By Wyatt Page

On February 20, 2025, the California Public Utilities Commission (CPUC) adopted D.25-02-026 in Rulemaking 20-05-003 for the CPUC’s annual requirement to develop a recommended set of portfolios for the California Independent System Operator (CAISO) to use and analyze in their annual Transmission Planning Process (TPP). This rulemaking is important for accurately projecting California’s electricity transmission demands. If California overbuilds the grid infrastructure, consumers’ rates could be inefficiently spent under underutilized infrastructure. However, new transmission infrastructure needs proper expansion to ensure reliable, accessible power. Therefore, for California to meet its lofty GHG emission reduction goals and swiftly reduce our reliance on fossil fuels for energy production, the CPUC, the California Energy Commission (CEC), and CAISO must work together in the TPP process.

The CPUC’s role is to create recommended portfolios and update the methodologies used to create the portfolios’ projections. The CPUC created two types of portfolios, a “base case portfolio” and a “sensitivity portfolio.” See Fact Sheet for R.20-05-003 (displaying a graph of the two portfolios and providing more background information). These portfolios recommend projections for transmission needs of multiple resources such as natural gas, solar, geothermal, out-of-state wind, in-state wind, and pumped hydro. The portfolios make these projections based on the key model years of 2035 (a 10-year projection) and 2040 (a 15-year projection). The complicated process is computed through multiple layers of modeling data, data mapping, and data simulations. See 2025–2026 TPP Proposed Decision Modeling & Analysis (presentation summarizing updated RESOLVE, SERVM, and bushbar mapping analysis, which are the modeling methods used). The base case portfolio represents the most likely or expected future scenario by including approved or committed transmission projects, electricity generation projects, and demand forecasts. Since the future is uncertain, the sensitivity portfolios provide projections for uncertain and risk factors. The CPUC recommends using the 2025–2026 TPP base case portfolio since the sensitivity portfolios have too much uncertainty this year due to potential offshore wind, geothermal, and long-duration energy storage projects.

The CPUC concludes that “we are satisfied that these results are acceptable and sufficient to conclude that the base case portfolio is a reasonable one for the CAISO to analyze further for transmission needs. We will continue to closely monitor actual progress toward the new resource investment and GHG reduction results from these portfolios and will conduct similar analysis with our TPP portfolio recommendations next year and in subsequent years.”