A California Public Utilities Commission (CPUC) judge proposed the commission order an additional 6 GW of capacity in the state between 2029 and 2032, adding significant capacity to the state’s ambitious buildout plans.
The proposal calls for 3 GW of additional capacity by 2029, 4.5 GW by 2031 and 6 GW by 2032.
“Ordering procurement now may help load-serving entities take advantage of any projects eligible for expiring federal tax credits or other incentives, such as grants or loans, that may be at risk at the federal level,” said the CPUC ruling.
Under the One Big Beautiful Bill passed this July 4, lucrative incentives like the 30% Investment Tax Credit awarded to renewable energy projects are set to expire several years ahead of their original schedule set by the Inflation Reduction Act of 2022.
CPUC approved in 2022 a resource plan than requires over 40 GW of capacity procurement by 2032. The planned procurement mix by 2032 includes significant amounts of utility-scale solar (17.5 GW), battery storage (13.5 GW), and wind capacity (3.5 GW). It also includes 2 GW of non-lithium-ion long-duration storage. The state targets 100% emissions-free electricity by 2045.
“Some amount of this procurement may be a year or two premature, but would likely still be needed to achieve long-term goals,” said the CPUC proposal to expand by 6 GW.
Electricity demand forecasts are steadily increasing in California due to expected growth in data centers, increased electric vehicle charging and expanded building electrification, said the ruling.
RTO Insider noted that compared with the 2023 Integrated Energy Policy Report demand forecast, the 2024 forecast shows an additional 2 GW of capacity needed by 2030 and 5.8 GW by 2040.
The CPUC ruling noted that the loss of federal clean energy tax credits would lead to “negative cost impacts” for ratepayers, suggesting the state may be able to secure rates by amplifying its procurement efforts now.
However, other parties warned that too large of a procurement push could increase ratepayer costs, “due to a frenzy of procurement by a large number of [Load Serving Entities] in an already tight market.”
The report said utilities argue they are already “procuring as much as possible and more requirements would not assist in the areas where procurement is delayed because of interconnection and permitting issues or supply chain issues.”
The CPUC will collect stakeholder comments on the 6 GW procurement proposal through October 22, 2025.
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