Riverside secures long term energy storage agreement to combat capacity crisis

In a recent city council meeting, officials discussed significant developments regarding the city's water quality treatment plant and a new resource adequacy purchase agreement aimed at addressing energy capacity needs.

Council member Conder highlighted the importance of the water quality treatment plant, noting its upgraded capacity and the financial implications of past decisions that led to increased rates. He emphasized the necessity of adapting to new mandates from Sacramento as the city continues to grow. The council unanimously approved a motion to move forward with the project, which includes securing grants that will significantly reduce costs.

The meeting also featured a presentation by Scott Lesh, assistant general manager for Power Resources, regarding a proposed long-term resource adequacy purchase and sale agreement with Vezi from the Sherk Energy Storage Facility. This agreement is crucial as the city faces a growing capacity shortage due to the retirement of natural gas plants in California. Lesh explained that the agreement would provide Riverside with 80 megawatts of capacity, helping to meet peak load demands during the summer months.

The proposed contract, which locks in a fixed price of $7.94 per kilowatt month for 15 years, is seen as a strategic move to hedge against rising energy costs, which have surged dramatically in recent years. The council was informed that the current market conditions have led to a tenfold increase in capacity costs since 2019, making this agreement particularly timely.

Public comments during the meeting raised concerns about the implications of sourcing energy from a facility located 250 miles away, with some community members questioning the decision to not develop local battery storage solutions. However, city officials clarified that regulatory constraints and safety concerns currently limit local capacity expansion.

The council's approval of the resource adequacy agreement marks a proactive step in addressing the city's energy needs while ensuring financial stability in the face of escalating costs and regulatory challenges.