(a) Each local publicly owned electric utility serving end-use customers shall prudently plan for and procure resources that are adequate to meet its planning reserve margin and peak demand and operating reserves, sufficient to provide reliable electric service to its customers. Customer generation located on the customer’s site or providing electric service through arrangements authorized by Section 218, shall not be subject to these requirements if the customer generation, or the load it serves, meets one of the following criteria:

(1) It takes standby service from the local publicly owned electric utility on a rate schedule that provides for adequate backup planning and operating reserves for the standby customer class.

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(2) It is not physically interconnected to the electric transmission or distribution grid, so that, if the customer generation fails, backup power is not supplied from the electricity grid.

(3) There is physical assurance that the load served by the customer generation will be curtailed concurrently and commensurately with an outage of the customer generation.

(b) Each local publicly owned electric utility serving end-use customers shall, at a minimum, meet the most recent minimum planning reserve and reliability criteria approved by the Board of Trustees of the Western Systems Coordinating Council or the Western Electricity Coordinating Council.

(c) Each local publicly owned electric utility shall prudently plan for and procure energy storage systems that are adequate to meet the requirements of Section 2836.

(d) A local publicly owned electric utility serving end-use customers shall, upon request, provide the Energy Commission with any information the Energy Commission determines is necessary to evaluate the progress made by the local publicly owned electric utility in meeting the requirements of this section, consistent with the annual targets established pursuant to subdivision (c) of § 25310 of the Public Resources Code.

(e) The Energy Commission shall report to the Legislature, to be included in each integrated energy policy report prepared pursuant to § 25302 of the Public Resources Code, regarding the progress made by each local publicly owned electric utility serving end-use customers in meeting the requirements of this section.

(f) A local publicly owned electric utility may meet its minimum planning reserve margin through individual contractual procurement or through an aggregated or pooled portfolio of resources if that aggregation or pooling is defined in a contractual arrangement and each participating local publicly owned electric utility meets its individual minimum planning reserve margin based on its share of the resource portfolio pool.

(Amended by Stats. 2023, Ch. 367, Sec. 11. (AB 1373) Effective October 7, 2023.)