EL26-71-000 · 2026-07-20 · California Independent System Operator Corporation

CAISO reports on resource adequacy and large-load proposals

July 20, 2026 
 
 
 
The Honorable Debbie-Anne A. Reese 
Secretary  
Federal Energy Regulatory Commission 
888 First Street, NE 
Washington, DC 20426 
 
 
Re: 
California Independent System Operator Corporation 
 
 
Docket No. EL26-71-000 
 
Informational Report 
 
Dear Secretary Reese: 
 
The California Independent System Operator Corporation (CAISO) submits this 
informational report in compliance with the Commission’s June 18, 2026 Order to Show 
Cause.1 
As home to Silicon Valley and 33 of the 50 top artificial intelligence companies, 
California is leading the nation in preparing its electric grid for the next generation of 
economic growth driven by data centers and other large electric loads.2 Through 
coordinated resource planning, long-term procurement of clean and reliable generation, 
and an unprecedented expansion of the transmission system, the CAISO and its 
Participating Transmission Owners are working to ensure that new demand can be 
served without compromising reliability or affordability. This work entails close, careful 
coordination with California’s principal energy agencies, the California Public Utilities 
Commission (CPUC) and the California Energy Commission (CEC), and local 
regulators. California's approach recognizes that generation and transmission are 
complementary investments: securing adequate generating resources is only valuable if 
those resources can be delivered where and when they are needed. By planning both in 
tandem over longer time horizons, California’s framework supports continued 
investment in innovation, electrification, and advanced computing infrastructure while 
 
1  
California Independent System Operator Corp., et al., 195 FERC ¶ 61,214 at PP 120-122 (2026) 
(Order to Show Cause). 
2  
California Executive Order N-5-26 at https://www.gov.ca.gov/wp-content/uploads/2026/03/3.30-
FINAL-Trusted-AI-Procurement-EO-N-5-26_ATTESTED.pdf. 
California Independent System Operator Corporation

The Honorable Debbie-Anne A. Reese 
July 20, 2026 
Page 2 
 
 
 
 
 
 
maintaining a reliable, resilient, and increasingly carbon-free electric grid for all 
customers. 
The CAISO shares the Commission’s recognition that the CAISO must continue 
its work to ensure that the electric system can accommodate rapidly growing demand 
from data centers and other large loads. This will require continued attention to resource 
adequacy, generation development, transmission expansion, and both load and 
generator interconnection processes. The CAISO and its Participating Transmission 
Owners support this effort and are committed to working with the Commission, 
California regulators, neighboring balancing authorities, utilities, developers, and other 
stakeholders to identify and remove potential barriers that could delay the deployment 
of large loads and new resources. Meeting the demands of the digital economy will 
require sustained collaboration to ensure that sufficient generation is developed, 
transmission infrastructure keeps pace, and new large loads can interconnect to the grid 
in a timely, reliable, and cost-effective manner. 
I. 
Ensuring Generation Adequacy in California 
A. 
Overview 
As the Commission recognizes in the Order to Show Cause,3 California's 
integrated resource and transmission planning framework is fundamentally different 
from many other organized markets that are confronting capacity shortfalls associated 
with unprecedented data center growth, electrification, and other emerging load growth. 
For several years, California’s statewide planning processes have incorporated 
expected increases in electricity demand and have proactively identified the resources 
and infrastructure necessary to maintain reliability.  
Under California’s integrated planning framework, the CEC develops long-term 
demand forecasts, the CPUC identifies system needs and directs resource 
procurement, and the CAISO plans the transmission system and administers the 
interconnection process to deliver those resources. The CPUC has primary 
responsibility for regulatory oversight of resource adequacy procurement within the 
CAISO and plays the principal role in ensuring load-serving entities procure sufficient 
resources to meet reliability needs.4 The CAISO coordinates closely with the CPUC on 
the resource adequacy program.  
California's planning assumptions already reflect substantial anticipated demand 
growth from transportation electrification, building electrification, industrial development, 
and emerging large-load customers, including data centers. These assumptions are 
 
3  
Order to Show Cause at PP 21 et seq. 
4  
See Meeting the Challenge of Resource Adequacy, Docket No. AD25-7-000, Statement of Molly 
Sterkel, CPUC, (May 28, 2025) https://www.ferc.gov/media/meredith-sterkel-california-public-utilities-
commission-director-electric-supply-planning-and, Statement of Neil Millar, CAISO (May 28, 2025) 
https://www.ferc.gov/media/neil-millar-caiso-vice-president-infrastructure-and-operations-planning.

