SAN FRANCISCO--(BUSINESS WIRE)--

Pacific Gas and Electric Company (PG&E) won approval Thursday from the California Independent System Operator (CAISO) to provide a clean alternative to a decades-old fossil-fuel power plant in Oakland.

PG&E’s Oakland Clean Energy Initiative (OCEI) will provide a green and innovative option that uses local clean-energy resources, including energy storage, energy efficiency and electric-system upgrades, to ensure transmission grid reliability in Oakland when the current power plant at 50 Martin Luther King Jr. Way is retired.

PG&E will open a two-month request-for-offers process this spring to invite providers of distributed energy resources to propose innovative and competitive solutions for the portfolio.

Roy Kuga, vice president of Grid Integration and Innovation for PG&E, thanked the system operator’s staff for its hard work reviewing PG&E’s proposal.

“The Oakland Clean Energy Initiative represents an innovative, tailored portfolio of distributed clean energy resources combined with traditional transmission substation upgrades that meet the local reliability needs in this area of Oakland, enabling the retirement of the aging, jet fuel-powered plant,” Kuga said.

The system operator has a Reliability Must Run contract with the existing plant’s owner, Dynegy, to purchase power during peak periods. In spring 2017, the system operator identified the 40-year-old plant’s eventual retirement as a risk to local transmission reliability, and said it would consider alternatives including new transmission lines through heavily populated areas of Oakland, a new fossil-fuel plant or a portfolio of local clean resources.

PG&E and the system operator worked collaboratively over the last several transmission-planning cycles to study how distributed clean energy resources could become part of the solution, Kuga said.

The system operator determined in its transmission plan that the OCEI would be a clean and affordable option to new transmission or a new fossil-fuel facility.

With the system operator’s decision, PG&E will move forward to upgrade existing substations and develop new clean-energy resources in Oakland to provide an alternative to the generating facility.

The OCEI would mark the first time that local clean-energy resources are proactively deployed as an alternative to fossil-fuel generation for transmission reliability in PG&E’s service area.

PG&E will continue to collaborate with community choice aggregator East Bay Community Energy to determine and meet the clean-energy and reliability needs of local customers.

Depending on the exact resource mix, the market solicitation is expected to result in 20 to 45 megawatts of clean energy resources.

PG&E invited multiple stakeholders to weigh in on the proposal, including the city of Oakland; the International Brotherhood of Electric Workers Local 1245; the Port of Oakland; environmental groups such as the Environmental Defense Fund, the West Oakland Environmental Indicators Project and the Natural Resources Defense Council; and businesses that neighbor the site.

“There has been widespread support for this solution from local community representatives, environmentalists, elected officials and other groups, with a focus on using local workforce,” Kuga said.

Anthony Brown, assistant business manager of IBEW 1245, said his organization is pleased with the proposal.

“The working men and women of IBEW Local 1245 are proud partners with PG&E in providing safe, affordable energy to the city of Oakland, and all of Northern California. We are excited to see the energy reliability solutions of the future, developed in the communities where we work and live,” Brown said.

PG&E will seek cost recovery for the battery storage with the Federal Energy Regulatory Commission, and for other distributed energy resources with the California Public Utilities Commission. PG&E expects to make its filing with the state commission by the end of 2018. The Oakland Clean Energy Initiative has a forecasted in-service date of mid-2022.

About PG&E

Pacific Gas and Electric Company, a subsidiary of PG&E Corporation (NYSE:PCG), is one of the largest combined natural gas and electric utilities in the United States. Based in San Francisco, with more than 20,000 employees, the company delivers some of the nation’s cleanest energy to nearly 16 million people in Northern and Central California. For more information, visit www.pge.com/ and www.pge.com/en/about/newsroom/index.page.

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