BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking to Develop an Electricity Integrated Resource Planning Framework and to Coordinate and Refine Long-Term Procurement Planning Requirements.

Rulemaking 16-02-007

(Filed February 11, 2016)

CALPINE ENERGY SOLUTIONS, LLC 2018 INTEGRATED RESOURCE PLAN

PUBLIC VERSION

August 1, 2018

Greg Bass Director, Western Regulatory Affairs Calpine Energy Solutions, LLC 401 West A Street, Suite 500 San Diego, CA 92101 Tel: (619) 684-8199 Email: Greg.Bass@calpinesolutions.com

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Order Instituting Rulemaking to Develop an Electricity Integrated Resource Planning Framework and to Coordinate and Refine Long-Term Procurement Planning Requirements.

Rulemaking 16-02-007

(Filed February 11, 2016)

CALPINE ENERGY SOLUTIONS, LLC 2018 INTEGRATED RESOURCE PLAN

PUBLIC VERSION

Pursuant to Decision 18-02-018, Calpine Energy Solutions, LLC (“Calpine Solutions”)

submits its 2018 Integrated Resource Plan (“IRP”). The public version of Calpine Solutions’

2018 IRP has removed in its entirety confidential Appendix A Confidential Worksheets. In

accordance with instructions from the Commission Docket Office, the confidential version of

Calpine Solutions’ 2018 IRP was tendered under seal in digital format.

Dated: August 1, 2018 Respectfully submitted,

/s/

Greg Bass Director, Western Regulatory Affairs Calpine Energy Solutions, LLC 401 West A Street, Suite 500 San Diego, CA 92101 Tel: (619) 684-8199 Email: Greg.Bass@calpinesolutions.com

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Standard LSE Plan 1 2

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CALPINE ENERGY SOLUTIONS, LLC 4

2018 INTEGRATED RESOURCE PLAN 5

August 1, 2018 6

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Table of Contents 1

Table of Contents ............................................................................................................. 2 2 1. Executive Summary ................................................................................................. 3 3 2. Study Design ............................................................................................................. 4 4

a. Objectives ............................................................................................................ 4 5 b. Methodology ........................................................................................................ 4 6

i. Modeling Tool(s) ................................................................................................ 4 7 ii. Modeling Approach ........................................................................................ 5 8 iii. Assumptions .................................................................................................... 6 9

3. Study Results ............................................................................................................ 9 10 a. Portfolio Results ................................................................................................. 9 11 b. Preferred and Conforming Portfolios ............................................................ 9 12

i. Local Air Pollutant Minimization .................................................................. 15 13 ii. Cost and Rate Analysis ................................................................................. 16 14

c. Deviations from Current Resource Plans ....................................................... 17 15 d. Local Needs Analysis ....................................................................................... 17 16

4. Action Plan .............................................................................................................. 17 17 a. Proposed Activities .......................................................................................... 17 18 b. Barrier Analysis ................................................................................................ 18 19 c. Proposed Commission Direction ...................................................................... 18 20

5. Data ........................................................................................................................... 18 21 a. Baseline Resource Data Template ................................................................ 18 22 b. New Resource Data Template ........................................................................ 19 23 c. Other Data Reporting Guidelines ..................................................................... 19 24

6. Lessons Learned..................................................................................................... 19 25 7. Appendix A Confidential Worksheets………………………………………...20 26 27

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1. Executive Summary 1

Calpine Energy Solutions, LLC (Calpine Solutions) is an Electricity Service Provider (ESP) registered 2 with the California Public Utilities Commission (Commission) with ESP #1364. Calpine Solutions has 3 been actively serving commercial, industrial and institutional customers since California restructured its 4 wholesale and retail energy markets in 1998, albeit under different names as corporate ownership of 5 Calpine Solutions has changed over time. Calpine Solutions does not serve residential customers. 6