The Honorable Debbie-Anne A. Reese 
July 20, 2026 
Page 3 
 
 
 
 
 
 
incorporated into the CEC's demand forecasts and inform the CPUC's Integrated 
Resource Planning process and procurement requirements. This coordinated approach 
has enabled procurement and infrastructure development that is specifically designed to 
timely meet anticipated load growth.  
This coordinated process has enabled the addition of nearly 36,000 MW of new 
generating capacity to the grid since 2020, as well as unprecedented amounts of battery 
energy storage, helping to strengthen system reliability during periods of high demand 
and changing grid conditions.  
B. 
Roles and Responsibilities: Integrated Planning, Procurement, and 
Infrastructure Development 
As described above, the CAISO works in close coordination with the CPUC, the 
CEC, state agencies, and local regulatory authorities through an established planning 
framework designed to align electricity demand forecasting, resource planning and 
procurement, transmission planning, generator interconnection activities, and resource 
adequacy. This coordination is guided principally through a 2022 Memorandum of 
Understanding (MOU) among the CPUC, CEC, and CAISO.5 
The CEC, CPUC, and CAISO regularly exchange planning data and 
assessments to ensure that forecasted demand growth, resource development needs, 
transmission requirements, and reliability considerations are reflected consistently 
throughout California's planning processes for the CAISO’s balancing authority area. 
1. 
CEC: Long-Term Demand Forecasting 
The CEC serves as the state's lead forecasting agency and develops the state’s 
official long-term electricity demand forecast through its Integrated Energy Policy Report 
(IEPR) process. The forecast evaluates expected load growth over ten-year and long-
term planning horizons, and incorporates factors such as data centers, transportation 
electrification, building electrification, industrial and agricultural development, economic 
trends, climate impacts, and California's greenhouse-gas reduction policies. The 
demand forecast serves as the common planning foundation for California’s resource 
and transmission planning processes. The CPUC relies on the forecast to determine 
resource planning and procurement needs, while the CAISO uses it for transmission 
planning activities.  
The forecast is updated annually to reflect the latest data, planning assumptions, 
and forecast methodologies. The CEC produces a baseline forecast and set of 
scenarios including high, mid, and low variations. As part of each forecasting cycle, the 
 
5  
Memorandum of Understanding Between the California Public Utilities Commission and the 
California Energy Commission and the California Independent System Operator Regarding Transmission 
and Resource Planning and Implementation at https://www.energy.ca.gov/sites/default/files/2023-
01/MOU_Dec_2022_CPUC_CEC_ISO_signed_ada.pdf.

The Honorable Debbie-Anne A. Reese 
July 20, 2026 
Page 4 
 
 
 
 
 
 
CEC, CPUC, and CAISO agree on a single forecast set for use in various planning and 
procurement processes, including transmission planning, resource adequacy, and 
integrated resource planning.6 In recent years, the CEC has expanded its forecasting 
efforts to account for emerging large loads, including data centers. Working closely with 
utilities and other stakeholders, the CEC incorporates information regarding planned 
projects, expected utilization rates, project development status, and load ramping 
assumptions into its forecast.7 Confidence levels are determined based on the status of 
load interconnection applications. If projects have signed agreements with the utility for 
electric service, they are included in the highest confidence group. 
 
The CEC works closely with the utilities and load serving entities to understand 
project statuses and the likelihood of completion for these projects. Utilities in the Bay 
Area, with decades of experience planning for new data centers, have shared best 
practices with the CEC for forecasting demand growth. CEC staff used that information 
to develop its forecast methodology and will continue to refine its approaches. As of 
January 2026, the CEC forecasts data center load in the CAISO grid to increase by 1.8 
gigawatts (GW) by 2030 and 4.9 GW by 2040.8 
The CEC also provides geographically specific load information that supports 
CAISO transmission planning studies. As demand growth projections evolve, including 
growth associated with data centers and electrification, the updated forecasts are 
incorporated into statewide planning processes to ensure both resource and 
transmission needs are identified and addressed. 
2. 
CPUC: Planning and Generation Adequacy 
The CPUC is the principal agency for long-term resource planning and resource 
adequacy within the CAISO balancing authority area. Through its Integrated Resource 
Planning (IRP) process, the CPUC combines the CEC’s demand forecast and load-
serving entity portfolio preferences with assumptions about existing and new resources 
that identify the mix of resources needed to maintain reliability and meet state policy 
objectives at least cost.  
These IRP planning portfolios support procurement requirements imposed on 
CPUC-jurisdictional load-serving entities and serve as a key input into the CAISO’s 
transmission planning process. The CPUC also shares information regarding the 
expected location and timing of new resources, enabling CAISO to evaluate 
transmission needs and resource deliverability. Through the CPUC’s resource mapping 
 
6  
2025 IEPR forecast - Single Forecast Set Agreement - Updated 20260415 at 
https://efiling.energy.ca.gov/GetDocument.aspx?tn=269506.  
7  
See CEC 2026 data center forecast assumptions here at 
https://www.energy.ca.gov/sites/default/files/2026-04/Data_Center_Methodology_Memo_ada.pdf.   
8  
California Energy Demand 2025 Hourly Forecast - CAISO – Planning Scenario at 
https://efiling.energy.ca.gov/GetDocument.aspx?tn=268127&DocumentContentId=105135.

