{"document":{"slug":"report-el26-71-caiso","title":"CAISO reports on resource adequacy and large-load proposals","issued":"2026-07-20","accession":"20260720-5202","docket":"EL26-71-000","group":"CAISO filings","filer":"California Independent System Operator Corporation","kind":"informational report","file":"sources/originals/20260720-5202_01.pdf","url":"https://elibrary.ferc.gov/eLibrary/filelist?accession_Number=20260720-5202","sha256":"5b84365a6842ca80acdb8b17bd392f0f3155d2212fda3ed535872f1c97912edc","pages":19,"tokens":6245,"emptyPages":[]},"pages":[{"page":1,"startToken":0,"endToken":262,"text":"July 20, 2026 \n \n \n \nThe Honorable Debbie-Anne A. Reese \nSecretary  \nFederal Energy Regulatory Commission \n888 First Street, NE \nWashington, DC 20426 \n \n \nRe: \nCalifornia Independent System Operator Corporation \n \n \nDocket No. EL26-71-000 \n \nInformational Report \n \nDear Secretary Reese: \n \nThe California Independent System Operator Corporation (CAISO) submits this \ninformational report in compliance with the Commission’s June 18, 2026 Order to Show \nCause.1 \nAs home to Silicon Valley and 33 of the 50 top artificial intelligence companies, \nCalifornia is leading the nation in preparing its electric grid for the next generation of \neconomic growth driven by data centers and other large electric loads.2 Through \ncoordinated resource planning, long-term procurement of clean and reliable generation, \nand an unprecedented expansion of the transmission system, the CAISO and its \nParticipating Transmission Owners are working to ensure that new demand can be \nserved without compromising reliability or affordability. This work entails close, careful \ncoordination with California’s principal energy agencies, the California Public Utilities \nCommission (CPUC) and the California Energy Commission (CEC), and local \nregulators. California's approach recognizes that generation and transmission are \ncomplementary investments: securing adequate generating resources is only valuable if \nthose resources can be delivered where and when they are needed. By planning both in \ntandem over longer time horizons, California’s framework supports continued \ninvestment in innovation, electrification, and advanced computing infrastructure while \n \n1  \nCalifornia Independent System Operator Corp., et al., 195 FERC ¶ 61,214 at PP 120-122 (2026) \n(Order to Show Cause). \n2  \nCalifornia Executive Order N-5-26 at https://www.gov.ca.gov/wp-content/uploads/2026/03/3.30-\nFINAL-Trusted-AI-Procurement-EO-N-5-26_ATTESTED.pdf. \nCalifornia Independent System Operator Corporation"},{"page":2,"startToken":262,"endToken":650,"text":"The Honorable Debbie-Anne A. Reese \nJuly 20, 2026 \nPage 2 \n \n \n \n \n \n \nmaintaining a reliable, resilient, and increasingly carbon-free electric grid for all \ncustomers. \nThe CAISO shares the Commission’s recognition that the CAISO must continue \nits work to ensure that the electric system can accommodate rapidly growing demand \nfrom data centers and other large loads. This will require continued attention to resource \nadequacy, generation development, transmission expansion, and both load and \ngenerator interconnection processes. The CAISO and its Participating Transmission \nOwners support this effort and are committed to working with the Commission, \nCalifornia regulators, neighboring balancing authorities, utilities, developers, and other \nstakeholders to identify and remove potential barriers that could delay the deployment \nof large loads and new resources. Meeting the demands of the digital economy will \nrequire sustained collaboration to ensure that sufficient generation is developed, \ntransmission infrastructure keeps pace, and new large loads can interconnect to the grid \nin a timely, reliable, and cost-effective manner. \nI. \nEnsuring Generation Adequacy in California \nA. \nOverview \nAs the Commission recognizes in the Order to Show Cause,3 California's \nintegrated resource and transmission planning framework is fundamentally different \nfrom many other organized markets that are confronting capacity shortfalls associated \nwith unprecedented data center growth, electrification, and other emerging load growth. \nFor several years, California’s statewide planning processes have incorporated \nexpected increases in electricity demand and have proactively identified the resources \nand infrastructure necessary to maintain reliability.  \nUnder California’s integrated planning framework, the CEC develops long-term \ndemand forecasts, the CPUC identifies system needs and directs resource \nprocurement, and the CAISO plans the transmission system and administers the \ninterconnection process to deliver those resources. The CPUC has primary \nresponsibility for regulatory oversight of resource adequacy procurement within the \nCAISO and plays the principal role in ensuring load-serving entities procure sufficient \nresources to meet reliability needs.4 The CAISO coordinates closely with the CPUC on \nthe resource adequacy program.  \nCalifornia's planning assumptions already reflect substantial anticipated demand \ngrowth from transportation electrification, building electrification, industrial development, \nand emerging large-load customers, including data centers. These assumptions are \n \n3  \nOrder to Show Cause at PP 21 et seq. \n4  \nSee Meeting the Challenge of Resource Adequacy, Docket No. AD25-7-000, Statement of Molly \nSterkel, CPUC, (May 28, 2025) https://www.ferc.gov/media/meredith-sterkel-california-public-utilities-\ncommission-director-electric-supply-planning-and, Statement of Neil Millar, CAISO (May 28, 2025) \nhttps://www.ferc.gov/media/neil-millar-caiso-vice-president-infrastructure-and-operations-planning."},{"page":3,"startToken":650,"endToken":1042,"text":"The Honorable Debbie-Anne A. Reese \nJuly 20, 2026 \nPage 3 \n \n \n \n \n \n \nincorporated into the CEC's demand forecasts and inform the CPUC's Integrated \nResource Planning process and procurement requirements. This coordinated approach \nhas enabled procurement and infrastructure development that is specifically designed to \ntimely meet anticipated load growth.  \nThis coordinated process has enabled the addition of nearly 36,000 MW of new \ngenerating capacity to the grid since 2020, as well as unprecedented amounts of battery \nenergy storage, helping to strengthen system reliability during periods of high demand \nand changing grid conditions.  \nB. \nRoles and Responsibilities: Integrated Planning, Procurement, and \nInfrastructure Development \nAs described above, the CAISO works in close coordination with the CPUC, the \nCEC, state agencies, and local regulatory authorities through an established planning \nframework designed to align electricity demand forecasting, resource planning and \nprocurement, transmission planning, generator interconnection activities, and resource \nadequacy. This coordination is guided principally through a 2022 Memorandum of \nUnderstanding (MOU) among the CPUC, CEC, and CAISO.5 \nThe CEC, CPUC, and CAISO regularly exchange planning data and \nassessments to ensure that forecasted demand growth, resource development needs, \ntransmission requirements, and reliability considerations are reflected consistently \nthroughout California's planning processes for the CAISO’s balancing authority area. \n1. \nCEC: Long-Term Demand Forecasting \nThe CEC serves as the state's lead forecasting agency and develops the state’s \nofficial long-term electricity demand forecast through its Integrated Energy Policy Report \n(IEPR) process. The forecast evaluates expected load growth over ten-year and long-\nterm planning horizons, and incorporates factors such as data centers, transportation \nelectrification, building electrification, industrial and agricultural development, economic \ntrends, climate impacts, and California's greenhouse-gas reduction policies. The \ndemand forecast serves as the common planning foundation for California’s resource \nand transmission planning processes. The CPUC relies on the forecast to determine \nresource planning and procurement needs, while the CAISO uses it for transmission \nplanning activities.  \nThe forecast is updated annually to reflect the latest data, planning assumptions, \nand forecast methodologies. The CEC produces a baseline forecast and set of \nscenarios including high, mid, and low variations. As part of each forecasting cycle, the \n \n5  \nMemorandum of Understanding Between the California Public Utilities Commission and the \nCalifornia Energy Commission and the California Independent System Operator Regarding Transmission \nand Resource Planning and Implementation at https://www.energy.ca.gov/sites/default/files/2023-\n01/MOU_Dec_2022_CPUC_CEC_ISO_signed_ada.pdf."},{"page":4,"startToken":1042,"endToken":1489,"text":"The Honorable Debbie-Anne A. Reese \nJuly 20, 2026 \nPage 4 \n \n \n \n \n \n \nCEC, CPUC, and CAISO agree on a single forecast set for use in various planning and \nprocurement processes, including transmission planning, resource adequacy, and \nintegrated resource planning.6 In recent years, the CEC has expanded its forecasting \nefforts to account for emerging large loads, including data centers. Working closely with \nutilities and other stakeholders, the CEC incorporates information regarding planned \nprojects, expected utilization rates, project development status, and load ramping \nassumptions into its forecast.7 Confidence levels are determined based on the status of \nload interconnection applications. If projects have signed agreements with the utility for \nelectric service, they are included in the highest confidence group. \n \nThe CEC works closely with the utilities and load serving entities to understand \nproject statuses and the likelihood of completion for these projects. Utilities in the Bay \nArea, with decades of experience planning for new data centers, have shared best \npractices with the CEC for forecasting demand growth. CEC staff used that information \nto develop its forecast methodology and will continue to refine its approaches. As of \nJanuary 2026, the CEC forecasts data center load in the CAISO grid to increase by 1.8 \ngigawatts (GW) by 2030 and 4.9 GW by 2040.8 \nThe CEC also provides geographically specific load information that supports \nCAISO transmission planning studies. As demand growth projections evolve, including \ngrowth associated with data centers and electrification, the updated forecasts are \nincorporated into statewide planning processes to ensure both resource and \ntransmission needs are identified and addressed. \n2. \nCPUC: Planning and Generation Adequacy \nThe CPUC is the principal agency for long-term resource planning and resource \nadequacy within the CAISO balancing authority area. Through its Integrated Resource \nPlanning (IRP) process, the CPUC combines the CEC’s demand forecast and load-\nserving entity portfolio preferences with assumptions about existing and new resources \nthat identify the mix of resources needed to maintain reliability and meet state policy \nobjectives at least cost.  \nThese IRP planning portfolios support procurement requirements imposed on \nCPUC-jurisdictional load-serving entities and serve as a key input into the CAISO’s \ntransmission planning process. The CPUC also shares information regarding the \nexpected location and timing of new resources, enabling CAISO to evaluate \ntransmission needs and resource deliverability. Through the CPUC’s resource mapping \n \n6  \n2025 IEPR forecast - Single Forecast Set Agreement - Updated 20260415 at \nhttps://efiling.energy.ca.gov/GetDocument.aspx?tn=269506.  \n7  \nSee CEC 2026 data center forecast assumptions here at \nhttps://www.energy.ca.gov/sites/default/files/2026-04/Data_Center_Methodology_Memo_ada.pdf.   \n8  \nCalifornia Energy Demand 2025 Hourly Forecast - CAISO – Planning Scenario at \nhttps://efiling.energy.ca.gov/GetDocument.aspx?tn=268127&DocumentContentId=105135."},{"page":5,"startToken":1489,"endToken":1964,"text":"The Honorable Debbie-Anne A. Reese \nJuly 20, 2026 \nPage 5 \n \n \n \n \n \n \nefforts, known as busbar mapping, the CPUC accounts for various factors, including \nwhere new resources could be needed to reliably serve load. The CAISO uses the most \nrecent CPUC portfolio to analyze whether additional transmission is needed to access \nthe resources needed to reliably serve load. This enables, for example, the CAISO to \nplan to interconnect generation resources to serve forecasted data center demand in \nPacific Gas & Electric Company’s (PG&E) service territory.9 \nThe CAISO supports the CPUC’s planning and procurement activities through \noperational expertise, reliability assessments, transmission analysis, and information \nregarding system needs and resource deliverability. This coordination helps ensure that \nprocurement decisions reflect anticipated system conditions and that resources selected \nthrough CPUC processes can be effectively integrated into the transmission system.  \nThe 2025-2026 Transmission Plan approved by the CAISO Board is based on \nstate projections provided to the CAISO in 2025 that California load will grow by 15 GW \nby 2035 and 20 GW by 2040. During that period, installed resource capacity will need to \nincrease by more than 74 GW and 107 GW, respectively.10 These installations will meet \ndemand growth for loads large and small, replace end-of-life resources, and satisfy \npublic policy goals submitted into the transmission planning process. \nThe CPUC's planning assumptions for 2025-2026 anticipated significant \nadditions of generation and energy storage resources to support projected load growth \nand maintain resource adequacy over the coming decades.  The CPUC has ordered \nload serving entities to procure 24.8 GW of mostly new net qualifying capacity (NQC)11  \nbetween 2021 and 2032 to meet reliability needs, and the CPUC regularly reviews the \nneed for additional resources considering changing demand forecast and resource \navailability. The CPUC is authorized to order additional procurement as needed. The \nCPUC requested 14.8 GW NQC to come online between 2021 and 2026; and over 22 \nGW of new net qualifying capacity has come online during this period.12 \n \n9  \nSee Decision Requiring 2029-2032 Electric Resource Procurement and Transmitting Portfolios for \n2026-2027 Transmission Planning Process at \nhttps://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M601/K777/601777006.PDF. \n10  \nSee Board Approved 2025-2026 Transmission Plan at \nhttps://stakeholdercenter.caiso.com/InitiativeDocuments/Board-Approved-2025-2026-Transmission-\nPlan.pdf. Capacity figures here represent nameplate capacity.  \n11  \nNet qualifying capacity represents the actual value a specific generator is qualified to deliver in \nresource adequacy capacity. Net qualifying capacity accounts for the resource’s technology and fuel type, \nand its specific transmission deliverability constraints.   \n12  \nThe amount of new resources serving CAISO load appears to exceed recent CPUC orders for a \nvariety of reasons, including some resources may serve non-CPUC jurisdictional load, some resources \nare repowers that may not qualify for compliance with CPUC orders, some differences between resource \naccreditation methodologies, and some resources were in development prior to the 2019 CPUC IRP \nProcurement order."},{"page":6,"startToken":1964,"endToken":2315,"text":"The Honorable Debbie-Anne A. Reese \nJuly 20, 2026 \nPage 6 \n \n \n \n \n \n \n3. \nCAISO: Transmission Planning and Resource Interconnection  \nThe CAISO has primary responsibility for transmission planning within its \nbalancing authority area pursuant to its FERC-approved Transmission Planning \nProcess.  \nConsistent with the MOU, CAISO's planning process incorporates the CEC's \ndemand forecast and the CPUC's resource portfolios to evaluate whether new \ntransmission facilities or upgrades are needed to maintain reliability, support resource \ndevelopment, and meet state policy objectives. This coordinated planning process \npromotes proactive transmission development that aligns with anticipated resource \nprocurement and demand growth. \nThe CAISO's annual transmission planning process evaluates system needs \nassociated with increasing electrification, large-load growth, and the continued \ndeployment of clean energy resources. Recent transmission plans have included \nprojects designed to support growing demand in areas experiencing significant data \ncenter development and other load growth. By linking resource planning and \ntransmission planning more closely, the agencies and the CAISO seek to ensure that \ntransmission development occurs proactively, aligned with anticipated resource \nprocurement needs rather than relying solely on individual generator-driven \ninterconnection requests. \nWorking with its Participating Transmission Owners, the CAISO also has primary \nresponsibility for administering the generator interconnection process pursuant to FERC \nopen-access requirements. Through this process, the CAISO validates and scores \ninterconnection requests, then works with its Participating Transmission Owners to \nstudy system impacts, identify required network upgrades, and determine the \ntransmission facilities necessary to safely and reliably connect new resources to the \ngrid. The CAISO also performs deliverability assessments to ensure resource adequacy \ncapacity can deliver energy to load centers during peak conditions. \nTo support timely resource development, the CAISO works closely with the \nCPUC and CEC to improve alignment between state procurement priorities, \ntransmission planning decision, and generator interconnection activities. This \ncoordination helps ensure that resources identified through state planning processes \ncan proceed through the interconnection process and become operational when needed \nto support reliability.  \nIn addition to this close coordination and process alignment with the state energy \nagencies, the CAISO works closely with other local regulatory authorities to incorporate \ntheir resource needs into the transmission planning process, ensuring resource \nsufficiency throughout the CAISO footprint."},{"page":7,"startToken":2315,"endToken":2727,"text":"The Honorable Debbie-Anne A. Reese \nJuly 20, 2026 \nPage 7 \n \n \n \n \n \n \nC. \nResource Adequacy: Shared Responsibilities \nResource adequacy is a construct designed to ensure that load serving entities in \nthe CAISO balancing authority area have secured and shown sufficient electric supply \nin a forward operational planning horizon to provide reliable electric service in real-time \nbased on certain planning assumptions and accounting for the specific characteristics of \nthe generation fleet. As the resource mix in California is changing to one comprised \nincreasingly of variable and energy-limited resources, the resource adequacy \nframework in California is focused on ensuring that load serving entities procure \nsufficient resources to meet peak demand and demand across all hours of the day, \nwhile maintaining affordable rates.  \nThe CPUC, in consultation with the CAISO, establishes resource adequacy \nrequirements for CPUC jurisdictional load serving entities. CPUC-jurisdictional load \nserving entities represent approximately 91% of the load in the CAISO’s service \nterritory. Other local regulatory authorities within California, like municipal utilities, \nestablish these requirements for load serving entities under their authority. The CAISO \nonly sets default resource adequacy requirements if a local regulatory authority elects \nnot to establish their own. \nThe resource adequacy framework relies on coordinated activities by the CEC, \nCPUC, and CAISO. The CEC develops the statewide demand forecast used to \nestablish resource adequacy requirements. The CPUC establishes procurement \nrequirements for jurisdictional load-serving entities and administers its resource \nadequacy program. The CAISO validates resource adequacy showings, administers \noperational requirements, and ensures that resource adequacy commitments translate \ninto operational reliability.13 \nThe CPUC's resource adequacy program establishes year-ahead and month-\nahead procurement requirements designed to ensure that sufficient capacity is available \nto meet forecasted demand and reliability needs. The CPUC utilizes the CEC's IEPR \nsingle forecast set, which includes assumptions about data center loads, during the \nCPUC’s year-ahead load forecast process to develop resource adequacy requirements \non one-to-three-year system and local timeframes.  The CPUC has continued to refine \nthe program in response to changes in California's resource mix, including increased \nreliance on renewable generation and energy-limited resources such as battery storage. \nThe CPUC's resource adequacy program has evolved to include a 24-hour “slice-of-\nday” framework, which directly addresses energy sufficiency by requiring individual \nload-serving entities to procure sufficient capacity and reserve margin for all hours of \nthe day, not solely during system peak periods.14 \n \n13  \nThe CPUC can levy penalties against load-serving entities that fail to demonstrate adequate \ncompliance with procurement directives. \n14  \nSee https://stakeholdercenter.caiso.com/InitiativeDocuments/White-Paper-\nResourceAdequacyProcesses-CPUC-Slice-of-Day-Jan09-2024.pdf."},{"page":8,"startToken":2727,"endToken":3112,"text":"The Honorable Debbie-Anne A. Reese \nJuly 20, 2026 \nPage 8 \n \n \n \n \n \n \nAs part of this integrated framework, the CPUC establishes resource \naccreditation methodologies and counting rules used to determine the qualifying \ncapacity of resource types participating in the resource adequacy program. The \nCAISO's role is to translate resource adequacy commitments into operational reliability. \nEach year and month, resource adequacy capacity secured by load-serving entities is \nsubmitted to the CAISO and evaluated under CAISO market and reliability rules. The \nCAISO administers requirements related to resource availability, deliverability, market \nparticipation, and system reliability.  The CAISO also maintains backstop procurement \nauthorities to address reliability risks when needed. \nIn addition, the CAISO performs seasonal reliability assessments, including its \nsummer loads and resources assessment, to evaluate whether available resources are \nsufficient to meet forecasted demand under expected operating conditions. The CAISO \nalso has a “risk of retirement” process to identify plants still needed to maintain \nreliability, or that require replacement capacity. \nThe CPUC and CAISO also coordinate on the implementation of system, local, \nand flexible resource adequacy requirements. While the CPUC establishes procurement \nobligations for jurisdictional load-serving entities, the CAISO provides the technical \nanalyses used to determine local and flexible reliability requirements, and administers \nthe operational rules necessary to ensure those requirements support real-time grid \nreliability. \nD. \nCoordination to Support Timely Resource Development and \nReliability \nThe CAISO coordinates closely with the CPUC, CEC, and the Governor's Office \nof Business and Economic Development (GO-Biz) to identify and address issues that \ncould delay new resources meeting in-service dates and contributing to system \nreliability needs.15 In addition to engagement with state entities, the CAISO also \ncoordinates closely with industry partners, such as participating transmission owners \nand interconnection customers, to understand project-specific challenges and identify \nsystemic challenges. \nAs part of these efforts, the CAISO and CPUC work with transmission owners to \nhost semiannual Transmission Development Forums, which provide transparency \nregarding the status of transmission projects, particularly upgrades approved through \nprevious CAISO transmission plans and upgrades needed to support resources with \nexecuted interconnection agreements.16 The CAISO’s transmission plan likewise \nprovides progress reports on each previously approved upgrade, including up-to-date \n \n15  \nSee The Tracking Energy Development (TED) Task Force, California Governor’s Office of \nBusiness and Economic Development at https://business.ca.gov/industries/climate-and-clean-energy/the-\ntracking-energy-development-ted-task-force/.   \n16  \nSee https://www.caiso.com/meetings-events/topics/transmission-development-forum."},{"page":9,"startToken":3112,"endToken":3519,"text":"The Honorable Debbie-Anne A. Reese \nJuly 20, 2026 \nPage 9 \n \n \n \n \n \n \nin-service dates, and any approved project changes or cancellations due to changing \ntopology, load forecasts, or procurement targets.17 \nAs a foundational step to the CAISO’s generator interconnection process, the \nCAISO annually provides updated information regarding available transmission capacity \non the system.18 Consistent with Order No. 2023, the CAISO provides data in the form \nof an interconnection heatmap and point-of-interconnection constraint map prior to the \nopening of a new interconnection application window.  