Calpine Solutions analyzed two energy portfolios1 as part of its integrated resource plan (IRP): a 7 conforming portfolio of generation resources assuming forecasted 2019 demand levels and the default 8 system load shape as ordered by the Commission and an alternative, preferred portfolio of generation 9 resources constructed assuming 2019 demand levels and Calpine Solutions’ customers historical load 10 shape. These portfolios are similar in many ways. Each portfolio has the same: 11

• Amount of annual wholesale demand 12 • Renewable energy targets based on the current renewable portfolio standard (RPS) requirements 13 • Total supply-side renewable energy in the portfolio, except in year 2030 when additional 14

greenhouse gas (GHG) free energy—assumed to be procured from RPS portfolio content 15 category one (PCC 1) renewable resources—is added to meet GHG emissions targets 16

• RPS PCC 1 renewable resource mix of existing wind and solar based on 2018 procurement 17 • Additions of new lithium ion batteries based on a load ratio share from that added in the reference 18

system portfolio 19

The portfolios differ in two key respects: 20

• The conforming portfolio includes a forecast of customer-owned behind-the-meter solar 21 generation based on defaults embedded in the Commission-approved GHG calculator 22 spreadsheet. The alternative portfolio assumes the same load shape over time, essentially 23 including no new customer solar. 24

• Due to the different load shapes between the two portfolios, the total renewable energy added to 25 each portfolio in 2030 to meet the Commission-approved GHG emission benchmark is different 26 for each portfolio, with the conforming portfolio requiring significantly more GHG-free energy 27 (22% of wholesale energy demand) than the alternative portfolio (6% of wholesale energy 28 demand). This result indicates that when Calpine Solutions uses its customer historical load 29 shape, achieving GHG emissions targets with wind and solar energy resources is more effective 30 than when using the conforming portfolio system load shape. 31

Given the divergent results between the two portfolios, Calpine Solutions concludes that the conforming 32 portfolio may not have the optimal mix of resources to achieve the GHG emissions benchmark for 33 Calpine Solutions. California has added a significant amount of customer behind-the-meter solar 34 generation to date; continuing to add solar generation provides a diminishing GHG emission reduction 35 return. Calpine Solutions will continue to monitor its customer load shape over time, and if it changes, 36 1 Calpine Solutions provides a summary of its current RA portfolio, but does not speculate as to what resources will meet future RA requirements.

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Calpine Solutions will consider diversifying renewable energy purchases away from solar generation to 1 other renewable energy technologies in order to better meet the GHG emissions target. 2

Calpine Solutions also commits to the following: 3

• Meeting all Commission promulgated Resource Adequacy (RA) requirements including local RA 4 and any future multi-year RA requirements 5

• Procuring adequate renewable energy and renewable energy credits (RECs) from contracts of ten 6 years or greater duration (long-term) in order to meet Senate Bill 350 (DeLeon) requirements and 7 Commission promulgated RPS rules 8

• Reporting on RPS long-term contracting results in its next IRP 9 • Considering the impact to disadvantaged communities in its decision process prior to procuring 10

energy directly from non-renewable energy resources responsible for local air pollution should 11 any such unforeseen need arise 12

2. Study Design 13

a. Objectives 14

Calpine Solutions procures energy and RA on behalf of direct access customers throughout 15 California. The objectives for its IRP are to: 16

• Analyze a conforming portfolio of generation resources assuming forecasted 2019 load levels 17 and the default system load shape as ordered by the Commission; 18

• Analyze an alternative, preferred portfolio of generation resources constructed assuming 2019 19 load levels and Calpine Solutions’ customers historical load shape; 20

• Estimate GHG emissions for the two portfolios using the Commission approved, clean net 21 short method; and 22