The Honorable Debbie-Anne A. Reese 
July 20, 2026 
Page 5 
 
 
 
 
 
 
efforts, known as busbar mapping, the CPUC accounts for various factors, including 
where new resources could be needed to reliably serve load. The CAISO uses the most 
recent CPUC portfolio to analyze whether additional transmission is needed to access 
the resources needed to reliably serve load. This enables, for example, the CAISO to 
plan to interconnect generation resources to serve forecasted data center demand in 
Pacific Gas & Electric Company’s (PG&E) service territory.9 
The CAISO supports the CPUC’s planning and procurement activities through 
operational expertise, reliability assessments, transmission analysis, and information 
regarding system needs and resource deliverability. This coordination helps ensure that 
procurement decisions reflect anticipated system conditions and that resources selected 
through CPUC processes can be effectively integrated into the transmission system.  
The 2025-2026 Transmission Plan approved by the CAISO Board is based on 
state projections provided to the CAISO in 2025 that California load will grow by 15 GW 
by 2035 and 20 GW by 2040. During that period, installed resource capacity will need to 
increase by more than 74 GW and 107 GW, respectively.10 These installations will meet 
demand growth for loads large and small, replace end-of-life resources, and satisfy 
public policy goals submitted into the transmission planning process. 
The CPUC's planning assumptions for 2025-2026 anticipated significant 
additions of generation and energy storage resources to support projected load growth 
and maintain resource adequacy over the coming decades.  The CPUC has ordered 
load serving entities to procure 24.8 GW of mostly new net qualifying capacity (NQC)11  
between 2021 and 2032 to meet reliability needs, and the CPUC regularly reviews the 
need for additional resources considering changing demand forecast and resource 
availability. The CPUC is authorized to order additional procurement as needed. The 
CPUC requested 14.8 GW NQC to come online between 2021 and 2026; and over 22 
GW of new net qualifying capacity has come online during this period.12 
 
9  
See Decision Requiring 2029-2032 Electric Resource Procurement and Transmitting Portfolios for 
2026-2027 Transmission Planning Process at 
https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M601/K777/601777006.PDF. 
10  
See Board Approved 2025-2026 Transmission Plan at 
https://stakeholdercenter.caiso.com/InitiativeDocuments/Board-Approved-2025-2026-Transmission-
Plan.pdf. Capacity figures here represent nameplate capacity.  
11  
Net qualifying capacity represents the actual value a specific generator is qualified to deliver in 
resource adequacy capacity. Net qualifying capacity accounts for the resource’s technology and fuel type, 
and its specific transmission deliverability constraints.   
12  
The amount of new resources serving CAISO load appears to exceed recent CPUC orders for a 
variety of reasons, including some resources may serve non-CPUC jurisdictional load, some resources 
are repowers that may not qualify for compliance with CPUC orders, some differences between resource 
accreditation methodologies, and some resources were in development prior to the 2019 CPUC IRP 
Procurement order.

The Honorable Debbie-Anne A. Reese 
July 20, 2026 
Page 6 
 
 
 
 
 
 
3. 
CAISO: Transmission Planning and Resource Interconnection  
The CAISO has primary responsibility for transmission planning within its 
balancing authority area pursuant to its FERC-approved Transmission Planning 
Process.  
Consistent with the MOU, CAISO's planning process incorporates the CEC's 
demand forecast and the CPUC's resource portfolios to evaluate whether new 
transmission facilities or upgrades are needed to maintain reliability, support resource 
development, and meet state policy objectives. This coordinated planning process 
promotes proactive transmission development that aligns with anticipated resource 
procurement and demand growth. 
The CAISO's annual transmission planning process evaluates system needs 
associated with increasing electrification, large-load growth, and the continued 
deployment of clean energy resources. Recent transmission plans have included 
projects designed to support growing demand in areas experiencing significant data 
center development and other load growth. By linking resource planning and 
transmission planning more closely, the agencies and the CAISO seek to ensure that 
transmission development occurs proactively, aligned with anticipated resource 
procurement needs rather than relying solely on individual generator-driven 
interconnection requests. 
Working with its Participating Transmission Owners, the CAISO also has primary 
responsibility for administering the generator interconnection process pursuant to FERC 
open-access requirements. Through this process, the CAISO validates and scores 
interconnection requests, then works with its Participating Transmission Owners to 
study system impacts, identify required network upgrades, and determine the 
transmission facilities necessary to safely and reliably connect new resources to the 
grid. The CAISO also performs deliverability assessments to ensure resource adequacy 
capacity can deliver energy to load centers during peak conditions. 
To support timely resource development, the CAISO works closely with the 
CPUC and CEC to improve alignment between state procurement priorities, 
transmission planning decision, and generator interconnection activities. This 
coordination helps ensure that resources identified through state planning processes 
can proceed through the interconnection process and become operational when needed 
to support reliability.  
In addition to this close coordination and process alignment with the state energy 
agencies, the CAISO works closely with other local regulatory authorities to incorporate 
their resource needs into the transmission planning process, ensuring resource 
sufficiency throughout the CAISO footprint.

