SB 338 Aims to Meet Peak Electricity Needs at Low Cost, Low Carbon

Sacramento, State Capitol - Today, the California State Assembly passed Senate Bill 338, authored by State Senator Nancy Skinner (D-Berkeley).

While California’s electricity generation is the cleanest in the nation, the state’s electrical grid often needs to rely on fossil fueled peaker plants when, for example, electricity demand spikes and renewable energy sources, such as solar and wind, are not generating. SB 338 is aimed at ensuring that the state’s peak electricity needs can be met affordably and cleanly.  Specifically, SB 338 directs California’s energy regulators to utilize energy efficiency, demand management, energy storage and other strategies before building costly new generation or increasing reliance on fossil fuels.

“California can demonstrate that a low-cost, low-carbon grid is possible 24/7,” said Senator Nancy Skinner. “Meeting our peak electricity needs with efficiency, demand reduction and storage will help avoid the need to build new fossil power plants and excess generation.”

California still uses fossil fuel – mostly natural gas – to provide energy when electricity demand spikes or when renewable sources are generating intermittently. This means energy providers often have to double build. The US Energy Information Administration estimates that by 2020 double-building could have California producing 21% more electricity than is needed.  The cost of this excess generation and any related new transmission is then passed on to the ratepayer.

Under SB 338 utilities will consider strategies and technologies such as demand response, demand management, energy storage, and energy efficiency to reduce the need to build new fossil fuel power plants or other excess generation, which will ultimately save money for ratepayers.

“As we generate more and more of our electricity from the sun and the wind – it’s also important to use that energy efficiently and effectively,” said Skinner. “Technology exists today to either store clean energy and use it when we need it most, or shift our demand to times our clean energy is available.”

Senate Bill 338 now moves to the Senate for a concurrence vote before heading to the desk of Governor Brown for approval.