Resource Adequacy Penalties and Citations
The CPUC Resource Adequacy (RA) Program establishes RA obligations for Load Serving Entities (LSEs) as a key means of ensuring electric grid reliability for all Californians.
The CPUC strictly enforces non-compliance with RA obligations via citations and associated financial penalties. The CPUC expects all LSEs to maintain full compliance with the RA program and avoid citations. There is no waiver for LSEs who are unable to provide their share of System RA; failure to do so jeopardizes the reliability of all customers since insufficient electricity capacity resources can directly causes grid emergencies or outages. The CPUC’s LSEs are required to meet RA obligations, irrespective of price, availability, or penalties, with the limited exception of waiver opportunities.
Key Resources
- For an overview of RA Citations issued from 2010-2023, please see this RA Citations Briefing (February 2024)
- For a database of all RA citations by data, type of citation, name of load serving entity, citation amount, status of citations payment, please see RA Citations Database (current as of February 2024)
- For a copy of each of the Resources Adequacy citations issued, please see RA Citations Listing (click on each year to download a large file with each citation document for that year.)
- For a list of currently issued RA citations, please visit Utility Enforcement Branch's comprehensive list of Energy Citation Programs, see bottom of the page for a current list of all citations issued across all citation programs.
Background & History on Penalties and Citations
The Commission adopted a penalty structure for an LSE’s failure to meet its RA obligations in D.05-10-045 and D.06-06-064, and it has made a few modifications to the penalty structure since those originating decisions.
- In 2011, the CPUC modified the penalty structure of the RA program via D.11-06-022, changing both the penalties applicable under Resolution E-4195 and other program penalties. D.11-06-022 eliminated the penalty for small procurement deficiencies and instead created a Specified Violation for any procurement deficiency remedied within five business days, referred to as an Administrative deficiency.
- Since 2021, the penalty structure has been expanded to include flexible RA requirements and multi-year local RA requirements.
- For deficiencies not cured within five business days, D.19-06-026 raised the local RA penalty price of $3.33/kW-month to $4.25/kW-month. In 2020, the CPUC modified the penalty structure to reflect different penalty amounts by year. The penalty structure provided in the table below was most recently revised in D.20-06-031 to include shaped system penalty prices as shown in Table 1.
- In D.21-06-029, the Commission adopted a tiered point system that went into effect in 2022. An LSE would accrue points for each instance of a system deficiency. Accruing points would push the LSEs into higher tiers subject to penalty multipliers as shown in Tables 2 and 3.
Table 1. Updated RA Penalty Structure as adopted by D.20-06-031 and reflected in the 2023 Filing Guide for System, Local and Flexible Resource Adequacy (RA) Compliance Filings
|
|
Deficiency in either System, Local or Flexible RA Filing (Modifying Appendix A in Resolution E-4195) |
||
|
|
System RA Penalty |
Local RA Penalty |
Flexible RA Penalty |
|
Deficiency cured within five business days from the date of notification by the Energy Division |
$5,000 per incident if the deficiency is 10MW or smaller, $10,000 for a deficiency larger than 10 MW. For the second and each subsequent deficiency in any calendar year, penalties will be $10,000 per incident if the deficiency is 10 MW or smaller, $20,000 for a deficiency larger than 10 MW.
|
$5,000 per incident if the deficiency is 10MW or smaller, $10,000 for a deficiency larger than 10 MW. For the second and each subsequent deficiency in any calendar year, penalties will be $10,000 per incident if the deficiency is 10 MW or smaller, $20,000 for a deficiency larger than 10 MW |
$5,000 per incident if the deficiency is 10MW or smaller, $10,000 for a deficiency larger than 10 MW. For the second and each subsequent deficiency in any calendar year, penalties will be $10,000 per incident if the deficiency is 10 MW or smaller, $20,000 for a deficiency larger than 10 MW |
|
Replaced after five business days from the date of notification or not replaced |
$8.88/kW-month in summer months (May through October) and $4.44/kW-month in non-summer months (November to April) |
$4.25/kW-month
|
$3.33/kW-month
|
Table 2. Points for System RA Deficiency as adopted by D.21-06-029 and reflected in the 2023 Filing Guide for System, Local and Flexible Resource Adequacy (RA) Compliance Filing
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Months |
Points for Each Instance of System RA Deficiency |
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Non-Summer (November – April) |
1 |
|
Summer (May – October) |
2 |
Points shall expire 24 months after the violation. Accrued points within an RA compliance year shall be carried over to the next RA compliance year. The provider of last resort shall not accrue points for a deficiency resulting from unexpected load returns for which a system RA waiver is granted.
On June 29, 2023 the Commission adopted D.23-06-029, which is under the current RA Reform open proceeding R.21-10-002. D.23-06-029 revises the existing penalty structure and is effective beginning with the July 2023 RA filing period. Ordering Paragraph 17 of the decision states:
Penalty points accrued by an LSE will be applied to an LSE’s month-ahead and/or year-ahead Resource Adequacy (RA) penalties. If an LSE enters a higher tier during a year in which it incurs year-ahead deficiencies, the higher penalty will apply beginning with the monthly deficiency when the LSE enters the higher tier. The month in which an LSE accrues points that brings the LSE into the next tier, the higher penalty will apply to the deficient month for which the points were accrued.
In addition, D.23-06-029 Ordering Paragraph 18 adopts that:
All year-ahead Resource Adequacy (RA) deficiencies will be charged at the Tier 1 price, and in the month-ahead RA process, the load-serving entity (LSE) will pay the difference between its month-ahead tier penalty and the Tier 1 penalty that was already paid on its year-ahead RA deficiency, plus the LSE’s current tier price on any incremental month-ahead RA deficiency. The following formula will be applied:
- Year-Ahead penalty = Deficiency Year-Ahead x Tier 1 Price
- Month-Ahead penalty = [(Deficiency Year-Ahead x Tier 1 Price x Tier Price Month-Ahead – Year-Ahead penalty] + (Deficiency Month-Ahead incremental x Tier Price Month-Ahead)
For further details regarding other applicable penalty rules, please consult D.19-06-026, D.20-06-031, D.21-06-029, and D.23-06-029.
Coordination with Utilities Enforcement Branch
The CPUC’s Utilities Enforcement Branch (UEB) prepares RA citations and penalties for consideration by the Commission. While each citation is voted on by the full Commission, the citations are on the Commission’s Energy Citation Programs website (posted below). Publicly available citation information includes the energy citation number, date of citation issuance, LSE, citation amount, and remarks regarding payment or appeal status of the citation.
D.23-06-029 Ordering Paragraph 19 under the current RA Reform open proceeding R.21-10-002 states that the following information is no longer confidential and will be published on the Commission’s website by the Consumer Protection Enforcement Division (CPED) or Energy Division (ED): the type of RA deficiency, month of deficiency, deficiency amount (MW), and any points accrued. The information will be published no earlier than October 1 of the compliance year. For other non-deficiency RA program violations, such as late load forecasts and late RA filings, the information on the RA citation is deemed not confidential and may be published on the Commission’s website by CPED or ED.
For a list of currently issued RA citations, please visit Energy Citation Programs (ca.gov).
For details about the Resource Adequacy program, please visit https://www.cpuc.ca.gov/ra/