Statewide Energy Office

Statewide Water and Energy oversees programs funded by the Electricity Supply Reliability Reserve Fund and the Diablo Canyon Extension Fund. Both funds were established in 2022 by legislation that directs DWR, with its expertise as one of the largest power producers in California and prior experience with emergency power procurement, to be a backstop to the State’s traditional electricity supply planning and procurement. 

The Legislature created this role for DWR as California transitions to clean energy and leads the nation in electrification while climate change-induced extreme weather and emergencies are negatively impacting electric reliability. 

The program’s responsibilities include:

  • Developing, owning, or contracting for new emergency and temporary generation to provide incremental power during extreme events
  • Extending the operations of existing resources that would have otherwise retired to ensure a reliable and equitable transition to the clean energy future
  • Interim procurement such as imported energy while California expands its clean generation fleet.

Statewide Water and Energy works closely and collaboratively with the California Air Resources Board (CARB), California Energy Commission (CEC), California Independent System Operator (CAISO), California Natural Resources Agency (CNRA), and California Public Utilities Commission (CPUC).

 

Emergency & Temporary Power Generation

Beginning with Governor Newsom’s 2021 emergency proclamation following the devastating Bootleg Fire, Statewide Water and Energy worked with the CEC and CAISO to develop emergency and temporary power generation projects to address extreme heat and an unusually high demand for electricity. The 2021 work resulted in 120 megawatts of additional generation capacity brought online in under two months.

Since then, Statewide Water and Energy expanded the number of emergency and temporary generators under the Electricity Supply Reliability Reserve Fund to address extreme events that impact electric reliability.

Environmental Documents

As a commitment to our environmental stewardship, Statewide Water and Energy elected to conduct voluntary environmental review of the three projects located in the San Joaquin Valley in the cities of Lodi, Modesto, and Turlock.

Extending the Operations of Retiring Resources

Based on the recommendation of the Statewide Advisory Committee on Cooling Water Intake Structures (SACCWIS), Statewide Water and Energy contracted with approximately 2,800 MW of existing natural gas-fired resources that would have otherwise retired by the end of 2023. These contracts provide generation capacity through the end of 2026, which allows California to address electric reliability concerns more expeditiously by leveraging existing assets during extreme events. Keeping this capacity under contract provides a reliability cushion as the clean energy and storage markets are still buffeted by high prices and ongoing supply chain problems.

 

Similarly, the Diablo Canyon Nuclear Power Plant (DCPP) was slated to retire as early as 2024. Senate Bill 846  determined the continued operation of the DCPP to be in all respects an essential governmental purpose, for the welfare and benefit of California and to protect public peace, health and safety. Pursuant to SB 846, Statewide Water and Energy entered into a loan agreement with the owner/operator of the DCPP, Pacific Gas & Electric, to extend the operations of the DCPP for approximately five years via the Diablo Canyon Extension Fund.

 

Imported Firm Energy

The Electricity Supply Reliability Reserve Fund also allowed for reimbursement of the above-market costs of imported electricity above and beyond traditional planning standards in the CPUC’s resource adequacy program. Statewide Water and Energy successfully secured imports, including emissions-free imports, to serve demand during the most challenging times of the September 2022 heat wave that set records across California.

 

Electricity Supply Reliability Reserve Fund Progress Reports