California Public Utilities Commission Jointly Issues Root Cause Analysis with Other State Agencies Regarding Rolling Blackouts

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By Tristan Stidham

On October 6, 2020, the California Public Utilities Commission (CPUC) issued a preliminary “Root Cause Analysis” with respect to California’s August 14 and 15, 2020, rolling blackouts—the first time in nearly 20 years that such outages occurred. The CPUC published the analysis in coordination with the California Independent System Operator (CAISO) and the California Energy Commission (CEC), after executives from all three agencies received a scathing letter from Governor Gavin Newsom on August 17, 2020, expressing his “deep concern about the broadscale de-energizations” that occurred in August.  The Governor characterized the fact that the blackouts occurred without warning and sufficient time to prepare “unacceptable and unbefitting of the nation’s largest and most innovative state,” stated that the energy regulators “must do more to ensure reliable service and to safeguard California’s energy future.”  Accordingly, the Governor directed the agencies to prepare a report analyzing the causes of the supply deficiencies, why timely warnings were not provided, and potential actions that can be taken to minimize these events in the future.

The agencies collectively responded to the Governor on August 19, 2020, briefly describing factors that contributed to the blackouts, emphasizing the need for better collaboration among the agencies, and setting forth immediate actions each were taking to prevent further blackouts pending the completion of the root cause analysis.

The CPUC and its counterparts also came under fire from the legislature. On October 12, 2020, the Assembly Committee on Utilities and Energy held an oversight hearing with respect to the August blackouts, issued a white paper providing a further background into the situation, and called on the executives from all three agencies to present the findings from the Preliminary Root Cause Analysis to the Committee.

The Preliminary Root Cause Analysis found that there was no single root cause for the blackouts, but identifies three categories of factors that contributed to them: the climate-change-induced extreme heat storm which resulted in demand for electricity exceeding the existing electricity resource planning targets;  the failure, to balance supply and demand while transitioning to a reliable, clean and affordable resource mix; and practices in the day-ahead energy market that exacerbated the supply challenges under highly stressed conditions.

The Preliminary Root Cause Analysis noted that all of these circumstances combined was an extraordinary event, but acknowledged that it was the responsibility of the CPUC, CAISO, and CEC to plan for such extraordinary events. In a joint press release following the release of the Preliminary Root Cause Analysis, CPUC president Marybel Batier commented, “[t]he extreme heat storm in August was an extraordinary one-in-35-year event that, with climate change, is, unfortunately, becoming more common, . . .We will absolutely adjust our planning, procurement, and market policies to meet these changing circumstances and ensure our energy future is clean, reliable, and affordable for all Californians.”

In the aftermath of the blackouts, the CPUC approved new measures to prevent additional blackouts. These include additional clean energy generation and storage measures and a ten-year investment in the development of new technologies. In the Preliminary Root Cause Analysis, the CPUC outlined additional steps for future conditions similar to those during the August blackouts, including implementing an emergency procurement fund, improving market conditions through a stakeholder process, and partaking in statewide summer assessments and planning.

A final Root Cause Analysis is expected before the end of the year.

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