Resource Adequacy Fact Sheet

Resource adequacy is related to system dispatch. It’s a requirement that the California Independent System Operator (CAISO) stipulates on all its participants (PWP is one). Resource adequacy ensures adequate power capacity and reserves are held in order for CAISO to balance supply and demand across California’s electric grid. PWP has to maintain an installed capacity that is 17.5% greater than city-wide demand, in order to satisfy CAISO’s reserve margin.

Imported power is more expensive.

When PWP’s power label lists ‘unspecified’ as one of its power sources, it means PWP has imported that power from CAISO; it did not contract (or generate) the power under its own authority. Imported CAISO energy is purchased from the ‘spot-market’ (a daily energy bazaar) and is often more expensive than the energy that PWP has under contract or generates itself. The advantage of spot-market purchases to PWP is that it minimizes the cost of building new assets. Similarly, if PWP’s Glenarm Power Plant is needed for grid stabilization, CAISO will call upon PWP to export power to the California grid from that facility.

Will resource adequacy change with clean energy?

As renewable energy gains a larger share of PWP’s portfolio, CAISO may demand a larger resource adequacy fraction from PWP due to the variable nature of renewable resources. Perhaps that can be compensated for with battery storage.