The Honorable Debbie-Anne A. Reese 
July 20, 2026 
Page 7 
 
 
 
 
 
 
C. 
Resource Adequacy: Shared Responsibilities 
Resource adequacy is a construct designed to ensure that load serving entities in 
the CAISO balancing authority area have secured and shown sufficient electric supply 
in a forward operational planning horizon to provide reliable electric service in real-time 
based on certain planning assumptions and accounting for the specific characteristics of 
the generation fleet. As the resource mix in California is changing to one comprised 
increasingly of variable and energy-limited resources, the resource adequacy 
framework in California is focused on ensuring that load serving entities procure 
sufficient resources to meet peak demand and demand across all hours of the day, 
while maintaining affordable rates.  
The CPUC, in consultation with the CAISO, establishes resource adequacy 
requirements for CPUC jurisdictional load serving entities. CPUC-jurisdictional load 
serving entities represent approximately 91% of the load in the CAISO’s service 
territory. Other local regulatory authorities within California, like municipal utilities, 
establish these requirements for load serving entities under their authority. The CAISO 
only sets default resource adequacy requirements if a local regulatory authority elects 
not to establish their own. 
The resource adequacy framework relies on coordinated activities by the CEC, 
CPUC, and CAISO. The CEC develops the statewide demand forecast used to 
establish resource adequacy requirements. The CPUC establishes procurement 
requirements for jurisdictional load-serving entities and administers its resource 
adequacy program. The CAISO validates resource adequacy showings, administers 
operational requirements, and ensures that resource adequacy commitments translate 
into operational reliability.13 
The CPUC's resource adequacy program establishes year-ahead and month-
ahead procurement requirements designed to ensure that sufficient capacity is available 
to meet forecasted demand and reliability needs. The CPUC utilizes the CEC's IEPR 
single forecast set, which includes assumptions about data center loads, during the 
CPUC’s year-ahead load forecast process to develop resource adequacy requirements 
on one-to-three-year system and local timeframes.  The CPUC has continued to refine 
the program in response to changes in California's resource mix, including increased 
reliance on renewable generation and energy-limited resources such as battery storage. 
The CPUC's resource adequacy program has evolved to include a 24-hour “slice-of-
day” framework, which directly addresses energy sufficiency by requiring individual 
load-serving entities to procure sufficient capacity and reserve margin for all hours of 
the day, not solely during system peak periods.14 
 
13  
The CPUC can levy penalties against load-serving entities that fail to demonstrate adequate 
compliance with procurement directives. 
14  
See https://stakeholdercenter.caiso.com/InitiativeDocuments/White-Paper-
ResourceAdequacyProcesses-CPUC-Slice-of-Day-Jan09-2024.pdf.

The Honorable Debbie-Anne A. Reese 
July 20, 2026 
Page 8 
 
 
 
 
 
 
As part of this integrated framework, the CPUC establishes resource 
accreditation methodologies and counting rules used to determine the qualifying 
capacity of resource types participating in the resource adequacy program. The 
CAISO's role is to translate resource adequacy commitments into operational reliability. 
Each year and month, resource adequacy capacity secured by load-serving entities is 
submitted to the CAISO and evaluated under CAISO market and reliability rules. The 
CAISO administers requirements related to resource availability, deliverability, market 
participation, and system reliability.  The CAISO also maintains backstop procurement 
authorities to address reliability risks when needed. 
In addition, the CAISO performs seasonal reliability assessments, including its 
summer loads and resources assessment, to evaluate whether available resources are 
sufficient to meet forecasted demand under expected operating conditions. The CAISO 
also has a “risk of retirement” process to identify plants still needed to maintain 
reliability, or that require replacement capacity. 
The CPUC and CAISO also coordinate on the implementation of system, local, 
and flexible resource adequacy requirements. While the CPUC establishes procurement 
obligations for jurisdictional load-serving entities, the CAISO provides the technical 
analyses used to determine local and flexible reliability requirements, and administers 
the operational rules necessary to ensure those requirements support real-time grid 
reliability. 
D. 
Coordination to Support Timely Resource Development and 
Reliability 
The CAISO coordinates closely with the CPUC, CEC, and the Governor's Office 
of Business and Economic Development (GO-Biz) to identify and address issues that 
could delay new resources meeting in-service dates and contributing to system 
reliability needs.15 In addition to engagement with state entities, the CAISO also 
coordinates closely with industry partners, such as participating transmission owners 
and interconnection customers, to understand project-specific challenges and identify 
systemic challenges. 
As part of these efforts, the CAISO and CPUC work with transmission owners to 
host semiannual Transmission Development Forums, which provide transparency 
regarding the status of transmission projects, particularly upgrades approved through 
previous CAISO transmission plans and upgrades needed to support resources with 
executed interconnection agreements.16 The CAISO’s transmission plan likewise 
provides progress reports on each previously approved upgrade, including up-to-date 
 
15  
See The Tracking Energy Development (TED) Task Force, California Governor’s Office of 
Business and Economic Development at https://business.ca.gov/industries/climate-and-clean-energy/the-
tracking-energy-development-ted-task-force/.   
16  
See https://www.caiso.com/meetings-events/topics/transmission-development-forum.