• Show the preferred portfolio meets all requirements of Public Utility Code Section 23 454.52(a)(1). 24

b. Methodology 25

i. Modeling Tool(s) 26

Calpine Solutions relied exclusively on Microsoft Excel software for all calculations in support 27 of its IRP. It created a spreadsheet model to create the resource portfolios and estimate non-28 GHG emissions. It then relied on the Commission’s GHG calculator spreadsheet tool to 29 estimate GHG emissions. It did not conduct any production cost modeling or portfolio 30 optimization studies. The internal spreadsheet model and GHG calculator results are attached to 31 this IRP. 32

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ii. Modeling Approach 1

Renewable Resources 2

Each portfolio includes the current contracts for RPS PCC 12 renewable resources Calpine 3 Solutions has procured to serve its retail customers. Almost all of these RPS contracts are 4 short-term, that is less than three years in duration. Thus, of all the years modeled (2018, 2022, 5 2026, and 2030) only 2018 reflects actual contracts. Future years reflect the same mix of 6 renewable resource technology types as procured for 2018. The level of RPS PCC 1 energy and 7 RECs in each portfolio is the minimum needed to satisfy RPS requirements and for year 2030, 8 the additional GHG emission target. Additional RPS PCC 2 and RPS PCC 3 RECs3 are added 9 as required to meet the applicable annual RPS percentage targets. 10

Additional Resources 11

Currently, Calpine Solutions procures unspecified system power to meet customer energy 12 demand above that met with RPS PCC 1 renewable resources. This is forecasted to continue 13 through year 2030 for both portfolios. Each portfolio also includes Calpine Solutions’ load ratio 14 share of new lithium ion battery capacity in the Commission’s reference system portfolio with 15 “some updating to reflect the latest IEPR assumptions.”4 Specifically, Calpine Solutions relied 16 upon the RESOLVE inputs and outputs from the 2017 IEPR Update model run.5 The load ratio 17 share is calculated as Calpine Solutions’ forecasted load divided by total CAISO system load. 18

As with all ESPs, Calpine Solutions is mandated by the Commission to contract for energy 19 storage capacity equivalent to one percent (1%) of its Year 2020 peak demand per the 20 Commission’s directive following passage of AB 2514.6 However, ESPs also receive a storage 21 procurement credit for a portion of energy storage procured by investor owned utilities (IOUs) 22 done for reliability purposes. As of the date of the 2018 IRP, Calpine Solutions estimates it 23 needs to directly contract for 2 MW of additional storage capacity due to these credits. The load 24 ratio share allocation of battery capacity adds more than 2 MW of battery capacity to the 25 Calpine Solutions’ portfolio by 2030, and thus should also meet this requirement, though the 26 actual timing of the contracts and resource installation may differ. 27

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2 Commission D.11-12-052. 3 Commission D.11-12-052. 4 Commission D.18-02-018, pg. 80. 5 The RESOLVE output summarized in D.18-02-018 differs from that in the updated run primarily because the updated load forecast is higher, thus increasing the amount of renewables added to the CAISO system, especially geothermal. 6 Commission D.13-10-040, pg. 2.

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GHG Emissions 1

Calpine Solutions relied upon the Commission-approved GHG calculator spreadsheet tool to 2 estimate GHG emissions from each portfolio using the clean net short method. Of all renewable 3 energy resource contracts, only RPS PCC 1 resources are considered GHG-free by the 4 Commission.7 The amount of capacity for each RPS PCC 1 resource type entered into the 5 “Capacity Inputs” section of the spreadsheet produces the energy generation included in a given 6 energy portfolio. It may differ from actual capacity of contracted resources if the assumed 7 capacity factor in the spreadsheet is different from the actual capacity factor of the resource. 8 The load ratio share of new lithium ion battery capacity from RESOLVE is also included. 9

