Blackstone portfolio company Aypa Power has negotiated two resource adequacy agreements (RA) with Pacific Gas & Electric (PG&E) covering 500MW/2,000MWh of energy storage from two standalone BESS projects located in the Californian cities of Industry and Irwindale.
The investor-owned utility (IOU) lodged an Advice Letter (AL) with the California Public Utilities Commission (CPUC) seeking approval of the two long-term resource adequacy agreements with energy settlement (LTRAA w/ES) on 4 November 2024.
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In its request to the California regulator, PG&E asked CPUC to approve the agreements no later than 5 May 2025.
Third phase of PG&E’s Mid-Term Reliability RFO
Aypa Power submitted the two agreements as part of PG&E’s third phase Mid-Term Reliability Request for Offers (MTRRFO) which the utility first issued in February 2023.
The third phase of this procurement was issued by PG&E to fulfil capacity requirements mandated by CPUC to address shortfalls across the wider California Independent System Operator (CAISO) electricity grid between 2026 and 2027.
Prior to the recent AL, PG&E has sought CPUC approval of seven RA contracts selected as part of the third phase of its MTRRFO, including four offtake agreements recently covered in Energy-Storage.news.
The four agreements – covering over 575MW of energy storage capacity from projects under development by 174 Power Global and Terra-Gen – are still under review by CPUC.
PG&E stated that further negotiations were ongoing with other shortlisted counterparties selected as part of the third phase procurement, and intends to present them to CPUC as the contracts are finalised.
Marici Energy Storage
The first, and much larger, RA agreement in PG&E’s most recent AL covers 400MW/1,600MWh of energy storage from Aypa Power’s standalone Marici Energy Storage project located in the City of Industry in the eastern portion of Los Angeles County.
The lithium-ion based BESS project will connect to the CAISO-controlled grid via Southern California Edison’s (SCE’s) Walnut 230kV substation (queue number 2116).
Further details of the agreement, including pricing information, was redacted within the CPUC filing.
Gabriel Battery Storage
The second agreement covers a smaller 100MW/400MWh of RA from Aypa Power’s 400MW lithium-ion Gabriel Battery Storage project located in the City of Irwindale also in Los Angeles County. As with the Marici agreement, further details of the deal were redacted.
Interconnection to the CAISO grid is expected via SCE’s Rio Hondo 230kV substation (queue number 2113).
This recent deal with PG&E now means the entire 400MW capacity of Aypa Power’s Gabriel project is fully allocated, after the independent power producer (IPP) secured similar offtake agreements earlier in the year.
As reported by Energy-Storage.news, Aypa Power has signed energy storage services agreements (ESSAs) with California community choice aggregators (CCAs) Ava Community Energy and Central Coast Community Energy, covering 100MW/400MWh and 125MW/500MWh, respectively, of energy arbitrage capabilities and RA.
The final 75MW of energy storage capacity from the Gabriel project is allocated to another CCA, Peninsula Clean Energy (PCE), and is split between two ESSAs of different discharge durations.
The first and larger contract covers 65MW of energy storage for a four-hour duration (260MWh) and the second covers 10MW for a longer eight-hour duration (80MWh).
PCE will pay Aypa Power a fixed US$/kW-month rate with no escalation and is entitled to all products and attributes from the facility including capacity, RA and ancillary services.
CAISO delays and reform
As stipulated in the recent AL, the 15-year RA contracts with PG&E for Marici and Gabriel are set to commence delivery on 1 September 2027. However, according to the CAISO queue, the Marici and Gabriel projects are scheduled to come online in 2031 and 2033, respectively.
Aypa Power submitted the two queue requests in 2021 as part of CAISO’s Cluster 14 process which has been subject to huge processing delays, as recently covered in Energy.Storage-news. Dubbed as a “supercluster” by the California system operator, the 2021 April submission window had a 241% increase in the number of submissions on the previous year.
Despite these scheduling differences, a CPUC approved independent evaluator (IE) recommended approval of the recent agreements, stating that they both had a “reasonable probability” of completion by 1 September 2027.
In its comments submitted as part of PG&E’s recent AL, the IE added that Aypa Power had a “reasonable path forward” towards interconnection for the Marici project.