The Honorable Debbie-Anne A. Reese 
July 20, 2026 
Page 9 
 
 
 
 
 
 
in-service dates, and any approved project changes or cancellations due to changing 
topology, load forecasts, or procurement targets.17 
As a foundational step to the CAISO’s generator interconnection process, the 
CAISO annually provides updated information regarding available transmission capacity 
on the system.18 Consistent with Order No. 2023, the CAISO provides data in the form 
of an interconnection heatmap and point-of-interconnection constraint map prior to the 
opening of a new interconnection application window.  The CAISO also posts data on 
available transmission plan deliverability behind each constraint and the associated 
point of interconnection. The data helps load-serving entities and resource developers 
identify opportunities to facilitate timely resource development and support procurement 
strategies aligned with reliability needs. 
In 2025, the CAISO adopted a process to accelerate as much generation as 
possible within an interconnection cluster, enabling certain projects to come online to 
utilize existing headroom on the system while other projects await completion of 
Reliability Network Upgrades. This process enabled 2,720 MW (8 projects) to advance 
their completion dates by two or more years as the remaining projects in the cluster 
await completion of the long lead-time downstream network upgrades.  These 
accelerated projects were in addition to the other thousands of megawatts of new 
capacity described in Section I.E.1, below. 
In addition, the CAISO coordinates with the CPUC regarding load-serving entity 
procurement activities and the development status of procured resources to assess 
whether those resources are progressing in a timeframe sufficient to meet near- and 
mid-term reliability requirements. Through these ongoing coordination efforts, the 
organizations can identify emerging risks, improve planning and implementation, and 
support the timely development of resources needed to maintain reliability while 
advancing California's clean energy objectives. 
E. 
Sufficient Generation and Transmission to Meet Large Load Growth 
Current planning assessments do not indicate a systemic generation adequacy 
shortfall comparable to those in other regions. Instead, the principal mandate in 
California is ensuring the timely development, interconnection, and commercial 
operation of the substantial quantity of resources already identified through state 
planning processes. The CAISO’s most recent transmission plan likewise identifies 
those transmission grid upgrades necessary to accommodate large loads and the 
generation necessary to supply them. 
 
17  
See, e.g., 2025-26 CAISO Transmission Plan, Sections 2.3.3, 3.3.2, and 8.1, at 
https://www.caiso.com/documents/board-approved-2025-2026-transmission-plan.pdf. 
18  
See Section 3.6 of Appendix KK to the CAISO tariff.

The Honorable Debbie-Anne A. Reese 
July 20, 2026 
Page 10 
 
 
 
 
 
 
1. 
Generation Sufficiency  
California’s coordinated planning and procurement efforts have resulted in nearly 
36 GW of new generation and storage capacity coming online to serve CAISO load 
between January 2020 and March 2026, including more than 16 GW of new energy 
storage.19  
Cumulative Nameplate Megawatts of New Resources, 2020 to 203020 
 
In 2025, California brought 6.8 GW of new nameplate capacity online to serve 
load in the CAISO territory for the second consecutive year.21 Load serving entities 
subject to CPUC jurisdiction currently have over 20 GW of new nameplate capacity 
under contract to meet procurement requirements by 2029 and will continue to execute 
new contracts to meet procurement obligations. The CPUC requires 24.8 GW of new 
resource obligations to come online between 2021 and 2032.  This includes 6 GW of 
net qualifying capacity that in February the CPUC ordered load serving entities to 
procure by 2032 to account for projected load growth in the CEC’s IEPR demand 
forecast, including growth driven by expected new data centers.  
 
19  
See CPUC May 2026 Resource Tracking Data at https://www.cpuc.ca.gov/-/media/cpuc-
website/divisions/energy-division/documents/summer-2021-reliability/tracking-energy-
development/resource-tracking-data-may-2026-release.pdf. 
20  
Id.  “Other” resources include geothermal, biomass, biogas, and hydropower. 
21  
Id.

The Honorable Debbie-Anne A. Reese 
July 20, 2026 
Page 11 
 
 
 
 
 
 
The CAISO conducts annual Summer Loads and Resource Assessment 
analyses to evaluate the sufficiency of the resource adequacy-eligible fleet to meet the 
reliability standard.22 The CAISO’s 2026 analysis indicates that the current portfolio 
meets that target with a surplus of over 2.5 GW.23 Reliability analyses conducted by the 
state agencies are directionally consistent with the CAISO’s Summer Loads and 
Resource Assessment, demonstrating that the CAISO largely has sufficient generation 
and storage capacity to serve demand under a range of different scenarios, including 
increased demand growth in the near-term.24  
The CAISO’s data aligns with the Commission’s own projections for CAISO 
supply, which shows significant capacity additions and little to no retirements:25 
 
 
22  
The reliability standard is a 1-in-10 loss of load expectation (LOLE) target and is a measure of the 
number of days per year for which the available generation capacity is insufficient to serve the demand 
and maintain required reserves at least once during that day. 0.1 LOLE or 1-day-in-10 LOLE equates to “1 
day with an event in 10 years.” 
23  
See CEC 2026 Summer Energy Reliability Workshop presentation at 
https://efiling.energy.ca.gov/GetDocument.aspx?tn=269794&DocumentContentId=106957. 
24  
Id.   
25  
FERC, 2026 Summer Energy Market and Electric Reliability Assessment (May 21, 2026) at p. 23, 
https://www.ferc.gov/news-events/news/presentation-report-2026-summer-energy-market-and-electric-
reliability-assessment.

