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HomeMy WebLinkAboutSB 1138 (Padilla) - Energy Affordability - RA Program - City of SLO - SUPPORTCity of San Luis Obispo, Office of the City Council, 990 Palm Street, San Luis Obispo, CA, 93401-3249, 805.781.7114, slocity.org March 18, 2026 Senator Ben Allen, Chair Senate Energy, Utilities and Communications Committee 1021 O Street, Suite 3350 Sacramento, CA 95814 Re: SB 1138 (Padilla) - Support Dear Chair Allen, On behalf of the City of San Luis Obispo, I write to support SB 1138 by Senator Steve Padilla (D-San Diego). SB 1138 supports energy affordability by lowering the cost to consumers of California’s Resource Adequacy (RA) program by allowing load-serving entities (LSEs) to transact RA load obligations on an hourly basis to align with the new slice-of-day RA program. The bill allows load‑serving entities, including CCAs like Central Coast Community Energy, to use more flexible short‑term resource adequacy tools. This can reduce over‑procurement and help control wholesale power costs, which ultimately influence our community’s electricity bills. California’s RA program, which ensures there is enough electricity supply to meet customer demand, recently transitioned to a new “Slice-of-Day (SOD)” compliance framework. The new SOD framework requires LSEs, such as CCAs, investor-owned utilities (IOUs), and energy service providers (ESPs), to procure enough RA to meet load obligations in each hour, rather than monthly. While this aligns resources more precisely with load, under current rules LSEs can only buy or sell RA products for the whole month, even though obligations are unique to each hour. This mismatch forces LSEs to purchase more RA than they need to meet their obligations, creating artificial market scarcity and unnecessarily driving up RA demand (and prices). It’s akin to having to buy a crate of oranges when you only need a few slices. These unnecessary costs fall directly on California ratepayers, totaling tens of millions of dollars annually. At a time of rapidly rising costs in the electricity sector, policymakers should provide LSEs maximum flexibility in how they contribute their fair share to keep the overall system reliable. SB 1138 would allow LSEs to transact RA load obligations on an hourly basis, aligning with the new slice-of-day RA program and lowering the costs of the RA trading program to consumers. Enabling hourly load obligation trading promotes efficiency, delivers affordability, maintains LSE responsibility, and requires limited administrative oversight. For these reasons, the City of San Luis Obispo strongly supports SB 1138. Sincerely, Erica A. Stewart Mayor, City of San Luis Obispo cc: Members of the San Luis Obispo City Council Senator John Laird Assemblymember Dawn Addis Dave Mullinax, League of California Cities League of California Cities, cityletters@cacities.org