Resource Adequacy 10

RA is procured separately from energy. Calpine Solutions’ procurement of 2018 RA is 11 complete and summarized here in Section 3 of the IRP. Very limited amounts of RA for future 12 years have also been procured at the time of the preparation of the 2018 IRP and these 13 quantities are reported in the baseline data template.8 Calpine Solutions has chosen not to 14 speculate as to what resources will provide RA beyond its existing RA contracts. Calpine 15 Solutions is committed to meeting all RA requirements as promulgated by the Commission, 16 including any future multi-year RA requirements. In addition, Calpine Solutions, and all ESPs, 17 also receive a RA allocation for a portion of RA procured by the IOUs done for reliability 18 purposes when the cost of the procurement is borne by all customers; this allocation of RA is 19 part of the Cost Allocation Method (CAM). 20

NOx and PM2.5 Emissions 21

Calpine Solutions estimated NOx and PM2.5 emissions from the gas generation in each 22 portfolio. See Table 4 in the following section for a list of the assumed emissions rates by 23 resource type. The amount of gas generation was estimated for each portfolio based on a load 24 ratio share of gas generation within the CAISO system mix9 as reported in the RESOLVE 25 model output. Since the total annual load is the same for both portfolios, the estimated NOx and 26 PM2.5 emissions are also the same. 27

iii. Assumptions 28

Load Forecast 29

Per direction by Commission Staff, and due to the 2017 IERP forecast producing non-30 substantive results, Calpine Solutions used the 2019 forecasted energy demand as provided in 31

7 Attachment A, OIR, R.16-02-007, May 25, 2018, pg. A-1. 8 Refer to Section 5a of the IRP for further details. 9 CAISO system mix refers to all resources contracted to meet CAISO demand. All gas resources contracted to meet CAISO demand are located within the CAISO footprint.

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amount of retail load shown in the table below is the level of load that will return the 2019 1 forecast of wholesale load ( ) once grossed up by system losses. 2

Table 2. Calpine Solutions load assumptions used for conforming portfolio. Numbers are in GWh. 3

2018 2022 2026 2030 Assigned Load Forecast for IRP (i.e., Managed Retail Sales Forecast)

Default Demand Inputs (based on sales-weighted share of total from IEPR) Baseline net energy for load (no BTM PV, EV, electrification, energy efficiency)

Electric Vehicle Load - Home Charging Only 34 87 141 181 Electric Vehicle Load - Home + Work Charging 2 14 40 77 Other Electrification 2 6 11 15 Energy Efficiency (48) (233) (447) (647) BTM PV (272) (445) (615) (772)

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GHG Emissions Benchmark 5

Calpine Solutions adopted the Commission-approved GHG emissions benchmarks for direct 6 access customers in each California IOU service territory. To translate these benchmarks into 7 an appropriate benchmark for Calpine Solutions specifically, we use a load ratio share 8 allocation, as directed by the Commission,12 and as shown in the table below. Load ratio share 9 is calculated separately for each service territory. Both portfolios have the same annual load 10 forecast and hence the same GHG emissions benchmark. 11

Table 3. Calculation of Calpine Solutions’ 2030 GHG emissions benchmark for both portfolios. 12

PG&E SCE SDG&E TOTAL Total Direct Access Load (GWh) 10,263 12,525 3,840 26,627

Calpine Solutions’ Load (GWh)

Load Ratio Share

Total Direct Access GHG Emissions Benchmark (MMT) 1.691 2.035 0.740

Calpine Solutions GHG Emissions Benchmark (MMT)

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The California Air Resources Board (CARB) recently published its GHG planning target 14 ranges for ESPs. Calpine Solutions’ target range is between and of CO2 15

12 Commission D.18-02-018, pg. 124.

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equivalent.13 This is above the target of calculated using the Commission 1 methodology as shown in Table 3. 2

NOx and PM2.5 Emissions Factors 3

The Commission’s proposed reference system portfolio post processing spreadsheet provides 4 NOx and PM2.5 emissions rates for each gas generation type modeled in RESOLVE. Calpine 5 Solutions uses these rates to estimate the emissions from its resource portfolios. They are 6 summarized in the table below. 7

