(a) The Legislature finds and declares all of the following:

(1) Climate change has increased the frequency and intensity of extreme heat events and increasing levels of variable renewable energy resources necessitate planning for the net load, which is load minus variable renewables, peak in addition to peak load.

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(2) There is a need to reassess how applicable authorities plan to have adequate resources to ensure reliability in all hours of the day. While certain capacity product requirements have been standardized through the Independent System Operator, such as local and flexible capacity obligations, and there have been discussions of increased or even minimum planning reserves margins, there is a need to consider modern metrics to assess the overall reliability performance of the Independent System Operator balancing authority area.

(b) On or before December 31, 2023, the commission shall, as part of a transparent public process that includes input from industry stakeholders, and in direct collaboration with representatives of local publicly owned electric utilities and the Independent System Operator, develop recommendations about approaches to determine an appropriate minimum planning reserve margin for local publicly owned electric utilities within the Independent System Operator balancing authority area sufficient to ensure each local publicly owned electric utility is adequately accounting for its contribution to reliability in the Independent System Operator balancing authority area. The approaches shall take into consideration climate change, extreme weather events, cost effectiveness, and feasibility, and may vary by utility type. The recommendations shall include an implementation timeline taking into account potential impacts on resource needs and availability of clean energy resources. These recommendations shall be used by local publicly owned electric utilities in conformance with subdivision (b) of § 9620 of the Public Utilities Code. The commission shall from time to time revise, as appropriate and in accordance with the process set forth in this subdivision, the planning reserve margin recommendations to ensure that each local publicly owned electric utility is adequately accounting for its contribution to reliability.

(Added by Stats. 2022, Ch. 251, Sec. 14. (AB 209) Effective September 6, 2022.)