Navigating California Energy Hurdles

Seth Hilton
Partner, Energy Development

California’s energy transition is entering a critical phase as regulators grapple with how to meet ambitious emissions targets while maintaining grid reliability amid rapid load growth. In this video, Seth Hilton, a partner in the firm’s energy development group and co-lead of its energy industry group, discusses the near-term regulatory developments that are top of mind for energy clients operating in California.

Seth focuses on the California Public Utilities Commission’s ongoing work to shape long-term procurement policies under the Reliable and Clean Power Procurement (RCP) program, as well as potential interim procurement measures being considered while that framework is finalized. He also highlights persistent challenges around transmission development and interconnection, including congestion in CAISO’s interconnection queues and the permitting and regulatory hurdles facing large-scale transmission projects. Together, these issues will play a defining role in how load-serving entities plan for clean energy compliance and reliability in the years ahead.

Transcript

Seth Hilton. I'm a partner in our energy development group located in San Francisco. I also co-lead our energy industry group.

If I was going to talk about kind of near-term developments that I know a lot of clients are very focused on, at least in terms of California, what we're looking at now is the development of the procurement policies that are going to govern how we meet our emissions goals in California and how we meet our reliability goals in California, especially in light of the significant potential load growth associated with things like electrification and data center development. So, those are the challenges that we're dealing with. And the California Public Utilities Commission is currently looking at a plan for long-term procurement to meet these particular goals, what they call the RCPPP, the reliable and clean power procurement program. So, they're in the midst of developing that. They are also currently looking at potentially kind of stop gap interim procurement while they develop that larger policy. So, in terms of what clients are focusing on now, certainly in my space, that's a significant one. We're going to figure out how long-term these load serving entities are going to be required to procure to meet clean energy and to meet reliability standards.

I think one of the other key hurdles we have in California, and I think this is really nationwide, but certainly we're focused on it in California, it's transmission development and interconnection resources. Those are real challenges. The California Independent System Operator has been working for a number of years to kind of reform its interconnection procedures to address some of these challenges with the huge queues that we have and the difficulty in terms of processing those massive queues from the CAISO's perspective. Some of what will help that process is significant transmission development that we certainly need in California. So those are certainly hurdles but something we're focused on in California and trying to resolve.

I think in terms of transmission development, it's nothing surprising there right, these are major projects that have all the typical challenges of major projects including permitting, including certain regulatory hurdles to get them approved both at the CAISO and at the PUC, and to get them permitted and to get them built. So, you have all those kinds of standard challenges in a state that can create some hurdles for development. So, there is the need to kind of manage through that process and there are certainly opportunities to improve that process so that we'll see more transmission development in the future.