Table 4. NOx and PM2.5 emissions rate assumptions. 8

NOx Emissions Rate (lb/MWh)

PM2.5 Emissions Rate (lb/MMBtu)

Combined Cycle Gas Turbine 0.07 0.0066 Gas Turbine Peaker 1 0.099 0.0066 Gas Turbine Peaker 2 0.279 0.0066 Steam Turbine 0.15 0.0075 Reciprocating Engine 0.5 0.01

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3. Study Results 10

a. Portfolio Results 11

Here we describe the results of the IRP analysis. Calpine Solutions has modeled two portfolios: 12

• Conforming Portfolio: Reflects 2019 forecasted demand and the system load shape as 13 embedded in the GHG calculator tool. 14

• Alternative/Preferred Portfolio: Reflects 2019 forecasted demand using a historical hourly 15 load shape for Calpine Solutions. 16

b. Preferred and Conforming Portfolios 17

Conforming Portfolio Results 18

The figure below shows the conforming portfolio by resource type on an energy basis. This includes 19 RPS PCC 1 wind and solar resources as well as customer behind-the-meter solar generation based on 20 default assumptions. All demand growth is almost entirely attributable to the rise in customer behind-21 the-meter solar, meaning that based on the default load shape, demand before consideration of 22

13 “Staff Report: Senate Bill 350 Integrated Resource Planning Electricity Sector Greenhouse Gas Planning Targets,” July 2018, Table 4, pg. 35.

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order to bring the GHG emissions under the Commission’s 2030 GHG benchmark. Calpine Solutions 1 will monitor its ability to meet state GHG goals and procure GHG-free energy as necessary. 2

Table 6. Calpine Solutions conforming/preferred portfolio GHG emissions. 3

Emissions Unit 2018 2022 2026 2030 Clean Net Short MMtCO2/yr. 1.4 1.2 1.2 0.8 Owned or contracted non-dispatchable GHG-emitting resources MMtCO2/yr. - - - - Emissions offset for NW hydroelectric imports MMtCO2/yr. (0.1) (0.1) (0.1) (0.1) Total MMtCO2/yr.

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Since the CARB GHG emissions benchmark range is higher than that calculated from the 5 Commission’s GHG targets for direct access demand, Calpine Solutions’ conforming portfolio will 6 be below the minimum GHG emissions range as set by CARB for Calpine Solutions. The GHG 7 emissions result of , predicted when no incremental RPS PCC 1 procurement is added to 8 the year 2030 conforming portfolio, falls within the CARB GHG emissions benchmark range for 9 Calpine Solutions. This result indicates that no additional incremental procurement of GHG-free 10 energy above the 2030 RPS percentage obligation is required in order to meet the CARB target. 11

Preferred Portfolio Results 12

The figure below shows the preferred portfolio by resource type on an energy basis. The alternative 13 portfolio differs from the conforming portfolio in two ways. First, no customer behind-the-meter solar 14 is separately forecasted. Therefore, the figure shows no customer solar generation. However, a 15 number of Calpine Solutions’ customers own solar, but Calpine Solutions does not collect usage data 16 on how much solar its customers generate. The of demand forecasted for 2019 is net of 17 customer behind-the-meter solar. The alternative portfolio demand forecast also assumes no growth in 18 customer behind-the-meter solar and how that would affect Calpine Solutions’ load shape, which was 19 developed from Calpine Solutions’ historical customer usage data. 20

Second, the amount of total RPS PCC 1 procurement in the alternative portfolio in year 2030 is less 21 than the conforming portfolio indicated needed to be procured. This disparate result in the need for 22 additional incremental GHG free energy between the two portfolios is entirely driven by the GHG 23 calculator’s load shape. In the preferred portfolio, Calpine Solutions used its historical load shape, 24 which is driven by the class of customer Calpine Solutions serves: commercial, industrial and 25 institutional customers. These classes of customers tend to have flatter demand shapes and their peak 26 demand is non-coincident to the CAISO peak demand. Thus, we conclude that Calpine Solutions 27 using its customer historical load shape is more favorable to achieving GHG emissions targets with 28 wind and solar energy resources than the conforming portfolio system load shape indicates. 29

