SoCal Edison Signs Historic Agreements for 2.2 Gigs New Capacity

Southern California Edison (SCE) made U.S. power industry history Nov. 5, signing local procurement contracts for 2.221 gigawatts of electrical power from a diverse range of new energy resources. This represents roughly 10 percent of peak customer usage across its service territory, which spans 50,000 square miles within central, coastal and Southern California.

Setting a precedent in the U.S. power sector, SCE for the first time evaluated over 1,800 final offers and a wide range of energy resource types “in a head-to-head competition to meet a specific reliability objective,” the Edison International power utility stated in a new release.

In the end, SCE selected 69 offers from “preferred” resources that are cleaner or more environmentally sustainable than conventional energy resources and energy storage facilities, including intelligent energy storage systems. SCE also signed contracts for five new natural gas power plants. All are subject to approval from the California Public Utilities Commission.

"Preferred" environmentally sustainable resources loom large in meeting SCE's local electricity needs

Totaling 2,221 MWs, collectively the contracts SCE signed Nov. 5 have the capacity to meet the electricity needs of some 950,000 homes. In signing them, SCE is following through on state forecasts of local electricity reliability needs. The contracts also move the company closer to its own plan to meet long-term electricity needs throughout its service territory given the closure of the San Onofre Nuclear Generating Station and the anticipated retirement of older natural gas power generation plants along the Southern California coast, the investor-owned utility (IOU) explained.

“The competitive solicitation sought not only resources to help enhance the reliability of the power network in specific geographic locations (Los Angeles Basin and Ventura/Santa Barbara), but also to encourage conservation and develop new technologies and innovative solutions to meet identified local electric reliability needs in Southern California.”

With clean, environmentally sustainable “preferred” resources making up the vast majority of the new electricity supply contracts, SCE will be making a large contribution in terms of helping California meet its renewable energy goals, which call for renewable energy resources to supply one-third of the state's power needs by 2020.

Head-to-head competition across a diverse range of new energy resources

In addition to renewable, emissions-free solar photovoltaic (PV) electricity and natural gas-fueled generating capacity, the wide variety of energy resources SCE solicited proposals for included combined heat and power, distributed generation, energy storage, energy efficiency, resource adequacy and demand response systems, in which customers shift electricity usage during peak demand periods.

“This solicitation is the first time that such a wide range of new diverse resources were directly competing in the purchasing process,” Colin Cushnie, SCE vice president, Energy Procurement & Management, was quoted in the news release. “No single energy source can give us everything we need all of the time, particularly with our emphasis to use environmentally clean resources. To provide for flexibility, we need to accommodate a mix of energy resources.”

“Using energy more wisely, improving energy diversity and increasing flexibility are the keys to maintaining and improving the reliability of Southern California’s grid while incorporating renewables and new technologies,” said Cushnie. “These projects will provide energy solutions to meet the reliability and affordability needs of electricity customers.”

SCE's latest solicitation was historic and precedent-setting in more ways than one. It was also the first time SCE contracted with energy storage projects through a competitive solicitation, according to the company.

Historic first utility energy storage solicitation

Among the project contracts signed by SCE was one with Millbrae, California-based Stem, a pioneering developer of advanced energy storage technology, systems and analytics capable of managing fleets of geographically dispersed and technologically diverse energy storage systems.

As per the the terms of the multi-year local power capacity procurement contract, Stem will deploy 85 MWs of advanced, behind-the-meter energy storage capacity at customer locations in the West Los Angeles Basin, Stem explains in a press release. Stem's smart, behind-the-meter energy storage systems “will serve as dispatchable capacity to enhance the local reliability of the region,” the company states.

“SCE has a track record of leadership and national influence in embracing innovative preferred resources, from its support of solar power and energy efficiency to its rollout of demand response programs,” said John Carrington, CEO of Stem. “We have spent several years building software, financing, and innovative distributed storage solutions that provide a dynamic grid resource. The result is a solution that looks and feels familiar to utilities and benefits their customers.

Added Janice Lin, co-founder and Executive Director of the California Energy Storage Alliance: “This is a major win for behind-the-meter storage, demonstrating that this technology is a valuable tool for both utilities and their commercial and industrial customers.. SCE is a pioneer in leveraging customer-sited storage for local capacity requirements and should be commended for its efforts to make storage an integral part of its operations.”

More information on the 2,221 MWs worth of contracts SCE signed November 5 is available on an SCE web page.

*Image credits: 1), 2): SCE; 3) Stem