Approval of Regulations for AB 1373 Publicly Owned Utility Capacity Payment Implementation

The California Energy Commission is implementing regulations to enforce Assembly Bill 1373, which mandates the Department of Water Resources to monitor whether local publicly owned electric utilities within the California Independent System Operator’s Balancing Authority Area have secured resources through the Electricity Supply Strategic Reliability Reserve Program to address reliability shortfalls in any given month. Utilities that fail to meet their minimum planning reserve margin during those months will be subject to an annual capacity payment assessed by the Energy Commission, with proceeds directed into the Electricity Supply Strategic Reliability Reserve Fund. These new regulatory provisions, codified as Sections 1395 and 1396 in Title 20 of the California Code of Regulations, establish the precise methodology for calculating, assessing, and collecting these payments, ensuring consistency and accountability across all affected utilities. The regulations systematize the process by which the Energy Commission identifies noncompliant utilities, determines the amount of the capacity payment based on their reserve margin deficiency, and enforces the timely deposit of funds into the State’s reserve account. This framework strengthens California’s grid reliability by incentivizing utilities to proactively secure adequate resources and penalizing those that fall short of required reserves. The implementation is overseen by the Energy Commission with direct oversight from Attorney Chad Oliver, and the regulations apply exclusively to publicly owned utilities operating under the California ISO Balancing Authority Area. No set-aside provisions or small business considerations are specified, and the regulatory action is focused solely on ensuring reliability through financial accountability.