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procurement beyond the minimum RPS percentage requirements (0.833 MMT) is also under the 1 CARB emissions target range. 2

Resource Adequacy Portfolio 3

Calpine Solutions’ current portfolio of RA by resource type is shown below. Specific resources 4 supplying the RA are listed in the baseline resource data template. The portion labeled unspecified 5 derives from firm Liquidated Damages energy imports that are not tied to any specific in-state 6 resource. Calpine Solutions has chosen not to speculate about what resources will be used to supply 7 future RA and thus has not prepared separate portfolios of future RA resources. 8

Figure 5. Calpine Solutions’ 2018 RA portfolio by resource type. 9

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i. Local Air Pollutant Minimization 12

Calpine Solutions exclusively serves nonresidential commercial, industrial and institutional 13 customers in all three IOU service territories, excluding a small number of incidental 14 residential accounts that are financially associated with a large commercial or institutional 15 customer, such as university dormitories. Calpine Solutions compared the zip codes 16 associated with the disadvantaged communities as defined in Commission D. 18-02-018 to 17 the service accounts that Calpine Solutions currently serves. Calpine Solutions does not 18 track service account by census tract. Comparing by zip code may overstate the number of 19

RA (M

W)

Hydro

CHP

SCE Preferred Resource Local CapacityRequirement CreditLandfill Gas

Muncipal Solid Waste

Reliability Must Run Allocation

Geothermal

Cost Allocation Mechanism Amounts

Gas

Unspecified

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service accounts in disadvantaged communities because there isn’t a one-to-one 1 relationship between the census tract boundary and the zip code boundary with the zip code 2 boundary being a larger area. Calpine Solutions serves approximately 8,000 service 3 accounts out of approximately 17,000 total service accounts between the three IOU service 4 territories in disadvantaged communities. Intuitively this makes sense; the industrial 5 sections of California tend to have higher local pollution than exclusively residential 6 neighborhoods and since Calpine Solutions only serves nonresidential commercial, 7 industrial and institutional customers, these business customers are more likely to be 8 located in industrial sections of California. 9 The table below summarizes expected NOx and PM2.5 emissions from gas-fired generation 10 within each portfolio. Calpine Solutions does not directly contract with any fossil-fired 11 generation to meet its energy needs, and has no plans to in the future. All gas generation in 12 each portfolio is from CAISO system power. The emissions are estimated based on a load 13 ratio share allocation of system gas generation. Since the total load for each portfolio is the 14 same, the emissions estimates are the same. The different load profile for the different 15 portfolios could impact these emissions as it does GHG emissions, but Calpine Solutions 16 has not attempted to estimate the impact. 17 As the tables show, emissions intensity falls between 2018 and 2022 and then increases in 18 2026, largely due the retirement of Diablo Canyon nuclear plant in 2025. It then levels off 19 in years thereafter. 20

Table 8. Calpine Solutions estimated NOx and PM2.5 emissions for both portfolios. 21

NOx PM2.5

2018 2022 2026 2030 2018 2022 2026 2030 Total Emissions (tons) 45.6 35.2 49.9 51.7 30.2 23.0 32.6 33.7 Total Generation (GWh)15 Effective Emissions Rate (t/GWh) 0.010 0.008 0.011 0.011 0.007 0.005 0.007 0.007

