On April 7, 2026, the new 2025-2026 cycle of the CAISO transmission plan identified the need for 38 transmission projects, recommending an estimated total infrastructure investment of $7.0 billion at full buildout over the next 10 years.
The Missed Opportunity in the 2025-2026 Plan
To ensure that newly built, policy-driven transmission lines are used by the critical long-term clean energy projects the state is counting on, CAISO reserves transmission deliverability for specific, long-time resources. In the proposed plan for 2025-2026, CAISO made the following deliverability reservations for 2035 and 2040:
• Out-of-State Wind: Reserved roughly 7,500 MW across various nodes
• Offshore Wind: Reserved 1,607 MW on the North Coast (Humboldt) and 2,924 MW on the Central Coast (Diablo).
• Long Duration Energy Storage (LDES): Reserved 1,259 MW
• Geothermal (Out-of-CAISO): Reserved 830 MW across IID and other locations.
However, it appears that CAISO has continued to ignore the low-hanging fruit. They failed to reevaluate the local deliverability that could add significant deliverability without costly transmission upgrades, an issue that CCAs have been pushing CAISO and the CPUC to address for years.
Why is this important?
Electrons follow the path of least resistance. If a developer builds a 10 MW generating resource connected to a 12 kV or 33 kV distribution feeder in the Sierra Local Capacity Area (LCA), that power is consumed immediately by the homes and businesses on that exact circuit. Physically, that power cannot and will not reach the bulk transmission system because the local load consistently exceeds the 10 MW output.
Under the current CAISO tariff, this physical reality is penalized by a flawed deliverability accounting system. If that 10 MW local plant cannot theoretically serve load hundreds of miles away in Orange County, CAISO deems it “undeliverable” and denies the project its capacity payments. Meanwhile, a 10 MW plant in Las Vegas is deemed “deliverable” simply because it fits CAISO’s skewed accounting model. This deliverability methodology contradicts the laws of physics, undermines grid reliability, and actively blocks critical and cost effective, affordable infrastructure development.
How the Current RA and Deliverability Framework Fails Ratepayers
The current regulatory framework ignores the value of local generation: Serving load locally directly reduces the flow of energy into the local area over transmission lines. That freed-up transmission capacity can then be used to serve loads elsewhere on the CAISO system. It subsidizes remote generation:
It forces Load Serving Entities to sign contracts for remote power, pay for transmission upgrades, incur line losses, congestion and pay wheeling fees when perfectly viable local generation is available next door. It creates perverse incentives for local generation.
The Real-World Consequences for Grid Reliability
This has been a fundamental flaw since the inception of the RA regime. The consequences of this policy are severe:
Over the last 15 years, virtually zero new capacity has successfully achieved Full Capacity Deliverability Status (FCDS) in these deeply constrained pockets. When new distribution-connected facilities attempt to interconnect to serve local load, as we have attempted to do for our clients, CAISO’s models assume they are trying to export 100% of their power to the grid (outside the local area), which is not how the electrons actually flow.
This accounting system artificially triggers local unrealistic Area Delivery Network Upgrades (ADNUs) for high-voltage lines, which the new local project will never actually use. As a result, regions like the Sierras, Stockton, Rio Oso and other local load pockets are forced to rely almost entirely on transmission imports and legacy hydro with no hope for new steel in this area.
The Proposed Solution: Establish a “Local Deliverability” Pathway
California needs “steel in the ground” today to manage the grid of tomorrow. Developers stand ready to deploy capital and build these necessary assets, but CAISO’s modeling must be urgently reformed to reflect the physical reality of the distribution system. We strongly urge CAISO to implement the following reforms:
The CAISO should create a “Local Deliverability” designation. Resources connected to the grid at 70kV and below that are physically located within a Local Capacity Area should be exempt from system wide grid transmission deliverability tests, provided they do not trigger transmission-level upgrades by serving local loads.
Also, if a sub-70kV resource can prove it serves the local load pocket without overloading the local sub-transmission system, it should be granted Local Deliverability Status.