The Honorable Debbie-Anne A. Reese 
July 20, 2026 
Page 12 
 
 
 
 
 
 
2. 
Transmission Sufficiency 
Generation that cannot reach load is generation in name only. To ensure reliable 
service and timely interconnections for load and generation, the CAISO and CPUC must 
approve the construction and siting of adequate, affordable transmission upgrades. 
California’s transmission owners and independent transmission developers must 
construct that transmission in time to interconnect planned resources. 
As described above, the scale of planned resource development remains 
substantial. The CAISO's most recent transmission planning studies as part of the 2025-
2026 transmission planning process evaluated CPUC resource portfolios that included 
40 GW of additional resource development over the next decade.26 Consistent with 
these planning assumptions, the CAISO has approved transmission investments 
designed to support resource integration, enhance system reliability, and provide 
access to areas with significant generation development potential. The CPUC’s most 
recently adopted resource portfolio accounts for a higher load forecast than used in the 
pervious cycle, and the analysis to derive the adopted portfolio considered sensitivity 
cases reflecting higher levels of electrification and load growth.27 The CAISO is currently 
analyzing that portfolio in its 2026-2027 transmission planning process, and will 
consider what additional transmission investments the system requires.  
California's planning processes expressly account for large load growth.28 The 
CAISO’s most recent transmission plan, for example, discusses data center and other 
large load growth in PG&E’s service territory, where data center growth is most 
concentrated.29 The transmission plan describes PG&E’s large load interconnection 
requests, and details the network upgrades necessary to enable them, including 
estimated costs and in-service dates. 
The CAISO's most recent transmission planning cycles have incorporated 
updated demand forecasts reflecting increasing electrification, data center development, 
and other emerging load drivers. While localized transmission upgrades are needed to 
accommodate this growth, current planning assessments do not identify a statewide 
resource adequacy deficiency resulting from these trends. Rather, planning efforts are 
focused on ensuring that resource procurement, interconnection activities, and 
 
26  
See Decision Transmitting Electricity Resource Portfolios to the California Independent System 
Operator for 2025-2026 Transmission Planning Process at 
https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M557/K879/557879249.PDF. 
27  
See Decision Transmitting Electricity Resource Portfolios to the California Independent System 
Operator for 2026-2027 Transmission Planning Process at 
https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M601/K777/601777006.PDF. 
28  
See CAISO 2025-26 Transmission Plan at https://www.caiso.com/documents/board-approved-
2025-2026-transmission-plan.pdf, Sections 1.5 (discussing large load growth generally) and 2.3 
(approving or concurring with various transmission upgrades to accommodate large load growth).  
29  
Id. at Section 2.3.6.

The Honorable Debbie-Anne A. Reese 
July 20, 2026 
Page 13 
 
 
 
 
 
 
transmission development remain aligned so that resources can be brought online 
where and when they are needed. 
Continued coordination among the CPUC, CEC, CAISO, load-serving entities, 
transmission owners, and resource developers remains essential. However, current 
forecasts and planning studies indicate that California's principal focus is not addressing 
an imminent statewide capacity deficit, but rather successfully executing the resource 
procurement, transmission expansion, and interconnection activities already identified 
through the state's coordinated planning processes to ensure sufficient resources are 
available to serve projected demand reliably. 
3. 
2025 Market Data 
Recent actual load figures show that demand decreased in California and the 
West last year.30 According to the CAISO’s Department of Market Monitoring (DMM) 
Annual Report, from 2024 to 2025, all actual load figures decreased, including average 
(MW), gross (MWh), and peak (MW) load, and similar net load figures (load minus 
variable generation).31 Peak market load in the Western Energy Imbalance Market 
(WEIM) region was 130.1 GW in 2025, down 3.8 percent from the 2024 peak of 135.3 
GW.32 This is not to say that load will continue to decrease, but with recent moderate 
load conditions and significant generation capacity additions, the CAISO is not facing 
the current capacity constraints of the East. 
 
Prices likewise went down from 2024 to 2025.33 Total wholesale costs of serving 
load in the CAISO balancing authority area decreased 6 percent in 2025.34 Controlling 
for both natural gas costs and greenhouse gas prices, wholesale electric costs 
decreased by about 24 percent in 2025, “due mainly to lower load, increased renewable 
and storage generation, and the absence of tight supply conditions . . . .”35 The 
frequency of high-price intervals likewise “declined significantly in 2025 across both day-
ahead and real-time markets, with nearly no intervals exceeding $250/MWh in the day-
ahead market and sharp reductions in real-time price spikes.”36 2025 data aligns with 
the Commission’s own 2026 summer reliability assessment, which expected wholesale 
prices in California to decrease significantly.37 
 
