Resource Adequacy and Wholesale Market Structure for a Future Low-Carbon Power System in California

During the past year, California has begun to consider a number of changes to its electric system to ensure that it retains an affordable and reliable power system in the future, as it continues to lessen its dependence on fossil fuels for supply and moves from highly centralized to increasingly decentralized resource-procurement models. Stakeholders and policy makers - among them the California Public Utility Commission (CPUC) and the California Energy Commission (CEC) – are actively weighing what policies will allow the state to address the challenges of maintaining a robust power supply, ensuring access to affordable energy for its consumers, and meeting its clean energy goals.

Analysis Group Senior Advisor Susan Tierney, an expert in energy policy and the electric industry, has authored a white paper focusing on these issues. Dr. Tierney's report proposes a future structure for the California energy system that addresses questions of both resource adequacy (assuring adequate energy supply) and energy production (pertaining to the overall operation of the power system). The model she proposes combines cost-based and market-based elements, with the object of ensuring that “California's system operates reliably and efficiently as it provides affordable and clean power supply to consumers in a low-carbon economy.”