22 Calpine Solutions has no specific information on how these emissions impact 23 disadvantaged communities. Because the gas generation represents a slice of the entire 24 CAISO system, these emissions should be spread over all gas generation in the system. 25 Although Calpine Solutions has no plans to contract for energy from specific gas 26 generation in the future, if for some reason there is a need to procure energy from these 27 types of non-renewable generation resources, Calpine Solutions will consider the impact to 28 disadvantaged communities in its decision process. 29

ii. Cost and Rate Analysis 30

As an ESP, Calpine Solutions operates in a competitive market with customers free to 31 choose among a host of ESPs and these customers demand the products and services that 32

15 Excludes customer solar and includes battery losses from new lithium batteries.

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best meet their needs. Thus, maintaining competitive pricing is critical to maintaining 1 satisfied customers. Calpine Solutions notes that the Commission has a more limited scope 2 of oversight over ESPs. ESPs are not regulated as “public utilities;” the Commission does 3 not regulate retail transactions by ESPs or establish rates for ESP products or services, nor 4 does the Commission directly oversee the procurement activities of ESPs undertaken in 5 order to serve an ESP’s retail transactions which includes cost quantification information. 6 However, in order to be responsive to the Commission and the IRP process, costs for energy, 7 RPS and RA procurement to meet Calpine Solutions’ retail sales in California have been 8 approximately per year. 9

c. Deviations from Current Resource Plans 10

Not Applicable. Calpine Solutions has not filed any other resource plans. 11

d. Local Needs Analysis 12

Calpine Solutions procures local RA to meet its share of local RA requirement in the IOU territories it 13 serves. Current RA procurement by resource type is summarized in Figure 5. Calpine Solutions has 14 not prepared a specific portfolio of future RA resources. Calpine Solutions is committed to meeting 15 all future RA requirements, including local RA requirements. 16

4. Action Plan 17

a. Proposed Activities 18

Calpine Solutions constantly reviews its market positions to optimize its portfolio of all electricity 19 products. Calpine Solutions is evaluating the most appropriate commercial means of responding to 20 the prescriptive requirement of the IRP which will include significant changes to the required 21 quantities of long-term contracting. 22

With the passage of Senate Bill 350 (DeLeon) in 2015, starting in the year 2021, Calpine Solutions is 23 required to have at least 65% of its RPS procurement obtained from contracts of ten years or greater 24 duration. Calpine Solutions plans to meet this RPS requirement and is in commercial negotiations 25 with a number of renewable generation developers and marketers. In Calpine Solutions’ next IRP, to 26 be filed with the Commission in 2020, Calpine Solutions expects to report a significant increase in 27 both procurement quantity and length of term of its renewables portfolio. 28

No significant change in RPS and RA procurement activity is expected in the near term under each 29 portfolio, however Calpine Solutions will continue to analyze its customer load shape when 30 considering the technology mix of resources that is most economic to serve its customers’ power 31 needs and achieve GHG emission reduction targets. 32

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b. Barrier Analysis 1

Calpine Solutions does not anticipate any significant barriers to procuring resources in line with the 2 preferred portfolio. Given the current competitive cost of new renewable energy development, 3 Calpine Solutions does not foresee the need for significant cost increases for its customers to meet the 4 2030 GHG emissions targets, despite the need to procure additional GHG-free energy above the RPS 5 percentage requirements. Calpine Solutions will also closely monitor the cost of renewable 6 technologies compared to reliance on system power. Should procuring additional renewable energy 7 beyond RPS targets become more economic than relying on system power, it plans to pursue 8 additional renewable energy procurement. It will also monitor developing technologies, especially 9 battery storage, designed to further grid integration of intermittent renewable energy and procure such 10 new resources as it becomes cost-effective for RA purposes. 11

