Please provide your organization’s overall comments on the 2024 and 2028 Local Capacity Requirements Technical Study Final Results.
Vistra is a leading Fortune 500 integrated retail electricity and power generation company based in Irving, Texas, providing essential resources for customers, commerce, and communities. Vistra combines an innovative, customer-centric approach to retail with safe, reliable, diverse, and efficient power generation. Vistra is guided by four core principles: we do business the right way, we work as a team, we compete to win, and we care about our stakeholders, including our customers, our communities where we work and live, our employees, and our investors. Vistra brings these principles to its activities in California including through its commitment to and efforts to support the clean energy transition, primarily to bring new stand-alone storage online as renewable integration or load shifting is currently the main service needed to support grid reliability as indicated by the CAISO energy clearing prices.
Through its subsidiaries, Vistra operates the Moss Landing Energy Storage Facility (400 MW / 1,600 MWh) and the natural gas-fired Moss Landing Power Plant (1,130 MW), which provide Resource Adequacy capacity and energy and ancillary service (“E&AS”) products to the grid. By 2023, Vistra will increase its storage operations to 750 MW / 3,000 MWh. Vistra has plans to develop up to an additional 1,460 MW / 5,840 MWh of combined storage projects in California at its Oakland, Moss Landing, and Morro Bay sites to provide Resource Adequacy (“RA”) capacity and E&AS products to enhance the reliability of the California grid. Vistra is committed to its plan to retire its jet fuel-fired Oakland Power Plant (110 MW) and replace it with storage to support local needs.
Vistra is pursuing our storage development plans because we believe they are in the best interest of the state of California, including our plans to retire the Oakland Power Plant jet-fuel fired power plant. Further, we also believe our storage development is in the best interest of CAISO reliability. The storage development is “required” to complete the Oakland Clean Energy Initiative (OCEI) project approved in 2017-2018 Transmission Plan.
Our efforts to retire the legacy RMR units at Oakland and replace them with energy storage consistent with the CAISO transmission plan have been hindered by the CAISO local capacity report, which does not identify any need associated with the retirement of legacy units for new resources in Oakland sub-area, in fact it is not identifying any sub-area requirement. Consequently, Pacific Gas & Electric Central Procurement Entity appears to have no requirement to procure a minimum amount of RA within the local sub-area. This results in an Oakland area resource being evaluated against resources within the Greater Bay area, instead of its sub-area. This makes it unlikely that a new resource, even a repowered resource, will be competitive within the Greater Bay area to facilitate an agreement to allow us to transition the generation at the Oakland jet-fuel powered aging asset to a reliable, emission-neutral asset.
Our understanding is that CAISO’s intent is that there should be local requirements for the Oakland sub-area that require a minimum amount of capacity and energy to meet the local reliability needs assuming the Oakland Power Plant RMR unit is retired. It is critical the CAISO find a way to clarify whether the storage in the Oakland Clean Energy Initiative is required or not. If the CAISO is no longer identifying a minimum storage need in the Oakland sub-area, as this report appears to suggest, then the CAISO should begin planning for a transmission solution without storage element from OCEI. Based on the draft 2022-2023 TPP clarifications and statements regarding Oakland, Vistra understands the storage elements are still expected. If so, then Oakland does have a minimum sub-area local requirement of at least 44 MW (173 MWh across a four-hour RA resource). In short, there seems to be a disconnect between the local capacity report, and CAISO’s goals identified in its most recent Transmission Planning Process.
Vistra requests the CAISO confirm in the 2024 LCR report whether storage is needed to meet an Oakland sub-area requirement, or not. If the CAISO continues to rely on Oakland storage, rather than propose a wires-only solution to the local need, then the CAISO should update the LCR results filed with the CPUC on April 6, 2023 to show a local need in Oakland for 44 MW of 4-hour RA resource or 35 MW of 5-hour resource. Lack of clarity on this issue could be viewed as an affirmative decision that the storage element of Oakland Clean Energy Initiative is no longer active element under the approved 2017-2018 project.
Vistra requests the CAISO clarify if it expects both the Oakland Clean Energy Initiative transmission upgrades and the corresponding storage facility to be in-service in 2024, or only the transmission upgrades. There should be no expectation for storage at the Oakland C substation in 2024. Vistra believes it would be inaccurate to assume any storage in-service until an agreement is executed, which could be at the earliest in Q3 or Q4 2023 at the conclusion of PG&E CPE 2023 solicitation process. However, agreement by end of 2023 is becoming increasingly unlikely because the CAISO has chosen not to set an Oakland sub-area requirement. We understand CAISO is not setting an Oakland sub-area requirement because the local area requirement range identified through 2028 can be met by the existing 110 MW of the Oakland Power Plant.
We should not expect PG&E to procure a new resource in this area if CAISO does not identify a requirement for such new resource. Vistra cautions the CAISO and others against delaying addressing the need to retire and replace the Oakland Power Plant. Ideally, the California Public Utility Commission’s local capacity requirements informed by CAISO’s report would result in multi-year forward requirements that allow developers to bring non-conventional preferred resources online with more certainty. We need certainty that the new resource we are developing will meet not only the minimum capacity but also minimum energy requirements in the local area, and there will be the necessary incentives to procure new resources to address forward needs. Without adding the minimum energy requirement, Vistra and other developers will be forced to manage the uncertainty of whether they are developing the right size of new resource to meet the local need. Without allowing local RA requirements in forward years (2025 or 2026) to be met by new resources, we are concerned there will continue to be a lag in curing the local areas that have deficiencies. It is important that Vistra and other developers have certainty that we are developing the right size of new resources and that there is a mechanism to value local development to allow us to cure any sub-areas deficiencies.
 2022-2023 Transmission Plan DRAFT, California ISO, April 3, 2023, page 168, http://www.caiso.com/InitiativeDocuments/Draft-2022-2023-Transmission-Plan.pdf. CAISO states, “The reliability planning for the Oakland 115 kV system anticipating the retirement of local generation is advancing mitigations that include in-station transmission upgrades, an in-front-of-the-meter energy storage project and load-modifying preferred resources. These resources are being pursued through the PG&E “Oakland Clean Energy Initiative” approved in the 2017-2018 Transmission Plan. Based on the development in the procurement activities, the location of the entire 36 MW and 173 MWh storage need has been moved to Oakland C substation in the 2021-2022 TPP. This continues to satisfy the local area need in absence of the local thermal generation. The approved project is expected to be in-service in 2024.”
 Vistra filed a motion for leave to late-file comments on CAISO draft 2024 Local Capacity Technical Report, April 20, 2023 and filed comments that were served on parties to the Resource Adequacy proceeding on April 20, 2023.