secretary of State Shirley Weber, Treasurer Fiona Ma, Insurance Commissioner Ricardo Lara and Superintendent of Public Instruction Tony Thurmond.

Lanhee Chen, the state controller candidate that some thought could be the first Republican to win statewide office in California in nearly two decades, ended up losing to his Democratic opponent Malia Cohen by double digits in early returns — raising questions about the GOP’s future in the state.

When it comes to ballot measures, three easily sailed to victory: Proposition 1, to enshrine the right to abortion and contraception in the state Constitution; Prop. 28, to require the state to spend more money on arts and music education in public schools; and Prop. 31, to uphold a state law banning the sale of certain flavored tobacco products.

On the other hand, voters decisively rejected Props. 26 and 27, which would have legalized sports betting at Native American casinos and online, respectively; and shot down Prop. 29, the third effort in as many elections to increase regulation of kidney dialysis clinics.

Proposition 30, which would levy a new tax on millionaires to fund electric vehicle programs and hire more firefighters, also was defeated (see article on Proposition 30 for more color).

Will Newsom Really Serve Four More Years?

Governor Newsom – as predicted – handily beat Republican state Senator Brian Dahle by double digits.  Last year Newsom defeated the recall by a slightly larger margin, similar to his 2018 election victory over John Cox.  

Whether Newsom will stay in office for the next four years, however, has been the subject of widespread speculation.

Newsom has insisted that his out-of-state travel and spending were all about countering a GOP narrative on the national level and has said on multiple occasions that he has no interest in a presidential 2024 bid.  During the only debate against Dahle, Newsom committed to serving all four years of a second term.

But his actions, which have grabbed the attention of Democrats and Republicans across the country, have been largely perceived as a preliminary tryout for the White House in 2024.

Newsom’s fourth year in office was marked by ambitious policy goals around abortion, gun control, climate change and homelessness.  Since the fall of Roe v. Wade, Newsom has worked to position California as a safe haven for the nation’s abortion seekers and a state that “still believes in freedom.”

Other than calling homelessness his number one priority (he said this in his first term also), Newsom has said little about his specific goals going into a second term.  The increasingly visible problem of homelessness has garnered criticism both in and outside California.  The state is home to nearly a quarter of the nation’s entire homeless population, and sprawling tent encampments have become a common fixture under overpasses, on sidewalks and in public parks.

Newsom, more than any of his predecessors, has put up a lot of state funds to combat the problem, but in recent months has shifted blame to local leaders.  Last week, he issued a blanket rejection of local California governments’ plans to curb homelessness, putting on hold hundreds of millions of dollars in aid.

If Newsom is indeed harboring presidential aspirations, he’ll only have a small window to fulfill them.  President Joe Biden hasn’t bowed out from 2024.  If he does, Vice President Kamala Harris is widely expected to run again in his stead.  Even though the governor has been willing to criticize Democrats on the national stage, he seems reluctant to counter Biden or Harris directly.

Newsom’s New Advisor for Next Term

Also, this week, Newsom announced that he is adding a new chief of staff with the addition of political veteran Dana Williamson, who is set to take over from Jim DeBoo.

Williamson will become Newsom’s third top staffer since he took office. DeBoo said in a text message that it was “time to take some weight off the shoulders and refocus.”

Williamson was previously a trusted adviser to former Governor Jerry Brown and has continued to work in high-level California political campaigns.

Unlike the previous term, Williamson may have helped guide budget negotiations in a time of scarcity.  After enjoying a record budget surplus, California has seen revenue consistently fall short of expectations as the state braces for a potential downturn with tech companies announcing massive layoffs and very few IPOs anticipated.