30  
Average load slightly increased in the Pacific Northwest (+1.9%), Intermountain West (+0.8%), 
and Desert Southwest (+0.2%), but decreased in California (-2.0%). 
31  
DMM Annual Report at 39-46.  These load figures are not adjusted for weather.  
32  
DMM Annual Report at 1. 
33  
DMM 2025 Annual Report at 3, 124-144.  
34  
Id.  
35  
Id.  
36  
Id. 
37  
FERC, 2026 Summer Energy Market and Electric Reliability Assessment (May 21, 2026) at p. 17, 
https://www.ferc.gov/news-events/news/presentation-report-2026-summer-energy-market-and-electric-

The Honorable Debbie-Anne A. Reese 
July 20, 2026 
Page 14 
 
 
 
 
 
 
 
 
 
 
 
II. 
CAISO Large Load Stakeholder Initiative 
The CAISO has convened several stakeholder processes to enhance large load 
processes, resource adequacy rules, demand-side market participation, and generator 
interconnection processes. The CAISO’s Large Load stakeholder initiative will become 
the primary vehicle for CAISO reforms to address the Order to Show Cause. The other 
stakeholder initiatives described below will provide additional benefits to reliability, 
market efficiency, and affordability, but will not affect the timing of the CAISO’s ultimate 
compliance with the Order to Show Cause, nor California’s resource adequacy to serve 
large loads specifically.  
 
Given the interplay among the CAISO, transmission service providers, utilities, 
and customers, the CAISO recognized the importance of clarity on roles in planning for 
large loads and launched the Large Loads stakeholder initiative. Within the initiative, 
CAISO posted an issue paper in January 2026 outlining roles, responsibilities, and 
processes to effectively integrate large loads. In addition, the CAISO posted a straw 
proposal in June 2026 describing possible technical requirements associated with large 
loads. 
 
The CAISO will refocus the Large Loads initiative on the issues the Commission 
has identified, which includes many of the issues the CAISO had included in its initial 
 
reliability-assessment (citing data from U.S. Energy Information Administration, Short-Term Energy 
Outlook July 2026, Table 7a, available at https://www.eia.gov/outlooks/steo/pdf/steo_full.pdf).

The Honorable Debbie-Anne A. Reese 
July 20, 2026 
Page 15 
 
 
 
 
 
 
issue paper. Given the timeline described in the Order, the CAISO expects to expedite 
the stakeholder initiative, with two discrete proposals: a straw proposal in August and 
draft final proposal in September, before seeking Western Energy Market Governing 
Body and Board of Governors approval at the October 20 and October 28 meetings, 
respectively.38 While the stakeholder initiative will be expedited, the CAISO will host 
workshops and solicit stakeholder feedback on the proposals to better inform the policy 
outcomes. 39 
 
Action
Tentative date 
Post Straw Proposal
August 12, 2026
Stakeholder workshop
August 19, 2026
Comments due
September 2, 2026
Post Draft Final Proposal
September 21, 2026
Stakeholder workshop
September 28, 2026
Comments due
October 12, 2026
Western Energy Market Governing Body (if necessary)
October 20, 2026
CAISO Board of Governors
October 28, 2026
FERC Filing on Order to Show Cause
November 16, 2026
 
III. 
Other Relevant CAISO Stakeholder Initiatives 
Although the CAISO’s large loads stakeholder initiative will address all the issues 
in the Order to Show Cause, the CAISO is conducting other stakeholder initiatives that 
will provide additional benefits to reliability, market efficiency, and affordability, as 
described below. The CAISO has not included schedules for these initiatives because 
they will not affect the timing of the CAISO’s ultimate compliance with the Order to Show 
Cause; however, schedules for each initiative are available on the CAISO website.  
 
A. 
Resource Adequacy  
The second track of the CAISO’s ongoing resource adequacy stakeholder 
initiative is examining the Resource Adequacy Availability Incentive Mechanism 
(RAAIM), the CAISO’s primary operational resource adequacy incentive tool. Its focus is 
to improve efficacy during the hours when reliability risk is highest.40 The CAISO 
recommends a significant reform of RAAIM based on stakeholder feedback. The 
redesigned mechanism would shift from static, pre-defined assessment hours to a 
structure that targets operational system conditions, with incentives triggered during 
periods of elevated reliability risk and true scarcity. This approach also provides clear 
 
38  
Decisional classifications will become more clear as the proposals within the large loads 
stakeholder initiative develop. 
39  
This timeline assumes a motion for abeyance, as contemplated by the Order to Show Cause at P 
25. 
40  
https://stakeholdercenter.caiso.com/StakeholderInitiatives/Resource-adequacy-modeling-and-
program-design.

The Honorable Debbie-Anne A. Reese 
July 20, 2026 
Page 16 
 
 
 
 
 
 
signals in advance of tight conditions, encouraging resources to return from outages 
more quickly and secure replacement capacity. It sharpens accountability by directly 
linking financial consequences to availability during critical hours, rather than averaging 
performance over a month. These reforms are paired with improvements to related 
tools: Clarifying must-offer obligations will ensure that resources bid in their true 
operational capability, thereby increasing the CAISO’s visibility of available capacity. 
Likewise, enhancements to outage substitution processes and definitions aim to reduce 
inefficiencies that can delay maintenance and contribute to higher forced outage rates. 
 
