Sen. Padilla’s SB 1138 would let load‑serving entities trade hourly RA obligations to cut costs

Sen. Padilla told the committee SB 1138 addresses inefficiencies in California’s resource adequacy (RA) program by allowing hourly trades of RA obligations between load‑serving entities. He said the current ‘slice of day’ compliance framework forces entities to buy monthly RA products that exceed hourly needs and can drive up prices.

Lauren Carr of the California Community Choice Association, a sponsor, said the state’s 25 community choice aggregators serve more than 15 million Californians and that RA transactions currently occur monthly despite hourly obligations. “This forces LSEs to purchase more RA than needed and unnecessarily drives up RA prices,” Carr said, and noted that RA reserve margins reached 23% in September 2025 while the requirement was 17%.

Ted Bartekie, CEO of Clean Power Alliance, said the mismatch forces unnecessary procurement and estimated the largest CCAs could have saved “between $10 and $13 million” individually, with statewide avoided costs of about $180 million in 2025. Padilla and witnesses said the bill’s amendments allow the CPUC to suspend hourly trading if it undermines grid reliability.

Committee members pressed technical questions about CAISO integration, local reliability and whether savings would be passed to ratepayers. Padilla and witnesses said local capacity procurements and CAISO/IOU central procurement would remain intact and that the bill targets system‑level efficiency. Senator McNerney asked whether savings would flow to customers rather than investors; Padilla responded that the RA cost components are passed through to ratepayers in rate cases and reducing over‑procurement should reduce bills.

Support came from a wide range of local governments, CCAs, climate and clean‑energy groups; the committee recorded a due‑pass recommendation and later sent the bill to Appropriations.