Incremental Capacity
Procurement Mandates:
Status Update
February 17, 2026
2 • Incremental procurement orders stem from California’s Integrated Resource Planning (IRP) process, which is administered by the CPUC
• The IRP process is CA’s “umbrella” planning proceeding, designed to ensure load serving entities (LSEs) meet CA’s clean energy goals in a reliable, cost-effective manner • SB 350 and SB 100 specify CA’s clean energy goals as follows: 50% RPS by 2026, 60% RPS by 2030, and 100% Carbon-Free by 2045
• Three incremental procurement directives have been issued to date; a fourth is expected in Q1 2026
• Total procurement has been based on proportionate peak demand • Incremental procurement directives have only been applicable to those LSEs in operation at the time of decision issuance
Incremental Capacity Procurement: Overview
3 Incremental Capacity Procurement: Overview
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!"#$%&'(&)*"+,*-.-/#&01%23$#2"/&45678 (33*-3$#-&'$%'9"2+-&01%23$#2"/&45678 • Directed procurement is measured as Net Qualifying Capacity (NQC) • Vintaged marginal effective load carrying capability (ELCC) values “translate” technology-specific nameplate capacity to NQC
• Numeric example for 4-hour battery storage:
• Project nameplate capacity: 50 MWs
• Expected online date: June 2026
• Assigned ELCC value: 76.6%
• NQC credited towards incremental procurement: 50 MWs * 76.6% = 38.3 MWs • Numeric example for PV Solar:
• Project nameplate capacity: 50 MWs
• Expected online date: June 2025
• Assigned ELCC value: 6.6%
• NQC credited towards incremental procurement: 50 MWs * 6.6% = 3.3 MWs • ELCC values are expected to decrease for certain technologies over time:
• 2030 ELCC values expected no later than July 31, 2026 • 2032 ELCC values expected no later than December 31, 2027 4 Quantifying Incremental Procurement Obligations
5 Quantifying Incremental Procurement Obligations
Values reflect annual NQC (MW) totals identified under the CPUC’s four distinct incremental procurement directives. The bar chart reflects CalChoice’s aggregate procurement obligation as totaled across all members.
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28 MWs
by
6/1/2030
Additional 58
MWs by
6/1/2032
(86 MWs total)
6 • CalChoice has issued a series of RFPs for incremental capacity and long-term renewable energy supply to address CPUC directives • CalChoice has also engaged in successful bilateral negotiations Procurement Planning
Participating
Counterparties
Unique
Proposals
Executed Contracts
2019 (RFP) 25 106 (1) Mountain View
2020 (RFP) 16 39 (1) Manzana
2022 (RFP) 21 149 (4) Tecolote, Leapfrog,
Resi Station, Cape
2023 (RFP) 14 86 (1) ES1-TerraGen
2024 (RFP) 18 41 (1) Deer Creek
2025 (Bilateral) N/A N/A (3) Circle City, Athos,
Aypa
7 • CPUC procurement orders generally create a 'rush to market’:
• All LSEs compete simultaneously for limited resources • Atypical leverage for sellers/project developers
• Procurement Challenge Example 1: CalChoice agreed to contract terms with a battery storage facility (scheduled COD of June 2024; Tranche 2 MTR); supplier offered the project to an IOU at a higher price before signing contract • Procurement Challenge Example 2: CalChoice executed transaction with a Utah-sited geothermal project (scheduled COD of June 2026; Tranche 4 MTR, LLT); more than a year after contract execution, the developer offered project to an IOU at a higher price point; CalChoice now has an amendment reflecting a higher price and a later (2031) COD
• Procurement Challenge Example 3: Diminishing number of conforming RFP responses
Procurement Challenges
8 • Targeted project types: 1) clean baseload renewable; 2) intermittent renewable energy + storage; and 3) stand-alone storage
• Evaluation criteria will include price, COD, location, developer experience, +others • CalChoice may want to consider production cost modeling during evaluation Solicitation Addressing 2030/2032 Procurement
RFP Activity Anticipated Date of Completion
RFP Issuance April 2, 2026
Deadline for Electronic Question Submittal April 17, 2026 no later than 5:00 PM PPT RFP Response Deadline May 15, 2026 no later than 5:00 PM PPT Follow-up with RFP Respondents, as
necessary
To occur between May 18, 2026 and May
27, 2026
Supplier Notifications (Short-List) June 5, 2026
Contract Negotiations June 8, 2026-July 31, 2026
Member Councils Approve Awards July-August 2026
Contract Execution July-August 2026 (after councils approve) 9 Questions?