Since 2013, California has ordered nearly 30 GW of new capacity through one-off procurement orders. Orders come from the CPUC, obliging every utility under its jurisdiction to buy new capacity. These procurement mandates are what drive California's bilateral capacity market.

Contracts to meet these procurement orders, via resource adequacy and offtakes, make up 80% of battery revenues in CAISO today.

The most prolific of these in recent history has been the Mid-Term Reliability Order of 2021, which ordered 11.5 GW in clean dispatchable capacity, driving CAISO to be the largest battery energy storage market today. The latest 2030-2032 reliability order (decision D.26-02-057) runs to June 2032. No order yet covers 2033 onwards.

The California Public Utilities Commission (CPUC) wants to replace these sporadic orders with a standing obligation: the Reliable and Clean Power Procurement Program (RCPPP).

Three designs are on the table. Policy groups are pushing for a decision by the end of 2026.

For developers, the designs differ most on two questions: which assets count, and how much buyers will pay before a penalty becomes the cheaper option.

Option 3, which has the most support, counts only new resources. It fines buyers the full net cost of new entry (net CONE), about $15/kW-month, for capacity that is not online. That is close to the median CAISO tolling price. Options 1 and 2 fine contracting shortfalls at half that.

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Understand how the three RCPPP designs would change the process today, how its penalties compare with today's contract prices, and what a delayed decision would mean for developers.

Key takeaways

• Option 3 has the broadest support. 17 of 25 filers back it, most with conditions, and the CPUC had not issued a proposed decision as of November 2026.
• Option 3 has a two-year cliff. Utilities must have 100% of their obligation contracted by June 2031, and online by June 2033. Developers need deliverable queue positions in time for a 2028–31 contracting wave.
• A late decision introduces a 2033-2034 procurement order. Option 3 runs on two-year cycles, so missing the February 2028 state resource plan leaves 2033–34 uncovered without another stop-gap order.
• Penalties set a soft ceiling on contract prices. Option 3's $15/kW-month penalty matches median tolls; Options 1 and 2's $7.50 contracting penalty sits below the median resource adequacy (RA) contract, which gives utilities little reason to sign early.
• Option 3 rewards new build only. Mid-Term Reliability assets get no further credit and rely on RA once their contracts end in 2038–43. This favors new generation over existing plants for meeting GHG and reliability targets.

What the three options for RCPPP propose

Each of the options for RCPPP aims to deploy capacity to meet two objectives:

1. Reliability: solicit new project construction to meet future Resource Adequacy requirements.
2. Clean Energy: ensure new builds align to meet the state's Greenhouse Gas targets.

Today, each order covers reliability alone. Clean energy rests on the Renewables Portfolio Standard and the greenhouse gas targets used in planning.