B. 
Demand and Distributed Energy Market Integration 
The CAISO’s Demand and Distributed Energy Market Integration (DDEMI) 
stakeholder initiative is a multi-track effort focused on enhancing demand flexibility 
within the CAISO markets.41  The CAISO has developed various load participation 
models capable of enabling loads, both large and small, to reduce their demand and 
participate in the CAISO markets economically or as emergency resources. Demand-
side resources can offer bids that reflect their flexibility to adjust their load in response 
to dispatch. The CAISO has implemented ways to facilitate wholesale market 
participation of such resources, and remains committed to empowering the reliable, 
efficient, and seamless utilization of demand flexibility into CAISO operations and 
markets. The DDEMI stakeholder initiative will continue this work, enhancing 
participation models to aid large and small loads to interconnect more quickly, 
affordably, and efficiently. 
 
The CAISO also recognizes that increasing numbers of large loads may raise 
additional market design considerations that extend beyond the current scope of 
DDEMI, and the Order to Show Cause. Although it would be premature to identify 
specific market design changes before further stakeholder engagement and analysis, 
growth in large loads may present opportunities to evaluate whether existing market 
constructs continue to appropriately represent evolving load characteristics and 
operational behavior across the CAISO, WEIM, and Extended Day-Ahead Market 
(EDAM) footprints. The WEIM and EDAM will enable large-load growth across the wider 
regional footprint with their ability to move energy efficiently from where it is available to 
where it is needed across a robust network covering 80% of the West, and producing 
$8.6 billion in benefits since 2014.42 Accordingly, the CAISO intends to continue 
assessing large-load-related market design issues through its stakeholder processes 
and market roadmap initiatives. 
 
 
41  
https://stakeholdercenter.caiso.com/StakeholderInitiatives/Demand-Distributed-Energy-Market-
Integration.  
42  
https://www.westernenergymarkets.com/western-energy-imbalance-market-weim/benefits.

The Honorable Debbie-Anne A. Reese 
July 20, 2026 
Page 17 
 
 
 
 
 
 
C. 
Interconnection Process Enhancements 
Parallel with the Commission’s reforms in Order No. 2023, the CAISO’s 
Interconnection Process Enhancements (IPE) stakeholder initiative has played a pivotal 
role in ensuring interconnection service to first-ready generation projects.43  In 2024, the 
CAISO became the first ISO/RTO to establish an interconnection request intake scoring 
process.44 That process helped the CAISO focus its cluster 15 interconnection study on 
first-ready projects, bringing request volumes back to manageable levels. Other 
ISO/RTOs have since adopted similar processes.45 Track 5.0 of the CAISO’s IPE 
initiative recently concluded, and the CAISO will continue to submit those 
enhancements for Commission approval.46  
 
Further, in the interest of continuous improvement, the CAISO is in frequent 
communication with transmission owners and interconnection customers to ensure 
timely interconnection of generation resources to meet increasing load growth. The ISO 
intends to open a sixth IPE initiative (IPE 6) in 2026 or early 2027 to seek additional 
enhancements to the process in time for the opening of the cluster 17 interconnection 
application window in October of 2027. The CAISO recognizes the potential interaction 
between large load interconnection and resource interconnection processes and may 
consider some complementary enhancements either in the large load or IPE initiative. 
 
 
43  
https://stakeholdercenter.caiso.com/StakeholderInitiatives/Interconnection-process-
enhancements-5-0.  
44  
California Independent System Operator Corp., 188 FERC ¶ 61,225 (2024). 
45  
See, e.g., PJM Interconnection LLC, 190 FERC ¶ 61,084 (2025); Southwest Power Pool Inc., 192 
FERC ¶ 61,062 (2025); Midcontinent Independent System Operator, Inc., 190 FERC ¶ 61,057 (2025). 
46  
The first set of enhancements are currently pending in Docket No. ER26-2747-000.

The Honorable Debbie-Anne A. Reese 
July 20, 2026 
Page 18 
 
 
 
 
 
 
IV. 
Conclusion 
The CAISO welcomes the opportunity to work with the Commission in serving the 
ongoing influx of large loads while maintaining reliability and affordability. 
 
 
 
 
 
 
 
Respectfully submitted, 
 
 
/s/ William H. Weaver 
 
 
 
 
 
 
Roger E. Collanton 
 
 
 
 
 
 
  General Counsel 
 
 
 
 
 
 
William H. Weaver 
 
 
 
 
 
 
  Assistant General Counsel 
 
 
 
 
 
 
California Independent System 
 
 
 
 
 
 
Operator Corporation 
 
 
 
 
 
 
250 Outcropping Way 
 
 
 
 
 
 
Folsom, CA 95630 
 
Counsel for the California Independent System 
Operator Corporation

CERTIFICATE OF SERVICE 
 
I certify that I have served the foregoing document upon the parties listed on the 
official service list in the captioned proceeding, in accordance with the requirements of 
Rule 2010 of the Commission’s Rules of Practice and Procedure (18 C.F.R. § 
385.2010). 
 
Dated at Folsom, California this 20th day of July 2026. 
 
/s/ Ariana Rebancos 
Ariana Rebancos 
An employee of the California ISO