AB 1408 directs the California Public Utilities Commission to adopt a recurring integrated resource planning (IRP) process that aligns each load‑serving entity’s portfolio with state greenhouse gas goals and a policy target of 60% eligible renewable energy by 2030. The bill also requires the commission to conduct probabilistic reliability modeling, aggregate short‑ and midterm procurement data for use by the Independent System Operator, and enforce procurement outcomes on a nondiscriminatory basis.
Critically, AB 1408 creates a conditional backstop: if the commission finds a statewide shortfall, it can ask the Department of Water Resources (DWR) to run competitive solicitations and contract for eligible energy resources under specified criteria. The measure also removes certain near‑term nuclear attributes from IRP portfolios and sets eligibility rules for what DWR may procure—design choices that reshape near‑term reliability planning and which resource types may be centrally procured by the state.
At a Glance
What It Does
Requires recurring integrated resource plans from all load‑serving entities tied to state GHG targets and a 60% eligible renewable energy objective by 2030, mandates probabilistic short/mid/long‑term reliability modeling, and lets the commission request DWR to centrally procure specified eligible resources if it finds a need.
Who It Affects
Investor‑owned utilities, community choice aggregators, large electric cooperatives (above the specified 700 GWh threshold), the California Independent System Operator (CAISO), renewable and storage developers, and the Department of Water Resources if asked to procure resources.
Why It Matters
The bill formalizes a recurring IRP process with enforceable procurement outcomes, creates a mechanism for state‑level central procurement of long‑lead clean resources, and embeds probabilistic modeling and data aggregation into planning—each of which changes how reliability and resource adequacy are assessed and who coordinates large, multi‑year resource builds.
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What This Bill Actually Does
AB 1408 makes integrated resource planning a recurring, commission‑directed exercise for every load‑serving entity in California. Each entity must file an IRP on the commission’s schedule demonstrating how it will meet the state’s electricity sector share of economywide greenhouse gas reduction goals and the policy objective to source at least 60% eligible renewable energy by 2030.
Plans must balance reliability, affordability, and other goals such as resilience and reduced local pollution, with special attention to disadvantaged communities.
The bill tightens the planning toolbox: the commission must run probabilistic reliability modeling across short, mid, and long terms, aggregate short‑ and midterm procurement data from all load‑serving entities, and provide anonymized aggregated reports to CAISO so grid operators have better forward visibility. The process explicitly requires entities to evaluate and consider surplus interconnection service options—opening the door to secondary uses of interconnection capacity inside IRPs—and allows the commission to order procurement of resources with specific attributes and penalize noncompliance.If IRPs show a statewide need, the commission must identify which eligible resources should be procured and may request that DWR exercise its central procurement role.
DWR, if asked, may run competitive solicitations and sign contracts for eligible resources before January 1, 2035; those contracts, once approved, remain in force for their duration. The bill narrowly defines which resources DWR may procure (non‑combustion, non‑fossil, supporting state goals, shown to be undercontracted, and typically with at least five years’ lead time) and provides a narrow exception for pump‑hydro under specified size and prior state funding conditions.Separately, the bill removes the ability to count energy, capacity, or attributes from Diablo Canyon beyond specified post‑shutdown dates in IRP portfolios and requires retirement and separate reporting of attributes from thermal nuclear plants not built in the 21st century by January 1, 2031.
The commission must avoid duplicating internal planning processes, allocate any additional procurement costs equitably across customers, and apply the statute to large cooperatives above a statutory demand threshold.
The Five Things You Need to Know
The bill sets an explicit policy objective that load‑serving entities procure at least 60% eligible renewable energy resources by December 31, 2030.
The commission must perform probabilistic reliability modeling (short, mid, long term) and annually aggregate short‑ and midterm procurement data from all load‑serving entities, providing anonymized reports to CAISO to inform grid planning.
If the commission finds a statewide procurement need, it has six months to request DWR to exercise central procurement; DWR may conduct solicitations and enter into contracts for eligible resources before January 1, 2035, and approved contracts remain effective for their duration.
AB 1408 disallows counting energy, capacity, or attributes from Diablo Canyon Unit 1 beyond November 1, 2024 and Unit 2 beyond August 26, 2025 in adopted IRP portfolios, and requires retirement of attributes from older thermal nuclear plants on January 1, 2031.
Only new resources that are non‑combustion, non‑fossil, directly support state goals, appear undercontracted in recent IRPs, and have at least a five‑year construction lead time are eligible for DWR procurement; pump hydro is eligible only if ≤500 MW and directly appropriated state funding before January 1, 2023.
Section-by-Section Breakdown
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IRP objectives and statewide portfolio goals
This subsection sets the IRP goals the commission must enforce: alignment with State Air Resources Board GHG targets, a 60% eligible renewable energy policy goal by 2030, reliability across time horizons, minimizing ratepayer bill impacts, resilience, distribution‑side enhancements, and localized pollutant reductions with priority for disadvantaged communities. Practically, the commission must ensure IRPs do not just chase renewables but incorporate multiple objectives that can be traded off against cost and reliability.
Probabilistic reliability modeling and data aggregation
The commission must assess short, mid, and long‑term reliability using probabilistic modeling and review results in public proceedings at the same cadence as the IRP forecasts. It must also aggregate reported short‑ and midterm procurement across load‑serving entities and provide anonymized summaries to CAISO. This creates a formal feedback loop between procurement plans and operational grid planning, but it relies on modeling inputs and anonymization standards that the bill leaves to implementation.