The CAISO also posts data on \navailable transmission plan deliverability behind each constraint and the associated \npoint of interconnection. The data helps load-serving entities and resource developers \nidentify opportunities to facilitate timely resource development and support procurement \nstrategies aligned with reliability needs. \nIn 2025, the CAISO adopted a process to accelerate as much generation as \npossible within an interconnection cluster, enabling certain projects to come online to \nutilize existing headroom on the system while other projects await completion of \nReliability Network Upgrades. This process enabled 2,720 MW (8 projects) to advance \ntheir completion dates by two or more years as the remaining projects in the cluster \nawait completion of the long lead-time downstream network upgrades.  These \naccelerated projects were in addition to the other thousands of megawatts of new \ncapacity described in Section I.E.1, below. \nIn addition, the CAISO coordinates with the CPUC regarding load-serving entity \nprocurement activities and the development status of procured resources to assess \nwhether those resources are progressing in a timeframe sufficient to meet near- and \nmid-term reliability requirements. Through these ongoing coordination efforts, the \norganizations can identify emerging risks, improve planning and implementation, and \nsupport the timely development of resources needed to maintain reliability while \nadvancing California's clean energy objectives. \nE. \nSufficient Generation and Transmission to Meet Large Load Growth \nCurrent planning assessments do not indicate a systemic generation adequacy \nshortfall comparable to those in other regions. Instead, the principal mandate in \nCalifornia is ensuring the timely development, interconnection, and commercial \noperation of the substantial quantity of resources already identified through state \nplanning processes. The CAISO’s most recent transmission plan likewise identifies \nthose transmission grid upgrades necessary to accommodate large loads and the \ngeneration necessary to supply them. \n \n17  \nSee, e.g., 2025-26 CAISO Transmission Plan, Sections 2.3.3, 3.3.2, and 8.1, at \nhttps://www.caiso.com/documents/board-approved-2025-2026-transmission-plan.pdf. \n18  \nSee Section 3.6 of Appendix KK to the CAISO tariff."},{"page":10,"startToken":3519,"endToken":3736,"text":"The Honorable Debbie-Anne A. Reese \nJuly 20, 2026 \nPage 10 \n \n \n \n \n \n \n1. \nGeneration Sufficiency  \nCalifornia’s coordinated planning and procurement efforts have resulted in nearly \n36 GW of new generation and storage capacity coming online to serve CAISO load \nbetween January 2020 and March 2026, including more than 16 GW of new energy \nstorage.19  \nCumulative Nameplate Megawatts of New Resources, 2020 to 203020 \n \nIn 2025, California brought 6.8 GW of new nameplate capacity online to serve \nload in the CAISO territory for the second consecutive year.21 Load serving entities \nsubject to CPUC jurisdiction currently have over 20 GW of new nameplate capacity \nunder contract to meet procurement requirements by 2029 and will continue to execute \nnew contracts to meet procurement obligations. The CPUC requires 24.8 GW of new \nresource obligations to come online between 2021 and 2032.  This includes 6 GW of \nnet qualifying capacity that in February the CPUC ordered load serving entities to \nprocure by 2032 to account for projected load growth in the CEC’s IEPR demand \nforecast, including growth driven by expected new data centers.  \n \n19  \nSee CPUC May 2026 Resource Tracking Data at https://www.cpuc.ca.gov/-/media/cpuc-\nwebsite/divisions/energy-division/documents/summer-2021-reliability/tracking-energy-\ndevelopment/resource-tracking-data-may-2026-release.pdf. \n20  \nId.  “Other” resources include geothermal, biomass, biogas, and hydropower. \n21  \nId."},{"page":11,"startToken":3736,"endToken":3970,"text":"The Honorable Debbie-Anne A. Reese \nJuly 20, 2026 \nPage 11 \n \n \n \n \n \n \nThe CAISO conducts annual Summer Loads and Resource Assessment \nanalyses to evaluate the sufficiency of the resource adequacy-eligible fleet to meet the \nreliability standard.22 The CAISO’s 2026 analysis indicates that the current portfolio \nmeets that target with a surplus of over 2.5 GW.23 Reliability analyses conducted by the \nstate agencies are directionally consistent with the CAISO’s Summer Loads and \nResource Assessment, demonstrating that the CAISO largely has sufficient generation \nand storage capacity to serve demand under a range of different scenarios, including \nincreased demand growth in the near-term.24  \nThe CAISO’s data aligns with the Commission’s own projections for CAISO \nsupply, which shows significant capacity additions and little to no retirements:25 \n \n \n22  \nThe reliability standard is a 1-in-10 loss of load expectation (LOLE) target and is a measure of the \nnumber of days per year for which the available generation capacity is insufficient to serve the demand \nand maintain required reserves at least once during that day. 0.1 LOLE or 1-day-in-10 LOLE equates to “1 \nday with an event in 10 years.” \n23  \nSee CEC 2026 Summer Energy Reliability Workshop presentation at \nhttps://efiling.energy.ca.gov/GetDocument.aspx?tn=269794&DocumentContentId=106957. \n24  \nId.   \n25  \nFERC, 2026 Summer Energy Market and Electric Reliability Assessment (May 21, 2026) at p. 23, \nhttps://www.ferc.gov/news-events/news/presentation-report-2026-summer-energy-market-and-electric-\nreliability-assessment."