The California Independent System Operator (CAISO), California Public Utilities Commission (CPUC), and California Energy Commission (CEC) issued a Preliminary Root Cause Analysis of the August 2020 heat wave and rotating outages in California, finding that resource planning targets have not evolved to keep pace with extreme weather events, and that energy market practices did not perform as intended during stressed conditions.

The analysis also outlines short-term and longer-term actions to mitigate electricity shortages and ensure delivery of clean, reliable, and affordable energy.

Following two rotating outages on August 14 and 15 during a heat wave impacting the Western US, Governor Gavin Newsom sent a letter to the CAISO, CPUC, and CEC requesting immediate actions to minimize the rotating outages as the heat wave continued, and a review of existing forecasting methods and resource adequacy requirements.

On 19 August 2020, the three entities submitted a joint response detailing the immediate actions that were taken to mitigate the forecasted supply shortfall and providing a commitment to develop an after-action report. The Preliminary Root Cause Analysis released today serves as an intermediate milestone in completing a thorough root cause analysis.

The Preliminary Root Cause Analysis finds that there was no single root cause for the rotating outages on August 14 and 15. Instead, there are three broad categories of factors that contributed to the outages:

1. The extreme heat wave across the western US resulted in the demand for electricity exceeding the existing electricity resource planning targets. The existing resource planning processes are not designed to fully address a heat wave like the one experienced in mid-August.

2. In transitioning to a reliable, clean and affordable resource mix, resource planning targets have not kept pace to lead to sufficient resources that can be relied upon to meet demand in the early evening hours. This makes balancing demand and supply more challenging. These challenges were amplified by the heat.

3. Some practices in the day-ahead energy market exacerbated the supply challenges under highly stressed conditions.

The Preliminary Root Cause Analysis report identifies immediate measures to ensure reliable supplies for 2021 and beyond, including:

1. Update the resource and reliability planning targets to better account for heat waves and other extreme events like the ones encountered in both August and September; and a transitioning electricity resource mix to meet the clean energy goals of the state during critical hours of grid need.

2. Ensure that the generation and storage projects that are currently under construction in California are completed by their targeted online dates.

3. Expedite the regulatory and procurement processes to develop additional resources that can be online by 2021. This will most likely focus on resources such as demand response and flexibility. This can complement the resources that are already under construction.

4. Coordinate additional procurement by non-CPUC jurisdictional entities.

5. Enhance CAISO market practices to ensure they accurately reflect the actual balance of supply and demand during stressed operating conditions.

The CAISO is responsible for managing the flow of electricity that serves 80% of California and a small portion of Nevada. The CAISO also runs a real-time energy market for utilities in eight western states and conducts reliability coordinator services to most balancing authorities in the West.

The CPUC regulates services and utilities, protects consumers, safeguards the environment, and assures Californians’ access to safe and reliable utility infrastructure and services.