Commission triggers and DWR central procurement process
On a schedule set by the commission, the agency must determine whether IRPs collectively show a need for additional eligible resources. If so, the commission specifies which resources should be procured and may, within six months, request DWR to exercise its central procurement authority. DWR may then run competitive solicitations and sign contracts (subject to Water Code approvals) before January 1, 2035; such contracts remain binding for their full terms. The statutory language constrains DWR to procure only resources that meet narrow eligibility criteria.
IRP filing rules, surplus interconnection, and LSE‑specific requirements
Each load‑serving entity must file an IRP consistent with the commission’s schedule; electrical corporations must follow Section 454.5 and specifically evaluate and consider surplus interconnection service options. Community choice aggregators must get governing board approval and submit plans for commission certification; electric service providers must demonstrate diversified portfolios that meet reliability and other statutory goals. Requiring surplus interconnection consideration seeks to surface unused interconnection rights as a system resource.
Cost allocation, nondiscrimination, and enforcement
If additional procurement is authorized, the commission must allocate costs fairly across customers without cost‑shifting among load‑serving entity customers, while allowing CCAs to self‑provide renewable integration resources consistent with existing rules. The commission may order procurement of resources with specified attributes and may assess penalties for noncompliance—giving the IRP process real teeth but also creating enforcement and cost‑allocation choices that will matter in implementation.
Diablo Canyon exclusion, nuclear attribute retirement, and DWR procurement eligibility
The bill forbids counting Diablo Canyon’s energy, capacity, or attributes in adopted IRP portfolios beyond the two specified post‑shutdown dates and requires that older thermal nuclear plants’ attributes be retired and separately reported as of January 1, 2031. DWR may only procure new resources that do not increase fossil‑fuel dependency, are undercontracted in IRPs, have at least five years’ lead time, do not burn fossil fuels, and generally avoid combustion except for geothermal ancillary uses. Pump‑hydro is allowed only if it’s ≤500 MW and received direct state appropriation before January 1, 2023.
Applicability to electrical cooperatives
The statute extends to electrical cooperatives only if they have an annual demand exceeding 700 gigawatt‑hours based on a three‑year average starting January 1, 2013. That threshold limits the universe of cooperatives subject to the IRP requirements to the very largest providers, excluding smaller coops from the statutory IRP regime.
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Explore Energy in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Disadvantaged communities — The bill prioritizes minimizing localized air pollutants and greenhouse gas emissions with early priority on disadvantaged communities, which could speed cleaner local resource deployments and lower local pollutant burdens.
- Renewable and long‑lead developers (e.g., wind, geothermal, large pumped hydro) — DWR’s conditional central procurement and the statute’s preference for resources with multi‑year lead times create a clearer customer for large, capital‑intensive projects that otherwise struggle in short‑term solicitations.
- CAISO and system planners — Aggregated, anonymized short/midterm procurement reporting and probabilistic modeling give system operators better forward visibility to plan transmission, operations, and reliability actions.
- Community choice aggregators (CCAs) — The statute preserves CCAs’ ability to self‑provide renewable integration resources and requires their IRPs to be certified, reinforcing CCAs’ planning role while integrating them into statewide visibility.
- Ratepayer protection advocates — The statute expressly directs the commission to minimize ratepayer bill impacts and to allocate procurement costs equitably, providing a statutory hook for cost oversight.
Who Bears the Cost
- Investor‑owned utilities and load‑serving entities — They must prepare IRPs to new specifications, evaluate surplus interconnection options, meet additional procurement orders, and potentially face penalties for noncompliance, all of which increase planning and procurement costs.
- Department of Water Resources — If requested to procure, DWR bears solicitation, contracting, and market risk, plus administrative responsibilities tied to vetting eligibility and meeting Water Code approval requirements.
- Operators and owners of Diablo Canyon and older nuclear plants — The statute prevents counting their attributes after specified dates and mandates retirement reporting, reducing the market value of those assets for IRP purposes.
- Quick‑build resource developers (e.g., batteries, short‑lead projects) — DWR procurement is limited to resources with at least a five‑year lead time, so short‑lead technologies may be deprioritized for central procurement and must compete in other procurement venues.
- Large electrical cooperatives (above 700 GWh) — They must comply with IRP filing and related requirements, which can be administratively burdensome and may require policy and procurement changes.
Key Issues
The Core Tension
The central dilemma is between centralizing long‑lead procurement to secure deep decarbonization projects (and reduce developer risk) versus preserving market signals and flexible, quicker procurement paths that can meet short‑term reliability needs at lower near‑term cost—one approach advances multi‑decade clean infrastructure but risks shortfalls and higher near‑term costs; the other preserves agility but may fail to deliver the large, durable projects the statute prioritizes.
AB 1408 marries long‑range decarbonization goals with a formalized reliability assessment and a conditional state procurement backstop, but that combination raises implementation questions. The DWR procurement path is tightly circumscribed—only non‑combustion, non‑fossil resources with five‑year lead times and shown to be undercontracted in IRPs qualify—favoring capital‑intensive resources with long development cycles.
That design can expedite big builds (like geothermal or large pumped hydro) but sidelines fast, modular resources (batteries, distributed solar+storage) that are often critical for near‑term resource adequacy and capacity needs.
The bill’s reliability commitments depend heavily on probabilistic modeling and aggregated, anonymized procurement reports to CAISO. Modeling outcomes are sensitive to assumptions about load growth, electrification rates, climate impacts, and the locational value of resources.
Anonymized aggregates help CAISO see volumes but may obscure locational or contractual details needed for transmission planning and congestion management. Finally, the prohibition on counting Diablo Canyon attributes after specific dates and the mandated retirement of older nuclear attributes create potential near‑term capacity gaps; the statute relies on the IRP and DWR mechanisms to close those gaps, but timing mismatches between retirements and the five‑year lead time for DWR‑eligible projects could create procurement and reliability pressure.
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