},{"page":12,"startToken":3970,"endToken":4403,"text":"The Honorable Debbie-Anne A. Reese \nJuly 20, 2026 \nPage 12 \n \n \n \n \n \n \n2. \nTransmission Sufficiency \nGeneration that cannot reach load is generation in name only. To ensure reliable \nservice and timely interconnections for load and generation, the CAISO and CPUC must \napprove the construction and siting of adequate, affordable transmission upgrades. \nCalifornia’s transmission owners and independent transmission developers must \nconstruct that transmission in time to interconnect planned resources. \nAs described above, the scale of planned resource development remains \nsubstantial. The CAISO's most recent transmission planning studies as part of the 2025-\n2026 transmission planning process evaluated CPUC resource portfolios that included \n40 GW of additional resource development over the next decade.26 Consistent with \nthese planning assumptions, the CAISO has approved transmission investments \ndesigned to support resource integration, enhance system reliability, and provide \naccess to areas with significant generation development potential. The CPUC’s most \nrecently adopted resource portfolio accounts for a higher load forecast than used in the \npervious cycle, and the analysis to derive the adopted portfolio considered sensitivity \ncases reflecting higher levels of electrification and load growth.27 The CAISO is currently \nanalyzing that portfolio in its 2026-2027 transmission planning process, and will \nconsider what additional transmission investments the system requires.  \nCalifornia's planning processes expressly account for large load growth.28 The \nCAISO’s most recent transmission plan, for example, discusses data center and other \nlarge load growth in PG&E’s service territory, where data center growth is most \nconcentrated.29 The transmission plan describes PG&E’s large load interconnection \nrequests, and details the network upgrades necessary to enable them, including \nestimated costs and in-service dates. \nThe CAISO's most recent transmission planning cycles have incorporated \nupdated demand forecasts reflecting increasing electrification, data center development, \nand other emerging load drivers. While localized transmission upgrades are needed to \naccommodate this growth, current planning assessments do not identify a statewide \nresource adequacy deficiency resulting from these trends. Rather, planning efforts are \nfocused on ensuring that resource procurement, interconnection activities, and \n \n26  \nSee Decision Transmitting Electricity Resource Portfolios to the California Independent System \nOperator for 2025-2026 Transmission Planning Process at \nhttps://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M557/K879/557879249.PDF. \n27  \nSee Decision Transmitting Electricity Resource Portfolios to the California Independent System \nOperator for 2026-2027 Transmission Planning Process at \nhttps://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M601/K777/601777006.PDF. \n28  \nSee CAISO 2025-26 Transmission Plan at https://www.caiso.com/documents/board-approved-\n2025-2026-transmission-plan.pdf, Sections 1.5 (discussing large load growth generally) and 2.3 \n(approving or concurring with various transmission upgrades to accommodate large load growth).  \n29  \nId. at Section 2.3.6."},{"page":13,"startToken":4403,"endToken":4825,"text":"The Honorable Debbie-Anne A. Reese \nJuly 20, 2026 \nPage 13 \n \n \n \n \n \n \ntransmission development remain aligned so that resources can be brought online \nwhere and when they are needed. \nContinued coordination among the CPUC, CEC, CAISO, load-serving entities, \ntransmission owners, and resource developers remains essential. However, current \nforecasts and planning studies indicate that California's principal focus is not addressing \nan imminent statewide capacity deficit, but rather successfully executing the resource \nprocurement, transmission expansion, and interconnection activities already identified \nthrough the state's coordinated planning processes to ensure sufficient resources are \navailable to serve projected demand reliably. \n3. \n2025 Market Data \nRecent actual load figures show that demand decreased in California and the \nWest last year.30 According to the CAISO’s Department of Market Monitoring (DMM) \nAnnual Report, from 2024 to 2025, all actual load figures decreased, including average \n(MW), gross (MWh), and peak (MW) load, and similar net load figures (load minus \nvariable generation).31 Peak market load in the Western Energy Imbalance Market \n(WEIM) region was 130.1 GW in 2025, down 3.8 percent from the 2024 peak of 135.3 \nGW.32 This is not to say that load will continue to decrease, but with recent moderate \nload conditions and significant generation capacity additions, the CAISO is not facing \nthe current capacity constraints of the East. \n \nPrices likewise went down from 2024 to 2025.33 Total wholesale costs of serving \nload in the CAISO balancing authority area decreased 6 percent in 2025.34 Controlling \nfor both natural gas costs and greenhouse gas prices, wholesale electric costs \ndecreased by about 24 percent in 2025, “due mainly to lower load, increased renewable \nand storage generation, and the absence of tight supply conditions . . . .”35 The \nfrequency of high-price intervals likewise “declined significantly in 2025 across both day-\nahead and real-time markets, with nearly no intervals exceeding $250/MWh in the day-\nahead market and sharp reductions in real-time price spikes.”36 2025 data aligns with \nthe Commission’s own 2026 summer reliability assessment, which expected wholesale \nprices in California to decrease significantly.37 \n \n30  \nAverage load slightly increased in the Pacific Northwest (+1.9%), Intermountain West (+0.8%), \nand Desert Southwest (+0.2%), but decreased in California (-2.0%). \n31  \nDMM Annual Report at 39-46.  These load figures are not adjusted for weather.  \n32  \nDMM Annual Report at 1. \n33  \nDMM 2025 Annual Report at 3, 124-144.  \n34  \nId.  \n35  \nId.  \n36  \nId. \n37  \nFERC, 2026 Summer Energy Market and Electric Reliability Assessment (May 21, 2026) at p. 17, \nhttps://www.ferc.gov/news-events/news/presentation-report-2026-summer-energy-market-and-electric-"},{"page":14,"startToken":4825,"endToken":5055,"text":"The Honorable Debbie-Anne A. Reese \nJuly 20, 2026 \nPage 14 \n \n \n \n \n \n \n \n \n \n \n \nII. \nCAISO Large Load Stakeholder Initiative \nThe CAISO has convened several stakeholder processes to enhance large load \nprocesses, resource adequacy rules, demand-side market participation, and generator \ninterconnection processes. The CAISO’s Large Load stakeholder initiative will become \nthe primary vehicle for CAISO reforms to address the Order to Show Cause. The other \nstakeholder initiatives described below will provide additional benefits to reliability, \nmarket efficiency, and affordability, but will not affect the timing of the CAISO’s ultimate \ncompliance with the Order to Show Cause, nor California’s resource adequacy to serve \nlarge loads specifically.  \n \nGiven the interplay among the CAISO, transmission service providers, utilities, \nand customers, the CAISO recognized the importance of clarity on roles in planning for \nlarge loads and launched the Large Loads stakeholder initiative. Within the initiative, \nCAISO posted an issue paper in January 2026 outlining roles, responsibilities, and \nprocesses to effectively integrate large loads. In addition, the CAISO posted a straw \nproposal in June 2026 describing possible technical requirements associated with large \nloads. \n \nThe CAISO will refocus the Large Loads initiative on the issues the Commission \nhas identified, which includes many of the issues the CAISO had included in its initial \n \nreliability-assessment (citing data from U.S. Energy Information Administration, Short-Term Energy \nOutlook July 2026, Table 7a, available at https://www.eia.gov/outlooks/steo/pdf/steo_full.pdf)."},{"page":15,"startToken":5055,"endToken":5428,"text":"The Honorable Debbie-Anne A. Reese \nJuly 20, 2026 \nPage 15 \n \n \n \n \n \n \nissue paper. Given the timeline described in the Order, the CAISO expects to expedite \nthe stakeholder initiative, with two discrete proposals: a straw proposal in August and \ndraft final proposal in September, before seeking Western Energy Market Governing \nBody and Board of Governors approval at the October 20 and October 28 meetings, \nrespectively.38 While the stakeholder initiative will be expedited, the CAISO will host \nworkshops and solicit stakeholder feedback on the proposals to better inform the policy \noutcomes. 39 \n \nAction\nTentative date \nPost Straw Proposal\nAugust 12, 2026\nStakeholder workshop\nAugust 19, 2026\nComments due\nSeptember 2, 2026\nPost Draft Final Proposal\nSeptember 21, 2026\nStakeholder workshop\nSeptember 28, 2026\nComments due\nOctober 12, 2026\nWestern Energy Market Governing Body (if necessary)\nOctober 20, 2026\nCAISO Board of Governors\nOctober 28, 2026\nFERC Filing on Order to Show Cause\nNovember 16, 2026\n \nIII. \nOther Relevant CAISO Stakeholder Initiatives \nAlthough the CAISO’s large loads stakeholder initiative will address all the issues \nin the Order to Show Cause, the CAISO is conducting other stakeholder initiatives that \nwill provide additional benefits to reliability, market efficiency, and affordability, as \ndescribed below. The CAISO has not included schedules for these initiatives because \nthey will not affect the timing of the CAISO’s ultimate compliance with the Order to Show \nCause; however, schedules for each initiative are available on the CAISO website.  \n \nA. \nResource Adequacy  \nThe second track of the CAISO’s ongoing resource adequacy stakeholder \ninitiative is examining the Resource Adequacy Availability Incentive Mechanism \n(RAAIM), the CAISO’s primary operational resource adequacy incentive tool. Its focus is \nto improve efficacy during the hours when reliability risk is highest.40 The CAISO \nrecommends a significant reform of RAAIM based on stakeholder feedback. The \nredesigned mechanism would shift from static, pre-defined assessment hours to a \nstructure that targets operational system conditions, with incentives triggered during \nperiods of elevated reliability risk and true scarcity. This approach also provides clear \n \n38  \nDecisional classifications will become more clear as the proposals within the large loads \nstakeholder initiative develop. \n39  \nThis timeline assumes a motion for abeyance, as contemplated by the Order to Show Cause at P \n25. \n40  \nhttps://stakeholdercenter.caiso.com/StakeholderInitiatives/Resource-adequacy-modeling-and-\nprogram-design."},{"page":16,"startToken":5428,"endToken":5829,"text":"The Honorable Debbie-Anne A. Reese \nJuly 20, 2026 \nPage 16 \n \n \n \n \n \n \nsignals in advance of tight conditions, encouraging resources to return from outages \nmore quickly and secure replacement capacity. It sharpens accountability by directly \nlinking financial consequences to availability during critical hours, rather than averaging \nperformance over a month. These reforms are paired with improvements to related \ntools: Clarifying must-offer obligations will ensure that resources bid in their true \noperational capability, thereby increasing the CAISO’s visibility of available capacity. \nLikewise, enhancements to outage substitution processes and definitions aim to reduce \ninefficiencies that can delay maintenance and contribute to higher forced outage rates. \n \nB. \nDemand and Distributed Energy Market Integration \nThe CAISO’s Demand and Distributed Energy Market Integration (DDEMI) \nstakeholder initiative is a multi-track effort focused on enhancing demand flexibility \nwithin the CAISO markets.41  The CAISO has developed various load participation \nmodels capable of enabling loads, both large and small, to reduce their demand and \nparticipate in the CAISO markets economically or as emergency resources. Demand-\nside resources can offer bids that reflect their flexibility to adjust their load in response \nto dispatch. The CAISO has implemented ways to facilitate wholesale market \nparticipation of such resources, and remains committed to empowering the reliable, \nefficient, and seamless utilization of demand flexibility into CAISO operations and \nmarkets. The DDEMI stakeholder initiative will continue this work, enhancing \nparticipation models to aid large and small loads to interconnect more quickly, \naffordably, and efficiently. \n \nThe CAISO also recognizes that increasing numbers of large loads may raise \nadditional market design considerations that extend beyond the current scope of \nDDEMI, and the Order to Show Cause. Although it would be premature to identify \nspecific market design changes before further stakeholder engagement and analysis, \ngrowth in large loads may present opportunities to evaluate whether existing market \nconstructs continue to appropriately represent evolving load characteristics and \noperational behavior across the CAISO, WEIM, and Extended Day-Ahead Market \n(EDAM) footprints. The WEIM and EDAM will enable large-load growth across the wider \nregional footprint with their ability to move energy efficiently from where it is available to \nwhere it is needed across a robust network covering 80% of the West, and producing \n$8.6 billion in benefits since 2014.42 Accordingly, the CAISO intends to continue \nassessing large-load-related market design issues through its stakeholder processes \nand market roadmap initiatives. \n \n \n41  \nhttps://stakeholdercenter.caiso.com/StakeholderInitiatives/Demand-Distributed-Energy-Market-\nIntegration.  \n42  \nhttps://www.westernenergymarkets.com/western-energy-imbalance-market-weim/benefits."},{"page":17,"startToken":5829,"endToken":6106,"text":"The Honorable Debbie-Anne A. Reese \nJuly 20, 2026 \nPage 17 \n \n \n \n \n \n \nC. \nInterconnection Process Enhancements \nParallel with the Commission’s reforms in Order No. 2023, the CAISO’s \nInterconnection Process Enhancements (IPE) stakeholder initiative has played a pivotal \nrole in ensuring interconnection service to first-ready generation projects.43  In 2024, the \nCAISO became the first ISO/RTO to establish an interconnection request intake scoring \nprocess.44 That process helped the CAISO focus its cluster 15 interconnection study on \nfirst-ready projects, bringing request volumes back to manageable levels. Other \nISO/RTOs have since adopted similar processes.45 Track 5.0 of the CAISO’s IPE \ninitiative recently concluded, and the CAISO will continue to submit those \nenhancements for Commission approval.46  \n \nFurther, in the interest of continuous improvement, the CAISO is in frequent \ncommunication with transmission owners and interconnection customers to ensure \ntimely interconnection of generation resources to meet increasing load growth. The ISO \nintends to open a sixth IPE initiative (IPE 6) in 2026 or early 2027 to seek additional \nenhancements to the process in time for the opening of the cluster 17 interconnection \napplication window in October of 2027. The CAISO recognizes the potential interaction \nbetween large load interconnection and resource interconnection processes and may \nconsider some complementary enhancements either in the large load or IPE initiative. \n \n \n43  \nhttps://stakeholdercenter.caiso.com/StakeholderInitiatives/Interconnection-process-\nenhancements-5-0.  \n44  \nCalifornia Independent System Operator Corp., 188 FERC ¶ 61,225 (2024). \n45  \nSee, e.g., PJM Interconnection LLC, 190 FERC ¶ 61,084 (2025); Southwest Power Pool Inc., 192 \nFERC ¶ 61,062 (2025); Midcontinent Independent System Operator, Inc., 190 FERC ¶ 61,057 (2025). \n46  \nThe first set of enhancements are currently pending in Docket No. ER26-2747-000."},{"page":18,"startToken":6106,"endToken":6177,"text":"The Honorable Debbie-Anne A. Reese \nJuly 20, 2026 \nPage 18 \n \n \n \n \n \n \nIV. \nConclusion \nThe CAISO welcomes the opportunity to work with the Commission in serving the \nongoing influx of large loads while maintaining reliability and affordability. \n \n \n \n \n \n \n \nRespectfully submitted, \n \n \n/s/ William H. Weaver \n \n \n \n \n \n \nRoger E. Collanton \n \n \n \n \n \n \n  General Counsel \n \n \n \n \n \n \nWilliam H. Weaver \n \n \n \n \n \n \n  Assistant General Counsel \n \n \n \n \n \n \nCalifornia Independent System \n \n \n \n \n \n \nOperator Corporation \n \n \n \n \n \n \n250 Outcropping Way \n \n \n \n \n \n \nFolsom, CA 95630 \n \nCounsel for the California Independent System \nOperator Corporation"},{"page":19,"startToken":6177,"endToken":6245,"text":"CERTIFICATE OF SERVICE \n \nI certify that I have served the foregoing document upon the parties listed on the \nofficial service list in the captioned proceeding, in accordance with the requirements of \nRule 2010 of the Commission’s Rules of Practice and Procedure (18 C.F.R. § \n385.2010). \n \nDated at Folsom, California this 20th day of July 2026. \n \n/s/ Ariana Rebancos \nAriana Rebancos \nAn employee of the California ISO"}],"sections":[{"p":1,"at":0,"title":"Opening text","method":"opening text","endPage":2,"endAt":1148,"startToken":0,"endToken":417},{"p":2,"at":1148,"title":"I. Ensuring Generation Adequacy in California","method":"printed heading","endPage":2,"endAt":1196,"startToken":417,"endToken":423},{"p":2,"at":1196,"title":"A. Overview","method":"printed heading","endPage":3,"endAt":648,"startToken":423,"endToken":740},{"p":3,"at":648,"title":"B. Roles and Responsibilities: Integrated Planning, Procurement, and","method":"printed heading","endPage":7,"endAt":71,"startToken":740,"endToken":2325},{"p":7,"at":71,"title":"C. Resource Adequacy: Shared Responsibilities","method":"printed heading","endPage":8,"endAt":1615,"startToken":2325,"endToken":2937},{"p":8,"at":1615,"title":"D. Coordination to Support Timely Resource Development and","method":"printed heading","endPage":9,"endAt":2107,"startToken":2937,"endToken":3403},{"p":9,"at":2107,"title":"E. Sufficient Generation and Transmission to Meet Large Load Growth","method":"printed heading","endPage":14,"endAt":82,"startToken":3403,"endToken":4835},{"p":14,"at":82,"title":"II. CAISO Large Load Stakeholder Initiative","method":"printed heading","endPage":15,"endAt":1014,"startToken":4835,"endToken":5208},{"p":15,"at":1014,"title":"III. Other Relevant CAISO Stakeholder Initiatives","method":"printed heading","endPage":15,"endAt":1592,"startToken":5208,"endToken":5291},{"p":15,"at":1592,"title":"A. Resource Adequacy","method":"printed heading","endPage":16,"endAt":773,"startToken":5291,"endToken":5529},{"p":16,"at":773,"title":"B. Demand and Distributed Energy Market Integration","method":"printed heading","endPage":17,"endAt":72,"startToken":5529,"endToken":5839},{"p":17,"at":72,"title":"C. Interconnection Process Enhancements","method":"printed heading","endPage":18,"endAt":72,"startToken":5839,"endToken":6116},{"p":18,"at":72,"title":"IV. Conclusion","method":"printed heading","endPage":18,"endAt":77,"startToken":6116,"endToken":6117},{"p":18,"at":77,"title":"Conclusion","method":"printed heading","endPage":19,"endAt":0,"startToken":6117,"endToken":6177},{"p":19,"at":0,"title":"CERTIFICATE OF SERVICE","method":"printed heading","endPage":19,"endAt":421,"startToken":6177,"endToken":6245}]}