Upon reflection of the results of the two portfolios, the conforming portfolio, though feasible, is not 12 selecting the optimal mix of GHG-free renewable resources. California has added a significant 13 amount of customer behind-the-meter solar generation to date; adding more solar generation provides 14 a diminishing GHG emission reduction return. It appears that a more diversified renewable generation 15 technology mix that addresses the conforming portfolio’s load shape and/or additional battery storage 16 will likely be more effective in meeting GHG emission reduction targets if Calpine Solutions’ 17 demand ultimately reflects the projected system shape as found in the conforming portfolio, rather 18 than its current load shape as modeled in the preferred portfolio. Calpine Solutions will continue to 19 monitor its customer load shape over time and will consider diversifying renewable energy purchases 20 away from solar generation to other renewable energy technologies in order to better meet GHG 21 targets if its load shape changes. 22

c. Proposed Commission Direction 23

Calpine Solutions has no requests from the Commission at this time. 24

5. Data 25

Calpine Solutions has completed the required resource templates for its conforming portfolio. These are 26 attached to this IRP. 27

a. Baseline Resource Data Template 28

The baseline resource data templates are attached as 29 “CONFIDENTIALData_CalpineSolutions_BaseRsrc_Conforming_20180801.xlsx” and 30 “CONFIDENTIALData_CalpineSolutions_BaseRsrc_Preferred_20180801.xlsx.” Both files include 31 all existing contracts, by resource type, by month. This includes RA and energy contracts. For 32 contracts that do not specify a monthly energy output, the output is prorated by the number of days in 33 the particular month based on an annual quantity. 34

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It also includes generic information for expected future contracts with existing wind and solar 1 resources as well as for system power. Generic data is also reported by resource type, by month. 2

b. New Resource Data Template 3

The new resource data template for both conforming and preferred are the same and is attached as 4 “CONFIDENTIALData_ CalpineSolutions _NewRsrc_All_20180801.xlsx” The only new resources 5 reflected are the new battery resources shown in Table 5. 6

c. Other Data Reporting Guidelines 7

The workbooks Calpine Solutions created to create each portfolio and estimate non-GHG emissions 8 are attached as “CONFIDENTIALSupporting_ CalpineSolutions _Conforming_20180801.xlsx” and 9 “CONFIDENTIALSupporting_ CalpineSolutions _Preferred_20180801.xlsx.” GHG calculator 10 spreadsheets for each portfolio are also attached as “CONFIDENTIAL GHG Calculator for IRP 11 v1.4.5 Conforming Portfolio.xlsx” and “CONFIDENTIAL GHG Calculator for IRP v1.4.5 Preferred 12 Portfolio.xlsx” 13

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6. Lessons Learned 15

Calpine Solutions, along with most ESPs, have a significantly different customer demand shape than the 16 system load shape as offered in the conforming portfolio. Calpine Solutions surmises the conforming 17 portfolio customer load shape is driven by residential energy consumption patterns. Therefore, when 18 doing GHG emissions accounting with the system load shape, the results mischaracterize the important 19 differences between the load serving entities that serve nonresidential exclusively and the load serving 20 entities that also include a residential load shape in their customer mix. These differences will be further 21 exacerbated as California continues its solar expansion. Since load shape is a significant input to the 22 conforming portfolio, the Commission should consider recognizing that ESPs that serve nonresidential 23 customers should have the option in the conforming portfolio of a load shape that more accurately reflects 24 the nonresidential customers that they serve. 25

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APPENDIX A

Confidential Worksheets Baseline resource data templates:

CONFIDENTIALData_CalpineSolutions_BaseRsrc_Conforming_20180801.xlsx CONFIDENTIALData_CalpineSolutions_BaseRsrc_Preferred_20180801.xlsx

New resource data template for both conforming and preferred:

CONFIDENTIALData_ CalpineSolutions _NewRsrc_All_20180801.xlsx

Other data templates:

CONFIDENTIALSupporting_ CalpineSolutions _Conforming_20180801.xlsx CONFIDENTIALSupporting_ CalpineSolutions _Preferred_20180801.xlsx. CONFIDENTIAL GHG Calculator for IRP v1.4.5 Conforming Portfolio.xlsx

CONFIDENTIAL GHG Calculator for IRP v1.4.5 Preferred Portfolio.xlsx